NORTH CHICAGO, Ill. and
DUBLIN, June 25, 2019 /PRNewswire/ -- AbbVie Inc.
(NYSE: ABBV) and Allergan plc (NYSE: AGN) announced that the
companies have entered into a definitive transaction agreement
under which AbbVie will acquire Allergan in a cash and stock
transaction for a transaction equity value of approximately
$63 billion, based on the closing
price of AbbVie's common stock of $78.45 on June 24,
2019.
"This is a transformational transaction for both companies and
achieves unique and complementary strategic objectives," said
Richard A. Gonzalez, chairman and
chief executive officer, AbbVie. "The combination of AbbVie and
Allergan increases our ability to continue to deliver on our
mission to patients and shareholders. With our enhanced growth
platform to fuel industry-leading growth, this strategy allows us
to diversify AbbVie's business while sustaining our focus on
innovative science and the advancement of our industry-leading
pipeline well into the future."
"This acquisition creates compelling value for Allergan's
stakeholders, including our customers, patients and shareholders.
With 2019 annual combined revenue of approximately $48 billion, scale in more than 175 countries, an
industry-leading R&D pipeline and robust cash flows, our
combined company will have the opportunity to make even bigger
contributions to global health than either can alone," said
Brent Saunders, chairman and chief
executive officer, Allergan. "Our fast-growing therapeutic
areas, including our world class medical aesthetics, eye care, CNS
and gastrointestinal businesses, will enhance AbbVie's strong
growth platform and create substantial value for shareholders of
both companies."
Strategic Rationale
- New growth platforms and leadership positions to diversify
and expand revenue base: The combined company will consist of
several attractive franchises with leadership positions across
immunology, hematologic oncology, medical aesthetics, neuroscience,
women's health, eye care and virology. Allergan's product
portfolio will be enhanced by AbbVie's commercial strength,
expertise and international infrastructure.
- Immediate scale and enhanced profitability for AbbVie's
growth platform: AbbVie's enhanced growth platform, comprised
of growing and durable franchises across highly-attractive
therapeutic areas, is expected to grow at a high-single digit
annual growth rate well into the next decade, from more than
$30 billion in 2020.
- Financially attractive with immediate EPS accretion:
This transaction is expected to be 10% accretive to adjusted
earnings per share over the first full year following the close of
the transaction, with peak accretion of greater than
20%.1 ROIC is expected to exceed AbbVie's
cost of capital within the first full year.
- Significant cash flow generation: The success and
scale of the combined commercial business ensures funding capacity
and flexibility for simultaneous robust pipeline investment, debt
reduction and capital return to shareholders. The combined
companies generated $19 billion in
operating cash flow in 2018.
Structure and Governance
Upon completion of the transaction, AbbVie will continue to be
incorporated in Delaware as AbbVie
Inc. and have its principal executive offices in North Chicago, Ill. AbbVie will continue
to be led by Richard A. Gonzalez as
chairman and chief executive officer. Two members of Allergan's
Board, including chairman and chief executive officer, Brent Saunders, will join AbbVie's Board upon
completion of the transaction.
Transaction Details
Under the terms of the Transaction Agreement, Allergan
Shareholders will receive 0.8660 AbbVie Shares and
$120.30 in cash for each Allergan
Share that they hold, for a total consideration of $188.24 per Allergan Share.2 The
transaction represents a 45% premium to the closing price of
Allergan's Shares on June 24,
2019.
AbbVie anticipates that the Acquisition will provide annual
pre-tax synergies and other cost reductions of at least
$2 billion in year three while
leaving investments in key growth franchises untouched. The
synergies and other cost reductions will be a result of optimizing
the research and early stage portfolio, and reducing overlapping
R&D resources (~50%), driving efficiencies in SG&A,
including sales and marketing and central support function costs
(~40%), and eliminating redundancies in manufacturing and supply
chain, and leveraging procurement spend (~10%). The synergies
estimate excludes any potential revenue synergies.3
AbbVie is expected to generate significant annual operating cash
flow, which will support a debt reduction target of $15 to $18 billion
before the end of 2021, while also enabling a continued commitment
to Baa2/BBB or better credit rating and continued dividend
growth.
It is expected that, immediately after the closing of the
Acquisition, AbbVie Shareholders will own approximately 83% of
AbbVie on a fully diluted basis and the Allergan Shareholders will
own approximately 17% of AbbVie on a fully diluted basis.
The transaction is subject to the Conditions set out in Appendix
III of the Rule 2.5 Announcement, including certain regulatory
approvals and approval by Allergan's Shareholders.
1 The statement that this transaction is
earnings accretive should not be interpreted to mean that the
earnings per share in the current or any future financial period
will necessarily match or be greater than those for the relevant
preceding financial period.
2 Subject to adjustment in accordance with the
Exchange Ratio Modification Number.
3 There are various material assumptions
underlying the synergies and other cost reductions which may result
in the synergies and other cost reductions being materially greater
or less than estimated. The estimates should therefore be read in
conjunction with the bases and assumptions for these synergy
numbers which are set out in Appendix I of this announcement. The
synergies and other cost reductions have been reported on in
accordance with Rule 19.3(b) of the Irish Takeover Rules by (i)
PricewaterhouseCoopers LLP and (ii) Morgan Stanley & Co.
International plc. Copies of their respective reports are included
in Appendix IV and Appendix V to this announcement. Each of
PricewaterhouseCoopers LLP and Morgan Stanley & Co.
International plc has given and not withdrawn its consent to the
issue of this announcement with the inclusion of its report and
context in which it is included. The synergy and earnings
enhancement statements in this section should not be construed as a
profit forecast or interpreted to mean that the earnings of AbbVie
and/or Allergan in 2019, or in any subsequent period, would
necessarily match or be greater than or be less than those of
AbbVie and/or Allergan for the relevant financial period or any
other period. The synergies estimate excludes any potential revenue
synergies.
Conference Call and Other Materials
AbbVie will host an investor conference call today at
7:30 a.m. Central to discuss this
transaction. The call will be webcast through AbbVie's Investor
Relations website at investors.abbvie.com. An archived edition of
the call will be available after 11
a.m. Central. Presentation materials for the investor
conference call are available here.
Conference call
details:
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Date:
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Tuesday, June 25,
2019
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Call start time:
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7:30 a.m. Central
time
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Dial-in
numbers:
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877-934-8565 (toll
free) or 210-795-9161 (international)
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Passcode:
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ABBVIE
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Please place your
call by 7:15 a.m. Central time in order to be cleared for the start
of the call at 7:30 a.m. Central time.
|
|
Call
replay:
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800-846-1910 (toll
free) or 402-280-9953 (international)
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Replay
code:
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62519
|
In addition, an infographic highlighting the key attributes of
this transaction is available here.
AbbVie's lead financial advisor is Morgan Stanley & Co. LLC
who has delivered a fairness opinion and has provided the committed
financing for the transaction, and its legal advisors are Kirkland
& Ellis LLP and McCann
FitzGerald. PJT Partners LP is also serving as a financial
advisor to AbbVie. Allergan's exclusive financial advisor is J.P.
Morgan Securities LLC and its legal advisors are Wachtell, Lipton,
Rosen & Katz and Arthur Cox.
Key Questions and Answers
1. What are the strategic and financial benefits of this
transaction?
This transaction achieves unique and complementary strategic
objectives for both organizations. Combining Allergan's diversified
on-market product portfolio with AbbVie's growth platform and deep
expertise in R&D, commercial strength and international
footprint will create a leading biopharmaceutical company with
approximately $48 billion in combined
2019 revenue. This combination also enhances AbbVie's ability for
robust investment in its industry-leading pipeline of innovative
therapies throughout the next decade and enables AbbVie to deliver
on its mission to better serve patients.
The financial benefits include immediate 10% earnings-per-share
accretion over the first full year of the combination, with peak
accretion of greater than 20%. The transaction will generate annual
pre-tax synergies and other cost reductions of at least
$2 billion in year three, with a
return on invested capital to exceed AbbVie's cost of capital
within the first full year.
2. When do you anticipate this transaction to close and what
is the leadership structure for the new combined company?
We anticipate closing of the transaction by early 2020, subject
to regulatory and Allergan's shareholder approvals. The combined
company will continue to be incorporated in Delaware and have its principal executive
offices in North Chicago, Ill.
Richard A. Gonzalez will serve as
the chairman and chief executive officer through the Humira loss of
exclusivity in 2023. AbbVie's Board will include two Allergan
board members, including Allergan's chairman and chief executive
officer, Brent Saunders.
3. Does this transaction represent a change in your
fundamental strategy for AbbVie?
This transaction enhances our ability to continue to advance our
mission to develop a consistent stream of innovative medicines to
create a remarkable impact on people's lives. AbbVie will now
have a more diversified product portfolio with several leadership
positions in high value therapeutic areas and an industry-leading
pipeline of next-generation therapies with ensured capacity for
continued investment across our innovative pipeline.
4. What is the benefit of doing a transaction of this
size versus smaller bolt-on acquisitions?
This transaction is designed to meet a different strategic
imperative than smaller bolt-on acquisitions. Its ability to
deliver immediate scale to the AbbVie growth platform with
Allergan's on-market diversified product portfolio meets our
strategic goal to reduce reliance on Humira and allows us to
continue expanding our focus on high-innovation science throughout
the next decade.
Smaller bolt-on acquisitions provide opportunities for future
growth, but also require significant R&D investment amid
scientific and clinical uncertainty. This transaction offers
immediate compelling financial and strategic value to our
shareholders with a much lower risk profile.
5. What is your level of confidence in your ability to
operate the combined company given that it represents somewhat of a
change in the mix of businesses from what AbbVie has been?
We are highly confident in our ability to enhance the value of
Allergan's existing commercial franchises and capitalize on
next-generation pipeline programs. AbbVie has a proven track record
of industry leading financial performance and commercial expertise
in building market-leading franchises in immunology, hematologic
oncology, and other areas, and our geographic scale will enable us
to unlock additional value in Allergan's franchises. Our senior
leadership team is experienced in leading diverse businesses and we
are confident in our future success.
6. What are your plans for capital allocation for the
combined company? How do you intend to address the debt
levels of the combined company?
The combined company will produce robust cash flow which will
support continued growth of our dividend, further investment in our
pipeline, and reduction of debt. We intend to reduce debt levels by
$15-$18
billion by the end of 2021, with further deleveraging
through 2023.
7. What do you view as the largest risks associated
with the transaction?
Any transaction of this magnitude involves a series of
regulatory approvals and integration complexities. Both companies
have organizations that are highly experienced at integrating
businesses and we expect that process to be efficient and
thorough.
About AbbVie and Acquirer Sub
AbbVie is a global, research-driven biopharmaceutical company
committed to developing innovative advanced therapies for some of
the world's most complex and critical conditions. The company's
mission is to use its expertise, dedicated people and unique
approach to innovation to markedly improve treatments across four
primary therapeutic areas: immunology, oncology, virology and
neuroscience. In more than 75 countries, AbbVie employees are
working every day to advance health solutions for people around the
world. For more information about AbbVie, please visit us at
www.abbvie.com. Follow @abbvie on Twitter, Facebook or
LinkedIn.
Acquirer Sub, a wholly-owned subsidiary of AbbVie, is a limited
liability company organized in Delaware solely for the purpose of effecting
the Acquisition. To date, Acquirer Sub has not conducted any
activities other than those incidental to its formation and the
execution of the Transaction Agreement.
About Allergan
Allergan, headquartered in Dublin, Ireland, is a global pharmaceutical leader
focused on developing, manufacturing and commercializing branded
pharmaceutical, device, biologic, surgical and regenerative
medicine products for patients around the world. Allergan
markets a portfolio of brands and products primarily focused on
four key therapeutic areas including medical aesthetics, eye care,
central nervous system and gastroenterology. As part of its
approach to delivering innovation for better patient
care, Allergan has built a broad pharmaceutical and
device research and development pipelines.
With employees and commercial operations in approximately 100
countries, Allergan is committed to working with
physicians, healthcare providers and patients to deliver innovative
and meaningful treatments that help people around the world live
longer, healthier lives every day. For more information about
Allergan, please visit www.allergan.com.
ENQUIRIES
AbbVie
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Media: Adelle
Infante
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+ 1 847 938
8745
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Investors: Liz
Shea
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+ 1 847 935
2211
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Morgan Stanley
(lead financial advisor to AbbVie)
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Clint
Gartin
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+1 212 761
4000
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Michael
Boublik
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+1 212 761
4000
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Joe
Modisett
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+1 212 761
4000
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David
Kitterick
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+44 207 425
8000
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Allergan
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Media: Amy
Rose
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+ 1 862 289
3072
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Investors:
Manisha Narasimhan,
PhD
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+ 1 862 261
7162
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J.P. Morgan
Securities LLC (exclusive financial advisor to
Allergan)
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Jeremy
Meilman
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+ 1 212 270
6000
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Thomas
Monaghan
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+ 1 212 270
6000
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Dwayne
Lysaght
|
+44 207 742
4000
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|
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David
Connern
|
+44 207 742
4000
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NO OFFER OR SOLICITATION
This announcement is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction
pursuant to the Acquisition or otherwise, nor shall there be any
sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. In particular, this announcement
is not an offer of securities for sale into the United
States. No offer of securities shall be made in the United States absent registration under
the U.S. Securities Act of 1933, as amended, or pursuant to an
exemption from, or in a transaction not subject to, such
registration requirements. Any securities issued in the Acquisition
are anticipated to be issued in reliance upon available exemptions
from such registration requirements pursuant to Section 3(a)(10) of
the U.S. Securities Act of 1933, as amended. The Acquisition will
be made solely by means of the Scheme Document (or, if applicable,
the Takeover Offer document), which will contain the full terms and
conditions of the Acquisition, including details with respect to
the Allergan shareholder vote in respect of the Acquisition.
Any decision in respect of, or other response to, the Acquisition,
should be made only on the basis of the information contained in
the Scheme Document.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE
SEC
In connection with the proposed Acquisition, Allergan will file
with the U.S. Securities and Exchange Commission (the "SEC") a
Proxy Statement, which will include the Scheme Document. BEFORE
MAKING ANY VOTING DECISION, ALLERGAN'S SHAREHOLDERS ARE URGED TO
READ THE PROXY STATEMENT, INCLUDING THE SCHEME DOCUMENT, AND OTHER
RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED ACQUISITION OR INCORPORATED BY REFERENCE IN THE
PROXY STATEMENT (IF ANY) CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED ACQUISITION AND THE PARTIES TO THE PROPOSED
ACQUISITION. Allergan's shareholders and investors will be able to
obtain, without charge, a copy of the Proxy Statement, including
the Scheme Document, and other relevant documents filed with the
SEC (when available) from the SEC's website at http://www.sec.gov.
Allergan shareholders and investors will also be able to obtain,
without charge, a copy of the Proxy Statement, including the Scheme
Document, and other relevant documents (when available) by
directing a written request to Allergan plc, Clonshaugh Business
and Technology Park, Coolock, Dublin, D17 E400, Ireland, Attention: Investor Relations, or
from Allergan's website, www.allergan.com.
PARTICIPANTS IN THE SOLICITATION
Allergan and certain of its directors and executive officers and
employees may be considered participants in the solicitation of
proxies from the shareholders of Allergan in respect of the
transactions contemplated by the Scheme Document. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of the shareholders of
Allergan in connection with the proposed transactions, including a
description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the Scheme Document
when it is filed with the SEC. Information regarding Allergan's
directors and executive officers is contained in Allergan's Annual
Report on Form 10-K for the fiscal year ended December 31, 2018 and its Proxy Statement on
Schedule 14A, dated March 22, 2019,
which are filed with the SEC, and certain of Allergan's Current
Reports on Form 8-K filed with the SEC on February 19, 2019, March
22, 2019 and May 1, 2019.
FORWARD-LOOKING STATEMENTS
This announcement contains certain forward-looking statements
with respect to a possible acquisition involving AbbVie and
Allergan and AbbVie's, Allergan's and/or the combined group's
estimated or anticipated future business, performance and results
of operations and financial condition, including estimates,
forecasts, targets and plans for AbbVie and, following the
acquisition, if completed, the combined group. The words "believe,"
"expect," "anticipate," "project" and similar expressions, among
others, generally identify forward-looking statements. These
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially from those
indicated in the forward-looking statements. Such risks and
uncertainties include, but are not limited to, the possibility that
a possible acquisition will not be pursued, failure to obtain
necessary regulatory approvals or required financing or to satisfy
any of the other conditions to the possible acquisition, adverse
effects on the market price of AbbVie's shares of common stock or
Allergan's ordinary shares and on AbbVie's or Allergan's operating
results because of a failure to complete the possible acquisition,
failure to realize the expected benefits of the possible
acquisition, failure to promptly and effectively integrate
Allergan's businesses, negative effects relating to the
announcement of the possible acquisition or any further
announcements relating to the possible acquisition or the
consummation of the possible acquisition on the market price of
AbbVie's shares of common stock or Allergan's ordinary shares,
significant transaction costs and/or unknown or inestimable
liabilities, potential litigation associated with the possible
acquisition, general economic and business conditions that affect
the combined companies following the consummation of the possible
acquisition, changes in global, political, economic, business,
competitive, market and regulatory forces, future exchange and
interest rates, changes in tax laws, regulations, rates and
policies, future business acquisitions or disposals and competitive
developments. These forward-looking statements are based on
numerous assumptions and assessments made in light of AbbVie's or,
as the case may be, Allergan's experience and perception of
historical trends, current conditions, business strategies,
operating environment, future developments and other factors it
believes appropriate. By their nature, forward-looking statements
involve known and unknown risks and uncertainties because they
relate to events and depend on circumstances that will occur in the
future. The factors described in the context of such
forward-looking statements in this announcement could cause
Allergan's plans with respect to AbbVie, Allergan's or AbbVie's
actual results, performance or achievements, industry results and
developments to differ materially from those expressed in or
implied by such forward-looking statements. Although it is believed
that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations
will prove to have been correct and persons reading this
announcement are therefore cautioned not to place undue reliance on
these forward-looking statements which speak only as at the date of
this announcement. Additional information about economic,
competitive, governmental, technological and other factors that may
affect AbbVie is set forth in Item 1A, "Risk Factors," in AbbVie's
2018 Annual Report on Form 10-K, which has been filed with the SEC,
the contents of which are not incorporated by reference into, nor
do they form part of, this announcement. Additional information
about economic, competitive, governmental, technological and other
factors that may affect Allergan is set forth in Item 1A, "Risk
Factors," in Allergan's 2018 Annual Report on Form 10-K, which has
been filed with the SEC, the contents of which are not incorporated
by reference into, nor do they form part of, this announcement.
Any forward-looking statements in this announcement are based
upon information available to AbbVie, Allergan and/or their
respective boards of directors, as the case may be, as of the date
of this announcement and, while believed to be true when made, may
ultimately prove to be incorrect. Subject to any obligations under
applicable Law, none of AbbVie, Allergan or any member of their
respective boards of directors undertakes any obligation to update
any forward-looking statement whether as a result of new
information, future developments or otherwise, or to conform any
forward-looking statement to actual results, future events, or to
changes in expectations. All subsequent written and oral
forward-looking statements attributable to AbbVie, Allergan or
their respective boards of directors or any person acting on behalf
of any of them are expressly qualified in their entirety by this
paragraph.
Statement Required by the Irish Takeover Rules
The AbbVie Directors accept responsibility for the information
contained in this announcement relating to AbbVie and the AbbVie
Directors and members of their immediate families, related trusts
and persons connected with them, except for the statements made by
Allergan in respect of AbbVie. To the best of the knowledge and
belief of the AbbVie Directors (who have taken all reasonable care
to ensure that such is the case), the information contained in this
announcement for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
The Allergan Directors accept responsibility for the information
contained in this announcement relating to Allergan and the
Allergan Directors and members of their immediate families, related
trusts and persons connected with them, except for the statements
made by AbbVie in respect of Allergan and the recommendation and
related opinions of the Independent Allergan Directors. The
Independent Allergan Directors accept responsibility for the
recommendation and the related opinions of the Independent Allergan
Directors contained in this announcement. To the best of the
knowledge and belief of the Allergan Directors and the Independent
Allergan Directors (who have taken all reasonable care to ensure
such is the case), the information contained in this announcement
for which they respectively accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
Morgan Stanley & Co. LLC, acting through its affiliate
Morgan Stanley & Co. International plc, which is authorized by
the Prudential Regulation Authority and regulated by the Financial
Conduct Authority in the United
Kingdom, is acting as financial adviser to AbbVie and for no
one else in relation to the matters referred to in this
announcement. In connection with such matters, Morgan Stanley and
its directors, officers, employees and agents will not regard any
other person as its client, nor will it be responsible to anyone
other than AbbVie for providing the protections afforded to their
clients or for providing advice in connection with the matters
described in this announcement or any matter referred to
herein.
PJT Partners LP, a U.S. registered broker-dealer regulated by
FINRA and a member of SIPC, is acting for AbbVie and no one else in
connection with the matters set out in this announcement and will
not be responsible to anyone other than AbbVie for providing advice
in relation to the matters in this announcement. Neither PJT
Partners LP nor any of its subsidiaries, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of PJT
Partners LP in connection with this announcement, any statement
contained herein or otherwise.
J.P. Morgan Securities LLC, which is a registered broker dealer
with the SEC, is acting as financial adviser to Allergan in
connection with the Acquisition. In connection with the
Acquisition, J.P. Morgan Securities LLC and its directors,
officers, employees and agents will not regard any other person as
its client, nor will it be responsible to anyone other than
Allergan for providing the protections afforded to clients of J.P.
Morgan Securities LLC or for giving advice in connection with the
Acquisition or any matter referred to herein.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Irish Takeover Panel
Act, 1997, Takeover Rules 2013 (the "Irish Takeover Rules"), if any
person is, or becomes, 'interested' (directly or indirectly) in, 1%
or more of any class of 'relevant securities' of Allergan or
AbbVie, all 'dealings' in any 'relevant securities' of Allergan or
AbbVie (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be
publicly disclosed by not later than 3:30
pm (New York time) on the
'business' day following the date of the relevant transaction. This
requirement will continue until the date on which the Scheme
becomes effective or on which the 'offer period' otherwise ends. If
two or more persons co-operate on the basis of any agreement,
either express or tacit, either oral or written, to acquire an
'interest' in 'relevant securities' of Allergan or AbbVie, they
will be deemed to be a single person for the purpose of Rule 8.3 of
the Irish Takeover Rules.
Under the provisions of Rule 8.1 of the Irish Takeover Rules,
all 'dealings' in 'relevant securities' of Allergan by AbbVie or
'relevant securities' of AbbVie by Allergan, or by any party acting
in concert with either of them, must also be disclosed by no later
than 12 noon (New York time) on
the 'business' day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose
'relevant securities' 'dealings' should be disclosed, can be found
on the Irish Takeover Panel's website at
www.irishtakeoverpanel.ie.
'Interests in securities' arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to changes
in the price of securities. In particular, a person will be treated
as having an 'interest' by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative
referenced to, securities.
Terms in quotation marks are defined in the Irish Takeover
Rules, which can also be found on the Irish Takeover Panel's
website. If you are in any doubt as to whether or not you are
required to disclose a dealing under Rule 8, please consult the
Irish Takeover Panel's website at www.irishtakeoverpanel.ie or
contact the Irish Takeover Panel on telephone number +353 1 678
9020 or fax number +353 1 678 9289.
No Profit Forecast / Asset Valuations
No statement in this announcement is intended to constitute a
profit forecast for any period, nor should any statements be
interpreted to mean that earnings or earnings per share will
necessarily be greater or lesser than those for the relevant
preceding financial periods for AbbVie or Allergan as appropriate.
No statement in this announcement constitutes an asset
valuation.
Publication on Website
Pursuant to Rule 2.6(c) of the Irish Takeover Rules, this
announcement will be available to AbbVie employees on AbbVie's
website www.abbvie.com and Allergan employees on Allergan's website
www.allergan.com. Neither the content of any such website nor the
content of any other website accessible from hyperlinks on such
website is incorporated into, or forms part of, this
announcement.
Right to Switch to a Takeover Offer
AbbVie reserves the right, subject to the terms of the
Transaction Agreement, to elect to implement the Acquisition by way
of a Takeover Offer as an alternative to the Scheme, subject to the
provisions of the Transaction Agreement and with the Panel's
consent. In such event, the Acquisition will be implemented on
terms at least as favorable, so far as applicable, as those which
would apply to the Scheme, subject to appropriate amendments
(including an acceptance condition set at 80% of the shares to
which such offer relates).
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, any figures shown
for the same category presented in different tables may vary
slightly and figures shown as totals in certain tables may not be
an arithmetic aggregation of the figures that precede them.
General
Appendix I to this announcement contains further details of the
sources of information and bases of calculations set out in this
announcement; Appendix II to this announcement contains definitions
of certain expressions used in this announcement; Appendix III to
this announcement contains the Conditions of the Acquisition and
the Scheme; Appendix IV to this announcement sets out the report
from PricewaterhouseCoopers LLP in respect of certain merger
benefit statements made in this announcement; Appendix V to this
announcement contains the report from Morgan Stanley in respect of
certain merger benefit statements made in this announcement and
Appendix VI to this announcement sets out the Transaction
Agreement.
The release, publication or distribution of this announcement in
or into certain jurisdictions may be restricted by the laws of
those jurisdictions, including any Restricted Jurisdictions.
Accordingly, copies of this announcement and all other documents
relating to the Acquisition are not being, and must not be,
released, published, mailed or otherwise forwarded, distributed or
sent in, into or from any Restricted Jurisdictions. Persons
receiving such documents (including, without limitation, nominees,
trustees and custodians) should observe these restrictions. Failure
to do so may constitute a violation of the securities laws of any
such jurisdiction. To the fullest extent permitted by applicable
Law, the companies involved in the Acquisition disclaim any
responsibility or liability for the violations of any such
restrictions by any person.
Any response in relation to the Acquisition should be made only
on the basis of the information contained in the Scheme Documents
or any document by which the Acquisition and the Scheme are made.
Allergan Shareholders are advised to read carefully the formal
documentation in relation to the proposed Acquisition once the
Scheme Documents have been despatched.
This announcement has been prepared for the purpose of complying
with the laws of Ireland and the
Takeover Rules and the information disclosed may not be the same as
that which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside of
Ireland.
RECOMMENDED OFFER
ABBVIE TO ACQUIRE ALLERGAN
FOR
$63 BILLION IN CASH AND STOCK
BY MEANS OF A SCHEME OF ARRANGEMENT UNDER
CHAPTER 1 OF PART 9 OF THE
COMPANIES ACT 2014
1. Introduction
The AbbVie Board and the Independent Allergan Directors
announced today that they have reached agreement on the terms of a
recommended acquisition of Allergan in a transaction valued at
approximately $63 billion of equity
value. The Acquisition will be effected by means of a Scheme under
Chapter 1 of Part 9 of the Act.
The Acquisition will be on the terms and subject to the
conditions set out below, and the implementation of the Acquisition
and the Scheme will be subject to the Conditions referred to in
Appendix III of this announcement, which will also be set out in
the Scheme Document.
2. Consideration
Under the terms of the Transaction Agreement, which has been
unanimously approved by the AbbVie Board and the Independent
Allergan Directors, at completion Allergan Shareholders will
receive 0.8660 AbbVie Shares and $120.30 in cash (and Cash Consideration in lieu
of Fractional Entitlements) for each Allergan Share that they
hold.4
Based on the closing price for AbbVie common stock on
June 24, 2019, the last trading day
prior to the date of this announcement, Allergan Shareholders will
receive cash and shares valued at $188.24 per Allergan Share, representing a
premium of 45% to the closing price of Allergan's ordinary shares
on June 24, 2019, the last trading
day prior to the date of this announcement and a transaction equity
value of approximately $63
billion.
The Acquisition is expected to be taxable, to the Allergan
Shareholders, for U.S. federal income tax purposes.
It is expected that, immediately after the closing of the
Acquisition, AbbVie Shareholders will own approximately 83% of
AbbVie on a fully diluted basis and the Allergan Shareholders will
own approximately 17% of AbbVie on a fully diluted basis.
AbbVie has secured fully underwritten financing commitments from
Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd., for an
aggregate amount of US$38.0 billion,
to finance together with AbbVie's own cash resources, the cash
portion of the Acquisition.
4 Subject to adjustment in accordance with the
Exchange Ratio Modification Number.
3. AbbVie Background to and Reasons for the
Acquisition
As a part of its on-going review of AbbVie's long-term strategy,
the AbbVie Board regularly considers strategic opportunities that
might be available to enhance shareholder value, including
additional investments in new growth opportunities and potential
acquisitions.
Beginning in late April of 2019, senior management of AbbVie and
Allergan had a series of discussions regarding the possibility of
an acquisition by AbbVie of Allergan and the possible terms of such
a transaction. In connection with a possible transaction, AbbVie
retained Morgan Stanley & Co. LLC in late May of 2019 as its
financial advisor and Kirkland & Ellis LLP and McCann FitzGerald as its legal advisors.
During the period preceding the execution of definitive
documentation for the Acquisition on June
25, 2019, the parties discussed and negotiated the
transaction terms, conducted due diligence with respect to each
other's businesses and consulted with the Panel, and AbbVie
arranged financing for the transaction. On June 24, 2019, the AbbVie Board met, together
with AbbVie's senior management and financial and legal advisors,
to consider proposed terms and drafts of definitive documentation
for a proposed acquisition by AbbVie of Allergan. At this meeting,
AbbVie's Board unanimously determined that the Transaction
Agreement and the transactions contemplated thereby, including the
Acquisition, were in the best interests of AbbVie and its
stockholders, and thereby authorized and approved the
Acquisition.
AbbVie's Board believes that the Acquisition will create a more
diversified pharmaceutical company, positioned for success in
current and future health care markets. Following the Acquisition,
AbbVie will have market leading positions in multiple therapeutic
categories, a more diversified product portfolio, and strong cash
flow.
In reaching its decision to authorize and approve the
Acquisition, the AbbVie Board consulted with and received advice
and reports from AbbVie's senior management and its financial and
legal advisors, and drew on its knowledge of AbbVie's business,
assets, financial position, operating results, historical and
current trading prices of its securities, and the opportunities and
challenges in its businesses and the industries in which it
operates, as well as information relating to Allergan and the
potential opportunities available to and future business prospects
of the combined company.
Further detail in respect of the background and reasons for the
Acquisition will be included in the Proxy Statement.
4. Allergan Background to and Reasons for Recommending
the Acquisition
The Allergan Directors have on an ongoing basis considered the
long-term strategy of Allergan and strategic opportunities that
might be available to enhance shareholder value, including
additional investments in new growth opportunities, potential
acquisitions and the possible sale of Allergan as well as a
potential spin off of certain of Allergan's businesses.
Beginning in late April of 2019, senior management of AbbVie and
Allergan had a series of discussions regarding the possibility of
an acquisition by AbbVie of Allergan and the possible terms of such
a transaction. In connection with a possible transaction, Allergan
retained J.P. Morgan Securities LLC as its financial advisor and
Wachtell, Lipton, Rosen & Katz and
Arthur Cox as its legal advisors.
During the period preceding the execution of definitive
documentation for the Acquisition on June
25, 2019, the parties discussed and negotiated the
transaction terms, conducted due diligence with respect to each
other's businesses and consulted with the Panel. Also during
this period, the Independent Allergan Directors met, together with
Allergan's senior management and its financial and legal advisors,
on various occasions to consider the merits of a potential
transaction with AbbVie and the status of the discussions and
negotiations between the parties.
On June 23, 2019, the Independent
Allergan Directors met, together with Allergan's senior management
and financial and legal advisors, to consider proposed terms and
drafts of definitive documentation for a proposed acquisition by
AbbVie of Allergan. At this meeting, the Independent Allergan
Directors unanimously determined that the Transaction Agreement and
the transactions contemplated thereby, including the Scheme, were
advisable for, fair to and in the best interests of Allergan and
the Allergan Shareholders, and thereby approved the Acquisition and
determined that the terms of the Scheme were fair and
reasonable.
In reaching its decision to approve the Acquisition, the
Independent Allergan Directors consulted with and received advice
and reports from Allergan's senior management and its financial and
legal advisors, and drew on its knowledge of Allergan's business,
assets, financial position, operating results, historical and
current trading prices of its securities, and the opportunities and
challenges in its businesses and the industries in which it
operates, as well as information relating to AbbVie and the
potential opportunities available to and future business prospects
of the combined company. After giving consideration to these and a
variety of other factors and risks, the Independent Allergan
Directors unanimously determined to recommend that Allergan
Shareholders vote in favor of the Acquisition.
Further detail in respect of the background and reasons for the
Acquisition will be included in the Proxy Statement.
5. Allergan Recommendation
The Independent Allergan Directors, who have been so advised by
J.P. Morgan Securities LLC as to the financial terms of the
Acquisition, consider the terms of the Acquisition to be fair and
reasonable. In providing its advice, J.P. Morgan Securities LLC has
taken into account the commercial assessments of the Independent
Allergan Directors. J.P. Morgan Securities LLC is acting as
independent financial adviser to the Independent Allergan Directors
in relation to the Acquisition for the purposes of Rule 3 of the
Takeover Rules.
Accordingly, the Independent Allergan Directors unanimously
recommend to Allergan Shareholders to vote in favor of the
Acquisition and the Scheme, as the Independent Allergan Directors
who are Allergan Shareholders intend to do in respect of their own
beneficial holdings of, in the aggregate, 63,690 Allergan
Shares.
Thomas C. Freyman is not
participating in the Independent Allergan Directors' recommendation
of the Acquisition and related matters as Mr. Freyman is regarded
under Rule 3 of the Irish Takeover Rules as having a conflict of
interest due to Mr. Freyman's shareholding in AbbVie.
6. The Acquisition and the Scheme
The Acquisition will be effected by means of a "scheme of
arrangement" in accordance with Chapter 1 of Part 9 of the Act
pursuant to which Acquirer Sub, a wholly owned subsidiary of
AbbVie, will acquire all of the outstanding Allergan Shares in
exchange for 0.8660 AbbVie Shares and $120.30 in cash (and Cash Consideration in lieu
of Fractional Entitlements) per Allergan Share, subject to
adjustment in accordance with the Exchange Ratio Modification
Number. The Acquisition will be subject to the Conditions set out
in Appendix III to this announcement and to be set forth in the
Scheme described in the Scheme Document which will be delivered to
Allergan Shareholders.
To become effective, the Scheme will require, among other
things, the approval of the Scheme by a majority in number of
members of each class of Allergan Shareholders (including as may be
directed by the High Court pursuant to Section 450(5) of the Act)
present and voting either in person or by proxy at the Court
Meeting (or at any adjournment or postponement of such meeting)
representing, at the relevant voting record time, at least 75% in
value of the Allergan Shares of that class held by such Allergan
Shareholders and (ii) the Required EGM Resolutions being duly
passed by the requisite majorities of Allergan Shareholders at the
EGM (or any adjournment or postponement thereof). Following the
Allergan Shareholder Approval being obtained and the satisfaction
or (where applicable) waiver of the other conditions to the
consummation of the Scheme, the sanction of the Irish High Court is
also required. The Acquisition, which is unanimously recommended by
the AbbVie Board and the Independent Allergan Directors, is also
subject to receipt of certain regulatory approvals and certain
other conditions, as more particularly set out in Appendix III of
this announcement.
Assuming the necessary approvals from the Allergan Shareholders
have been obtained and all other conditions have been satisfied or
waived (where applicable), the Scheme will become effective upon
delivery to the Irish Registrar of Companies of a copy of the Court
Order of the Irish High Court sanctioning the Scheme together with
the minute required by section 86 of the Act confirming a capital
reduction to take place in connection with the Acquisition and
registration of the Court Order and minute by the Irish Registrar
of Companies. Upon the Scheme becoming effective, the Scheme will
be binding on all Allergan Shareholders, irrespective of whether or
not they attended or voted at the Court Meeting or the EGM.
The Acquisition will be conditional upon the Scheme becoming
effective. The Conditions to the Acquisition and the Scheme are set
out in full in Appendix III to this announcement. The
implementation of the Scheme is conditional, amongst other things,
upon:
(a) the approval by the Allergan Shareholders and the sanction
by the Irish High Court of the Scheme;
(b) the approval for listing on NYSE (subject only to certain
standard conditions) of all of the AbbVie Shares to be issued in
the Acquisition;
(c) all applicable waiting periods under the HSR Act in
connection with the Acquisition having expired or having been
terminated, and, to the extent applicable, any agreement between
Allergan and AbbVie, on the one hand, and the Federal Trade
Commission or the Antitrust Division of the United States
Department of Justice, on the other hand, not to consummate the
Scheme or the Acquisition having expired or been earlier
terminated;
(d) to the extent (i) the Acquisition constitutes a
concentration within the scope of the EC Merger Regulation or
otherwise is a concentration that is subject to the EC Merger
Regulation, the European Commission having decided to allow the
closing of the Acquisition, and (ii) that all or part of the
Acquisition is referred by the European Commission to the relevant
authority of one or more member countries of the European Economic
Area, such relevant authority(ies) (in the case of a partial
referral in conjunction with a final decision of the European
Commission) having issued a final decision or decisions which
satisfies (or together satisfy) the prior clause (i) (that clause
being interpreted mutatis mutandis);
(e) all required Clearances of any Governmental Entity
having been obtained and remaining in full force and effect and all
applicable waiting periods having expired, lapsed or been
terminated (as appropriate), in each case in connection with the
Acquisition, under the Antitrust Laws of each Required Antitrust
Jurisdiction, and (a) no order, writ, decree, judgment, or
injunction (whether temporary or permanent) shall have been issued,
promulgated, made, rendered or entered into by any court or other
tribunal of competent jurisdiction, and (b) no Law other than an
order, writ, decree, judgement or injunction described in clause
(a) (whether or not final or appealable) (excluding, for the
purpose of this clause (b), any Antitrust Law of any jurisdiction
that is not a Required Antitrust Jurisdiction) shall have been
enacted, issued, promulgated, enforced or entered and continue in
effect and, in each case of clauses (a) and (b), restrain, enjoin,
make illegal or otherwise prohibit the consummation of the
Acquisition;
(f) the Transaction Agreement not having been terminated in
accordance with its terms;
(g) the absence of a material adverse effect with respect
to each party;
(h) the accuracy of each of the parties' representations
and warranties, except generally as would not have a material
adverse effect on such party; and
(i) the performance by each party, in all material
respects, with all of its covenants and agreements under the
Transaction Agreement.
The Scheme Document, containing further information relating to
the implementation of the Acquisition, the full terms and
Conditions of the Scheme, and the notices of the Court Meeting, to
be convened by resolution of the Allergan Board or direction of the
Irish High Court, and the separate EGM required to approve the
Scheme and related resolutions will be mailed as promptly as
reasonably practicable after securing approval of the High Court to
despatch such documents to Allergan Shareholders and, for
information only, to holders of Allergan Options and Allergan Share
Awards.
The Proxy Statement will contain important information about the
Acquisition (including the Scheme), the Transaction Agreement, the
Court Meeting and the EGM.
7. Merger Benefit Statement
AbbVie anticipates that the Acquisition will provide annual
pre-tax synergies and other cost reductions of at least
$2 billion in year three while
leaving investments in key growth franchises untouched. The
synergies and other cost reductions will be a result of optimizing
the research and early stage portfolio, and reducing overlapping
R&D resources (~50%), driving efficiencies in SG&A,
including sales and marketing and central support function costs
(~40%), and eliminating redundancies in manufacturing and supply
chain, and leveraging procurement spend (~10%). The synergies
estimate excludes any potential revenue synergies.
Subject to the Scheme becoming effective, Allergan Shareholders
will be able to share in the synergies and other cost reductions
resulting from the Acquisition by means of the AbbVie Shares they
will receive as part of the Scheme Consideration.
There are various material assumptions underlying the synergies
and other cost reductions estimates which may result in the
synergies and other cost reductions being materially greater or
less than estimated. The estimate of synergies and other cost
reductions should therefore be read in conjunction with the key
assumptions underlying the estimates set out in Appendix I of this
announcement.
The synergies and other cost reductions statements should not be
construed as a profit forecast or interpreted to mean that AbbVie's
profits or earnings in the first full year following the
Acquisition, or in any subsequent period, would necessarily match
or be greater than or be less than those of AbbVie and/or Allergan
for the relevant preceding financial period or any other
period.
The estimate of synergies set out in this announcement has been
reported on for the purposes of Rule 19.3(b)(ii) of the Irish
Takeover Rules by (i) PricewaterhouseCoopers LLP and (ii) Morgan
Stanley & Co. International plc. Copies of their respective
reports are included in Appendix IV and Appendix V to this
announcement. Each of PricewaterhouseCoopers LLP and Morgan
Stanley & Co. International plc has given and not withdrawn its
consent to the issue of this announcement with the inclusion of its
report.
8. About AbbVie and Acquirer Sub
AbbVie is a global, research-driven biopharmaceutical company
committed to developing innovative advanced therapies for some of
the world's most complex and critical conditions. The company's
mission is to use its expertise, dedicated people and unique
approach to innovation to markedly improve treatments across four
primary therapeutic areas: immunology, oncology, virology and
neuroscience. In more than 75 countries, AbbVie employees are
working every day to advance health solutions for people around the
world. For more information about AbbVie, please visit us at
www.abbvie.com. Follow @abbvie on Twitter, Facebook or
LinkedIn.
Acquirer Sub, a wholly-owned subsidiary of AbbVie, is a limited
liability company organized in Delaware solely for the purpose of effecting
the Acquisition. To date, Acquirer Sub has not conducted any
activities other than those incidental to its formation and the
execution of the Transaction Agreement.
9. About Allergan
Allergan, headquartered in Dublin, Ireland, is a global pharmaceutical leader
focused on developing, manufacturing and commercializing branded
pharmaceutical, device, biologic, surgical and regenerative
medicine products for patients around the world. Allergan
markets a portfolio of brands and products primarily focused on
four key therapeutic areas including medical aesthetics, eye care,
central nervous system and gastroenterology. As part of its
approach to delivering innovation for better patient
care, Allergan has built a broad pharmaceutical and
device research and development pipelines.
With employees and commercial operations in approximately 100
countries, Allergan is committed to working with
physicians, healthcare providers and patients to deliver innovative
and meaningful treatments that help people around the world live
longer, healthier lives every day.
For press release and other company information, please visit
Allergan's web site at www.allergan.com.
10. Effect of the Scheme on Allergan Options and Allergan
Share Awards
Pursuant to the terms of the Transaction Agreement, Allergan's
outstanding equity awards will be treated as follows: (i) each
unexercised Allergan Option will be substituted with an Allergan
Replacement Option, with the exercise price per AbbVie Share and
the number of AbbVie Shares underlying the Allergan Replacement
Option adjusted to reflect the conversion from Allergan Shares into
AbbVie Shares, and (ii) each other Allergan Share Award, including
Allergan RSU Awards, Allergan PSUs and Allergan Restricted Stock
Awards, will be substituted with an Allergan Replacement Share
Award, with the number of AbbVie Shares underlying each such
Allergan Replacement Share Award adjusted to reflect the conversion
from Allergan Shares into AbbVie Shares. AbbVie restricted
stock unit awards will be granted in substitution for Allergan
PSUs, and the number of AbbVie Shares underlying each Allergan PSU
with a performance period that remains subject to performance
vesting conditions as of the date of the Transaction
Agreement (i.e., any Allergan PSU for which the level
of performance has not been determined) will equal 130% of the
target number of Allergan Shares subject to such Allergan
PSU. Each Allergan Replacement Option and Allergan
Replacement Share Award will continue to have, and be subject to,
the same terms and conditions (including, for each Allergan PSU,
the time vesting conditions provided in the applicable award
agreement, but excluding any performance-based vesting conditions)
that applied to the corresponding Allergan Option or Allergan Share
Award, as applicable (except for terms rendered inoperative by
reason of the Acquisition or for immaterial administrative or
ministerial changes that are not adverse to any holder other than
in any de minimis respect).
11. Management and Employees
Pursuant to the terms of the Transaction Agreement, AbbVie has
given certain assurances in relation to the continuation of certain
existing compensation and employment benefit arrangements of
Allergan's employees following the Acquisition. Further details in
this regard will be included in the Scheme Document.
12. Delisting of Allergan Shares
It is intended that, subject to and following the Scheme
becoming effective, and subject to applicable requirements of the
NYSE, the Allergan Shares will be delisted from the NYSE and
deregistered, along with other securities of Allergan under the
Exchange Act, as promptly as practicable after the Effective
Time.
13. Financing
AbbVie has secured fully underwritten financing commitments from
Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd., for an
aggregate amount of US$38.0 billion,
to finance together with AbbVie's own cash resources, the cash
portion of the Acquisition. Further information on the financing of
the Acquisition will be set out in the Scheme Document.
Morgan Stanley & Co. LLC, acting through its affiliate
Morgan Stanley & Co. International plc, financial advisor to
AbbVie, is satisfied that sufficient resources are available to
satisfy in full the Cash Consideration payable to Allergan
Shareholders under the terms of the Acquisition.
14. Expenses Reimbursement Agreement
Allergan has entered into the Expenses Reimbursement Agreement,
dated June 25, 2019 with AbbVie, the
terms of which have been approved by the Panel. Under the Expenses
Reimbursement Agreement, Allergan has agreed to pay to AbbVie in
certain circumstances an amount equal to all documented, specific,
quantifiable third party costs and expenses incurred, directly or
indirectly, by AbbVie and/or its subsidiaries, or on their behalf,
for the purposes of, in preparation for, or in connection with the
Acquisition, including, but not limited to, third party costs and
expenses incurred in connection with exploratory work carried out
in contemplation of and in connection with the Acquisition, legal,
financial and commercial due diligence, the arrangement of
financing and the engagement of third party representatives to
assist in the process. The liability of Allergan to pay these
amounts shall arise only after the date of this announcement and is
limited to a maximum amount equal to 1% of the aggregate value of
the total Scheme Consideration (excluding, for the avoidance of
doubt, any interest in such share capital of Allergan held by
AbbVie or any Concert Parties of AbbVie). The circumstances in
which such payment will be made are if:
(a) the Transaction Agreement is terminated:
(i) by AbbVie at any time prior to
the receipt of the Allergan Shareholder Approval, due to an
Allergan Change of Recommendation having occurred; or
(ii) by Allergan, at any time
prior to obtaining the Allergan Shareholder Approval, in response
to an Allergan Superior Proposal and, substantially concurrently
with such termination, a written definitive agreement providing for
the consummation of transactions contemplated by such Allergan
Superior Proposal is duly executed and delivered by Allergan and
all other parties thereto; or
(b) all of the following occur:
(i) the Transaction Agreement is
terminated (x) by AbbVie if Allergan breached or failed to perform
in any material respect any of its covenants or other agreements
contained in the Transaction Agreement, which breach or failure to
perform (1) would have resulted in a failure of the Condition set
forth in paragraph 4(iii) of Appendix III and (2) was not
reasonably capable of being cured by the End Date or, if curable,
is not cured by the earlier of (a) the End Date and (b) 30 days
following written notice by AbbVie thereof or (y) by AbbVie or
Allergan, if the Court Meeting or the EGM was completed and the
Court Meeting Resolution or the Required EGM Resolutions, as
applicable, were not approved by the requisite majorities; and
(ii) prior to the Court Meeting,
an Allergan Alternative Proposal was publicly disclosed or
announced (or, in the case of a termination described in paragraph
(b)(i)(x) above, was made publicly or privately to the Allergan
Board), or any person shall have publicly announced an intention
(whether or not conditional) to make an Allergan Alternative
Proposal (it being understood that, for purposes of this paragraph
(b)(ii) and paragraph (b)(iii) below, references to "twenty percent
(20%)" in the definition of Allergan Alternative Proposal shall be
deemed to refer to "fifty percent (50)%"); and
(iii) (x) an Allergan Alternative
Proposal is consummated within twelve months after such
termination, or (y) a definitive agreement providing for an
Allergan Alternative Proposal is entered into within twelve months
after such termination and which is subsequently consummated, in
the case of each of clauses (x) and (y), regardless of whether such
Allergan Alternative Proposal is the same Allergan Alternative
Proposal referred to in paragraph (b)(ii) above.
Each of J.P. Morgan Securities LLC and the Independent Allergan
Directors have confirmed in writing to the Panel that, in the
opinion of J.P. Morgan Securities LLC and the Independent Allergan
Directors (respectively), in the context of the note to Rule 21.2
of the Takeover Rules and the Acquisition, the Expenses
Reimbursement Agreement is in the best interests of the Allergan
Shareholders. The Panel has consented to Allergan entering into the
Expenses Reimbursement Agreement.
15. Transaction Agreement
AbbVie, Allergan and Acquirer Sub have entered into the
Transaction Agreement dated June 25,
2019 which contains certain assurances, obligations and
commitments in relation to the implementation of the Scheme,
including provisions in relation to the conduct of Allergan's
business between the date of this announcement and the Effective
Date and other matters relating to the Acquisition. A copy of the
Transaction Agreement is appended to this announcement at Appendix
VI and a summary of the principal terms of the Transaction
Agreement will be set out in the Proxy Statement (which will also
contain the Scheme Document).
The Proxy Statement, which will be filed with the SEC, will
contain important information about the Acquisition (including the
Scheme), the Transaction Agreement, the Court Meeting and the
EGM.
The Transaction Agreement provides that, upon termination of the
Transaction Agreement under certain circumstances relating to the
failure to obtain antitrust approvals, AbbVie will pay Allergan a
reverse termination fee of $1.25
billion.
16. Disclosure of Interests in Relevant Securities of
Allergan
As at the close of business on June 21,
2019 (being the last practicable date prior to the release
of this announcement), Morgan Stanley & Co. LLC, financial
adviser to AbbVie and any person (other than an exempt principal
trader or an exempt fund manager) controlling, controlled by, or
under the same control as, Morgan Stanley & Co. LLC was
interested in, or held short positions in, the Allergan securities
set out in Appendix I to this announcement.
Save as described above, as at the close of business on
June 21, 2019, none of AbbVie,
Acquirer Sub or, so far as AbbVie is aware, any person Acting in
Concert with AbbVie:
(a) had an interest in relevant securities of Allergan;
(b) had any short position in relevant securities of
Allergan;
(c) had received an irrevocable commitment or letter of
intent to accept the terms of the Acquisition in respect of
relevant securities of Allergan; or
(d) had borrowed or lent any Allergan Shares.
Furthermore, no arrangement to which Rule 8.7 of the Takeover
Rules applies exists between AbbVie, Acquirer Sub or Allergan or a
person Acting in Concert with AbbVie, Acquirer Sub or Allergan in
relation to Allergan Shares. For these purposes, an "arrangement to
which Rule 8.7 of the Takeover Rules applies" includes any
indemnity or option arrangement, and any agreement or
understanding, formal or informal, of whatever nature, between two
or more persons relating to relevant securities which is or may be
an inducement to one or more of such persons to deal or refrain
from dealing in such securities.
In the interests of confidentiality, AbbVie, Acquirer Sub and
Morgan Stanley have made only limited enquiries in respect of
certain parties who may be deemed by the Panel to be Acting in
Concert with them for the purposes of the Acquisition. Further
enquiries will be made to the extent necessary as soon as
practicable following the date of this announcement and any
disclosure in respect of such parties will be included in the
Scheme Document.
17. Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Takeover Rules, Allergan
(NYSE: AGN) confirms that, as of the close of business on
June 24, 2019, Allergan's issued
share capital, excluding treasury shares, consisted of 327,823,903
ordinary shares, par value US$0.0001
per share. The International Securities Identification Number
(ISIN) of the Allergan ordinary shares is IE00BY9D5467.
Allergan confirms that, as of the close of business on
June 24, 2019, there were outstanding
2,861,241 restricted share units (the "Allergan Restricted Share
Units") and 6,342,739 options to purchase Allergan ordinary
shares (the "Allergan Share Options") granted by Allergan.
Upon vesting, each Allergan Restricted Share Unit entitles the
holder to receive one Allergan ordinary share and each Allergan
Share Option entitles the holder to purchase one Allergan ordinary
share at the applicable exercise price.
Allergan also confirms that, as of the close of business on June
24, 2019, there were outstanding performance share units (the
"Allergan Performance Share Units") entitling holders to receive up
to a maximum of 482,892 Allergan ordinary shares upon vesting,
assuming satisfaction of the applicable performance criteria at
maximum performance.
The number of Allergan Shares capable of being issued in respect
of the Allergan Restricted Share Units and Allergan Performance
Share Units described in this announcement includes the Allergan
ordinary shares capable of being issued upon the vesting of the
applicable dividend equivalent units attaching to the respective
Allergan Restricted Share Units and Allergan Performance Share
Units.
18. Rule 30.2 Derogation
Rule 30.2 of the Irish Takeover Rules requires that, except with
the consent of the Panel, and subject to Rule 2.7 of the Irish
Takeover Rules, Allergan must despatch the Scheme Document to
Allergan Shareholders within 28 days of the announcement of a firm
intention to make an offer, being this announcement.
On June 24, 2019 the Panel agreed
to grant the parties a derogation from Rule 30.2.
There is a requirement to file the Proxy Statement (which will
also contain the Scheme Document) with the SEC in connection with
the Scheme. The preparation of the Proxy Statement may take more
than 28 days. Also, the SEC may elect to review the Proxy
Statement. This review process may take 60 days or more to
complete. Under SEC rules, the Proxy Statement may not be
despatched to Allergan's Shareholders until such review is
complete. The Panel granted the derogation on the basis that the
Scheme Document cannot be despatched until the SEC's review of the
Proxy Statement is completed. The Scheme Document will be
despatched to Allergan's Shareholders as soon as practicable after
a definitive Proxy Statement is filed.
19. General
The Acquisition and the Scheme will be made subject to the
Conditions and the further terms and conditions to be set out in
the Scheme Document. The Scheme Document will include full details
of the Acquisition and will be accompanied by the appropriate forms
of proxy.
AbbVie reserves the right, subject to the terms of the
Transaction Agreement, to elect to implement the Acquisition by way
of a Takeover Offer as an alternative to the Scheme, subject to the
provisions of the Transaction Agreement and with the Panel's
consent. In such event, the Acquisition will be implemented on
terms at least as favourable, so far as applicable, as those which
would apply to the Scheme, subject to appropriate amendments
(including an acceptance condition set at 80% of the shares to
which such offer relates).
The Transaction Agreement is governed by the laws of the
State of Delaware. However, the
Acquisition and the Scheme and matters related thereto (including
matters related to the Takeover Rules) shall, to the extent
required by the laws of Ireland, be governed by, and
construed in accordance with, the laws of Ireland. The interpretation of the duties of
directors of Allergan shall also be governed by, and construed in
accordance with, the laws of Ireland.
Appendix I to this announcement contains further details of the
sources of information and bases of calculations set out in this
announcement; Appendix II to this announcement contains definitions
of certain expressions used in this announcement; Appendix III to
this announcement contains the Conditions of the Acquisition and
the Scheme; Appendix IV to this announcement sets out the report
from PricewaterhouseCoopers LLP in respect of certain merger
benefit statements made in this announcement; Appendix V to this
announcement contains the report from Morgan Stanley & Co.
International plc, in respect of certain merger benefit statements
made in this announcement and Appendix VI to this announcement sets
out the Transaction Agreement.
ENQUIRIES
AbbVie
|
|
Media: Adelle
Infante
|
+ 1 847 938
8745
|
|
|
Investors:
Liz Shea
|
+ 1 847 935
2211
|
|
|
Morgan Stanley
(lead financial advisor to AbbVie)
|
|
Clint
Gartin
|
+1 212 761
4000
|
|
|
Michael
Boublik
|
+1 212 761
4000
|
|
|
Joe
Modisett
|
+1 212 761
4000
|
|
|
David
Kitterick
|
+44 207 425
8000
|
|
|
Allergan
|
|
|
|
Media: Amy
Rose
|
+ 1 862 289
3072
|
|
|
Investors:
Manisha Narasimhan,
PhD
|
+ 1 862 261
7162
|
|
|
J.P. Morgan
Securities LLC (exclusive financial advisor to
Allergan)
|
|
Jeremy
Meilman
|
+ 1 212 270
6000
|
|
|
Thomas
Monaghan
|
+ 1 212 270
6000
|
|
|
Dwayne
Lysaght
|
+44 207 742
4000
|
|
|
David
Connern
|
+44 207 742
4000
|
NO OFFER OR SOLICITATION
This announcement is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction
pursuant to the acquisition or otherwise, nor shall there be any
sale, issuance or transfer of securities in any jurisdiction in
contravention of applicable law. In particular, this announcement
is not an offer of securities for sale into the United
States. No offer of securities shall be made in the United States absent registration under
the U.S. Securities Act of 1933, as amended, or pursuant to an
exemption from, or in a transaction not subject to, such
registration requirements. Any securities issued in the acquisition
are anticipated to be issued in reliance upon available exemptions
from such registration requirements pursuant to Section 3(a)(10) of
the U.S. Securities Act of 1933, as amended. The acquisition will
be made solely by means of the Scheme Document (or, if applicable,
the Takeover Offer Document), which will contain the full terms and
conditions of the acquisition, including details with respect to
the Allergan shareholder vote in respect of the acquisition.
Any decision in respect of, or other response to, the acquisition,
should be made only on the basis of the information contained in
the Scheme Document.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE
SEC
In connection with the proposed Acquisition, Allergan will file
with the U.S. Securities and Exchange Commission (the "SEC") a
Proxy Statement, which will include the Scheme Document. BEFORE
MAKING ANY VOTING DECISION, Allergan'S SHAREHOLDERS ARE URGED TO
READ THE PROXY STATEMENT, INCLUDING THE SCHEME DOCUMENT, AND OTHER
RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED ACQUISITION OR INCORPORATED BY REFERENCE IN THE
PROXY STATEMENT (IF ANY) CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED ACQUISITION AND THE PARTIES TO THE PROPOSED
ACQUISITION. Allergan's shareholders and investors will be able to
obtain, without charge, a copy of the Proxy Statement, including
the Scheme Document, and other relevant documents filed with the
SEC (when available) from the SEC's website at http://www.sec.gov.
Allergan shareholders and investors will also be able to obtain,
without charge, a copy of the Proxy Statement, including the Scheme
Document, and other relevant documents (when available) by
directing a written request to Allergan plc, Clonshaugh Business
and Technology Park, Coolock, Dublin, D17 E400, Ireland, Attention: Investor Relations, or
from Allergan's website, www.allergan.com.
PARTICIPANTS IN THE SOLICITATION
Allergan and certain of its directors and executive officers and
employees may be considered participants in the solicitation of
proxies from the shareholders of Allergan in respect of the
transactions contemplated by the Scheme Document. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of the shareholders of
Allergan in connection with the proposed transactions, including a
description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the Scheme Document
when it is filed with the SEC. Information regarding Allergan's
directors and executive officers is contained in Allergan's Annual
Report on Form 10-K for the fiscal year ended December 31, 2018 and its Proxy Statement on
Schedule 14A, dated March 22, 2019,
which are filed with the SEC, and certain of Allergan's Current
Reports on Form 8-K filed with the SEC on February 19, 2019, March
22, 2019 and May 1, 2019.
FORWARD-LOOKING STATEMENTS
This announcement contains certain forward-looking statements
with respect to a possible acquisition involving AbbVie and
Allergan and AbbVie's, Allergan's and/or the combined group's
estimated or anticipated future business, performance and results
of operations and financial condition, including estimates,
forecasts, targets and plans for AbbVie and, following the
Acquisition, if completed, the combined company. The words
"believe," "expect," "anticipate," "project" and similar
expressions, among others, generally identify forward-looking
statements. These forward-looking statements are subject to risks
and uncertainties that may cause actual results to differ
materially from those indicated in the forward-looking statements.
Such risks and uncertainties include, but are not limited to, the
possibility that a possible acquisition will not be pursued,
failure to obtain necessary regulatory approvals or required
financing or to satisfy any of the other conditions to the possible
acquisition, adverse effects on the market price of AbbVie's shares
of common stock or Allergan's ordinary shares and on AbbVie's or
Allergan's operating results because of a failure to complete the
possible acquisition, failure to realize the expected benefits of
the possible acquisition, failure to promptly and effectively
integrate Allergan's businesses, negative effects relating to the
announcement of the possible acquisition or any further
announcements relating to the possible acquisition or the
consummation of the possible acquisition on the market price of
AbbVie's shares of common stock or Allergan's ordinary shares,
significant transaction costs and/or unknown or inestimable
liabilities, potential litigation associated with the possible
acquisition, general economic and business conditions that affect
the combined companies following the consummation of the possible
acquisition, changes in global, political, economic, business,
competitive, market and regulatory forces, future exchange and
interest rates, changes in tax laws, regulations, rates and
policies, future business acquisitions or disposals and competitive
developments. These forward-looking statements are based on
numerous assumptions and assessments made in light of AbbVie's or,
as the case may be, Allergan's experience and perception of
historical trends, current conditions, business strategies,
operating environment, future developments and other factors it
believes appropriate. By their nature, forward-looking statements
involve known and unknown risks and uncertainties because they
relate to events and depend on circumstances that will occur in the
future. The factors described in the context of such
forward-looking statements in this announcement could cause
Allergan's plans with respect to AbbVie, Allergan's or AbbVie's
actual results, performance or achievements, industry results and
developments to differ materially from those expressed in or
implied by such forward-looking statements. Although it is believed
that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations
will prove to have been correct and persons reading this
announcement are therefore cautioned not to place undue reliance on
these forward-looking statements which speak only as at the date of
this announcement. Additional information about economic,
competitive, governmental, technological and other factors that may
affect AbbVie is set forth in Item 1A, "Risk Factors," in AbbVie's
2018 Annual Report on Form 10-K, which has been filed with the SEC,
the contents of which are not incorporated by reference into, nor
do they form part of, this announcement. Additional information
about economic, competitive, governmental, technological and other
factors that may affect Allergan is set forth in Item 1A, "Risk
Factors," in Allergan's 2018 Annual Report on Form 10-K, which has
been filed with the SEC, the contents of which are not incorporated
by reference into, nor do they form part of, this announcement.
Any forward-looking statements in this announcement are based
upon information available to AbbVie, Allergan and/or their
respective boards of directors, as the case may be, as of the date
of this announcement and, while believed to be true when made, may
ultimately prove to be incorrect. Subject to any obligations under
applicable Law, none of AbbVie, Allergan or any member of their
respective boards of directors undertakes any obligation to update
any forward-looking statement whether as a result of new
information, future developments or otherwise, or to conform any
forward-looking statement to actual results, future events, or to
changes in expectations. All subsequent written and oral
forward-looking statements attributable to AbbVie, Allergan or
their respective boards of directors or any person acting on behalf
of any of them are expressly qualified in their entirety by this
paragraph.
Statement Required by the Irish Takeover Rules
The AbbVie Directors accept responsibility for the information
contained in this announcement relating to AbbVie and the AbbVie
Directors and members of their immediate families, related trusts
and persons connected with them, except for the statements made by
Allergan in respect of AbbVie. To the best of the knowledge and
belief of the AbbVie Directors (who have taken all reasonable care
to ensure that such is the case), the information contained in this
announcement for which they accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
The Allergan Directors accept responsibility for the information
contained in this announcement relating to Allergan and the
Allergan Directors and members of their immediate families, related
trusts and persons connected with them, except for the statements
made by AbbVie in respect of Allergan and the recommendation and
related opinions of the Independent Allergan Directors. The
Independent Allergan Directors accept responsibility for the
recommendation and the related opinions of the Independent Allergan
Directors contained in this announcement. To the best of the
knowledge and belief of the Allergan Directors and the Independent
Allergan Directors (who have taken all reasonable care to ensure
such is the case), the information contained in this announcement
for which they respectively accept responsibility is in accordance
with the facts and does not omit anything likely to affect the
import of such information.
Morgan Stanley & Co. LLC, acting through its affiliate
Morgan Stanley & Co. International plc, which is authorized by
the Prudential Regulation Authority and regulated by the Financial
Conduct Authority in the United
Kingdom, is acting as financial adviser to AbbVie and for no
one else in relation to the matters referred to in this
announcement. In connection with such matters, Morgan Stanley, its
affiliates and its respective directors, officers, employees and
agents will not regard any other person as their client, nor will
it be responsible to anyone other than AbbVie for providing the
protections afforded to their clients or for providing advice in
connection with the matters described in this announcement or any
matter referred to herein.
PJT Partners LP, a U.S. registered broker-dealer regulated by
FINRA and a member of SIPC, is acting for AbbVie and no one else in
connection with the matters set out in this announcement and will
not be responsible to anyone other than AbbVie for providing advice
in relation to the matters in this announcement. Neither PJT
Partners LP nor any of its subsidiaries, branches or affiliates
owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of PJT
Partners LP in connection with this announcement, any statement
contained herein or otherwise.
J.P. Morgan Securities LLC, which is a registered broker dealer
with the SEC, is acting as financial adviser to Allergan in
connection with the Acquisition. In connection with the
Acquisition, J.P. Morgan Securities LLC and its directors,
officers, employees and agents will not regard any other person as
its client, nor will it be responsible to anyone other than
Allergan for providing the protections afforded to clients of J.P.
Morgan Securities LLC or for giving advice in connection with the
Acquisition or any matter referred to herein.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Irish Takeover Panel
Act, 1997, Takeover Rules 2013 (the "Irish Takeover Rules"), if any
person is, or becomes, 'interested' (directly or indirectly) in, 1%
or more of any class of 'relevant securities' of Allergan or
AbbVie, all 'dealings' in any 'relevant securities' of Allergan or
AbbVie (including by means of an option in respect of, or a
derivative referenced to, any such 'relevant securities') must be
publicly disclosed by not later than 3:30
pm (New York time) on the
'business' day following the date of the relevant transaction. This
requirement will continue until the date on which the Scheme
becomes effective or on which the 'offer period' otherwise ends. If
two or more persons co-operate on the basis of any agreement,
either express or tacit, either oral or written, to acquire an
'interest' in 'relevant securities' of Allergan or AbbVie, they
will be deemed to be a single person for the purpose of Rule 8.3 of
the Irish Takeover Rules.
Under the provisions of Rule 8.1 of the Irish Takeover Rules,
all 'dealings' in 'relevant securities' of Allergan by AbbVie or
'relevant securities' of AbbVie by Allergan, or by any party acting
in concert with either of them, must also be disclosed by no later
than 12 noon (New York time) on
the 'business' day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose
'relevant securities' 'dealings' should be disclosed, can be found
on the Irish Takeover Panel's website at
www.irishtakeoverpanel.ie.
'Interests in securities' arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to changes
in the price of securities. In particular, a person will be treated
as having an 'interest' by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative
referenced to, securities.
Terms in quotation marks are defined in the Irish Takeover
Rules, which can also be found on the Irish Takeover Panel's
website. If you are in any doubt as to whether or not you are
required to disclose a dealing under Rule 8, please consult the
Irish Takeover Panel's website at www.irishtakeoverpanel.ie or
contact the Irish Takeover Panel on telephone number +353 1 678
9020 or fax number +353 1 678 9289.
No Profit Forecast / Asset Valuations
No statement in this announcement is intended to constitute a
profit forecast for any period, nor should any statements be
interpreted to mean that earnings or earnings per share will
necessarily be greater or lesser than those for the relevant
preceding financial periods for AbbVie or Allergan as appropriate.
No statement in this announcement constitutes an asset
valuation.
Publication on Website
Pursuant to Rule 2.6(c) of the Irish Takeover Rules, this
announcement will be available to AbbVie employees on AbbVie's
website www.abbvie.com and Allergan employees on Allergan's website
www.Allergan.com. Neither the content of any such website nor the
content of any other website accessible from hyperlinks on such
website is incorporated into, or forms part of, this
announcement.
Right to Switch to a Takeover Offer
AbbVie reserves the right, subject to the terms of the
Transaction Agreement, to elect to implement the Acquisition by way
of a Takeover Offer as an alternative to the Scheme, subject to the
provisions of the Transaction Agreement and with the Panel's
consent. In such event, the Acquisition will be implemented on
terms at least as favorable, so far as applicable, as those which
would apply to the Scheme, subject to appropriate amendments
(including an acceptance condition set at 80% of the shares to
which such offer relates).
Rounding
Certain figures included in this announcement have been
subjected to rounding adjustments. Accordingly, any figures shown
for the same category presented in different tables may vary
slightly and figures shown as totals in certain tables may not be
an arithmetic aggregation of the figures that precede them.
General
Appendix I to this announcement contains further details of the
sources of information and bases of calculations set out in this
announcement; Appendix II to this announcement contains definitions
of certain expressions used in this announcement; Appendix III to
this announcement contains the Conditions of the Acquisition and
the Scheme; Appendix IV to this announcement sets out the report
from PricewaterhouseCoopers LLP in respect of certain merger
benefit statements made in this announcement; Appendix V to this
announcement contains the report from Morgan Stanley & Co.
International plc, in respect of certain merger benefit statements
made in this announcement and Appendix VI to this announcement sets
out the Transaction Agreement.
The release, publication or distribution of this announcement in
or into certain jurisdictions may be restricted by the laws of
those jurisdictions, including any Restricted Jurisdictions.
Accordingly, copies of this announcement and all other documents
relating to the Acquisition are not being, and must not be,
released, published, mailed or otherwise forwarded, distributed or
sent in, into or from any Restricted Jurisdictions. Persons
receiving such documents (including, without limitation, nominees,
trustees and custodians) should observe these restrictions. Failure
to do so may constitute a violation of the securities laws of any
such jurisdiction. To the fullest extent permitted by applicable
Law, the companies involved in the Acquisition disclaim any
responsibility or liability for the violations of any such
restrictions by any person.
Any response in relation to the Acquisition should be made only
on the basis of the information contained in the Scheme Documents
or any document by which the Acquisition and the Scheme are made.
Allergan Shareholders are advised to read carefully the formal
documentation in relation to the proposed Acquisition once the
Scheme Documents have been despatched.
This announcement has been prepared for the purpose of complying
with the laws of Ireland and the
Takeover Rules and the information disclosed may not be the same as
that which would have been disclosed if this announcement had been
prepared in accordance with the laws of jurisdictions outside of
Ireland.
APPENDIX I
SOURCES AND BASES OF INFORMATION
1. In this announcement, unless otherwise stated or the
context otherwise requires, the following bases and sources have
been used:
(a) The historical share
prices are sourced from the New York Stock Exchange for both AbbVie
and Allergan;
(b) The value of the whole of
the existing issued share capital of AbbVie is based upon the
entire issued ordinary share capital excluding treasury shares at
June, 21 2019, namely 1,478,365,231 AbbVie Shares;
(c) The value of the whole of
the existing issued share capital of Allergan is based upon the
entire issued ordinary share capital excluding treasury shares at
June, 21 2019, namely 327,823,649 Allergan Shares;
(d) References to the
arrangements in place between AbbVie and Allergan regarding an
expenses reimbursement agreement are sourced from the terms of the
Expenses Reimbursement Agreement approved by the Panel;
(e) The entire issued and to
be issued share capital (fully diluted share capital) of AbbVie is
calculated on the basis of:
(i) the number of issued
AbbVie Shares, as set out in paragraph (b) above; and
(ii) 10,591,251 in aggregate of
issued AbbVie Restricted Stock Units ("RSUs") and Performance Stock
Units ("PSUs"); and
(iii) 6,848,750 AbbVie Options;
and
(iv) all AbbVie Shares, RSUs
and Options maintain vesting status and remain outstanding;
(f) The entire issued and to be
issued share capital (fully diluted share capital) of Allergan is
calculated on the basis of:
(i) the number of issued Allergan
Shares, as set out in paragraph (c) above; and
(ii) 482,892 issued Allergan PSUs
(calculated by reference to the number of Allergan Shares the
Allergan PSUs are convertible into if target performance criteria
are met); and
(iii) 2,861,395 issued Allergan
RSU Awards; and
(iv) 6,342,839 Allergan Options;
and
(v) full exercise of the
outstanding options and vesting of outstanding Allergan RSU Awards
and Allergan PSU Awards at target performance levels.
(g) Save where otherwise stated,
financial and other information concerning AbbVie and Allergan has
been extracted from published sources or from audited financial
results of AbbVie and Allergan; and
(h) References to the arrangements
in place between AbbVie and Allergan regarding a transaction
agreement are sourced from the Transaction Agreement.
2. All references in this announcement:
(a) to 2019 revenue of the
combined company are based on revenue guidance for 2019 provided on
recent earnings calls; and
(b) any reference to 2020 revenues
are derived from an average of the following broker estimates:
(i) in relation to AbbVie and
Humira revenues: Societe Generale, Atlantic Equities, SVB Leerink,
Piper Jaffray, Wolfe Research,
Morgan Stanley, BMO, Cowen and Credit Suisse; and
(ii) in relation to Allergan: JP
Morgan, Credit Suisse, Guggenheim, RBC, Suntrust, Piper Jaffray, Wells Fargo, Citi, Leerink,
Cantor, Cowen, Morgan Stanley.
3. The statement that the Acquisition is earnings accretive
should not be interpreted to mean that the earnings per share in
the current or any future period financial period will necessarily
match or be greater than those for the relevant preceding financial
period.
4. As at the close of business on June 21, 2019 (being the last practicable date
prior to the release of this announcement), Morgan Stanley &
Co. LLC, financial adviser to AbbVie and any person (other than an
exempt principal trader or an exempt fund manager) controlling,
controlled by, or under the same control as, Morgan Stanley &
Co. LLC, was interested in, or held short positions in, the
following Allergan securities:
Entity
Name
|
Product
|
Quantity
|
Morgan Stanley
Strategic Investments, Inc.
|
Common
Stock
|
(2)*
|
Morgan Stanley AIP GP
LP
|
Common
Stock
|
1881
|
Morgan Stanley
Finance LLC
|
OPTION
|
14,700
|
Morgan Stanley
B.V.
|
OPTION
|
2,545
|
Morgan Stanley AIP GP
LP
|
Common
Stock
|
454
|
Morgan Stanley AIP GP
LP
|
Common
Stock
|
7,095
|
Morgan Stanley
Strategic Investments, Inc.
|
Common
Stock
|
(4)*
|
|
*Represents a short
position.
|
5. The bases of belief (including sources of information and
assumptions made) that support the expected synergies and other
cost reductions are set out in the following paragraphs. The
estimate of synergies has been reported on in accordance with Rule
19.3(b)(ii) of the Irish Takeover Rules.
6. The expected sources of the estimated pre-tax synergies
are:
(a) optimizing the research and
early stage portfolio, and reducing overlapping R&D
resources;
(b) driving efficiencies in
SG&A including sales and marketing, and central support
function costs; and
(c) eliminating redundancies
in manufacturing and supply chain, and leveraging procurement
spend.
7. When evaluating potential annual pre-tax cost synergies
and other cost reductions the AbbVie Board has assumed the
following:
(a) The cost bases for the
quantification exercise are:
(i) in respect of AbbVie, the four
months actual cost base to 30 April
2019 plus eight months of the latest forecast cost base to
31 December 2019; and
(ii) in respect of Allergan, the
three months actual cost base to 31 March
2019 plus nine months of the latest forecast cost base to
31 December 2019;
(b) that the Scheme will become
effective and AbbVie, through Acquirer Sub, will acquire 100% of
the issued and to be issued share capital of Allergan on completion
of the Acquisition;
(c) that there will be no material
unanticipated impact on the combined company arising from any
decisions made by competition authorities;
(d) that there will be no
material change to the market dynamics affecting AbbVie and/or
Allergan following completion of the Acquisition; and
(e) that there will be no
material change to exchange rates following completion of the
Acquisition.
8. In establishing the estimate of pre-tax synergies and
other cost reductions the AbbVie Board has assumed that Allergan's
operations, processes and procedures are comparable to those of
AbbVie's related operations, except where publicly available
information clearly indicates otherwise or the due diligence
materials provided by Allergan to AbbVie indicated otherwise.
9. AbbVie's management, aided by its previous integration
experience and through an understanding of Allergan's operations
and cost structure based on their own market intelligence and
experience, and due diligence materials provided by Allergan, has
determined the source and scale of potential pre-tax synergies and
other cost reductions. The pre-tax synergies and other cost
reductions are incremental to AbbVie's and, to the best of AbbVie's
knowledge, Allergan's existing plans.
10. In addition to information from AbbVie's and Allergan's
respective management teams, the sources of information that AbbVie
has used to arrive at the estimate of potential pre-tax synergies
and other cost reductions include:
(a) the Allergan annual
report and accounts;
(b) Allergan
presentations to analysts;
(c) Allergan's website;
(d) analysts' research;
(e) other public
information;
(f) AbbVie's knowledge of the
industry and of Allergan; and
(g) AbbVie's experience of
synergies from previous transactions.
11. There remains an inherent risk in the synergy
forward-looking statements. No synergy statement in this
announcement, including any statement that the Acquisition will be
accretive, should be construed as a profit forecast or interpreted
to mean that AbbVie's earnings in the first full year following the
Scheme, or in any subsequent period, would necessarily match or be
greater than or be less than those of AbbVie and/or Allergan for
the relevant preceding financial period or any other period.
APPENDIX II
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"AbbVie Board" means the board of directors of
AbbVie.
"AbbVie Directors" means the members of the AbbVie
Board.
"AbbVie Group" means AbbVie and all of its
subsidiaries.
"AbbVie Material Adverse Effect" has the meaning given to
it in Section 1.1 of the Transaction Agreement.
"AbbVie Options" means all options to purchase
AbbVie Shares, whether granted pursuant to the AbbVie Share Plan or
otherwise.
"AbbVie Parties" means, collectively, AbbVie and Acquirer
Sub.
"AbbVie Restricted Stock Units" / "RSUs" means the
restricted stock units of AbbVie.
"AbbVie Share Plan" means the AbbVie 2013 Stock Award and
Incentive Plan.
"AbbVie Shares" means the common stock of AbbVie, par
value $0.01 per share.
"AbbVie Shareholders" means the holders of Abbvie
Shares.
"AbbVie" means AbbVie Inc. a Delaware corporation
"Acquirer Sub" means Venice Subsidiary LLC, a
Delaware limited liability
company.
"Acquisition" means the proposed acquisition by Acquirer
Sub of Allergan by means of the Scheme or the Takeover Offer (and
any such Scheme or Takeover Offer as it may be revised, amended or
extended from time to time), including the issuance by AbbVie of
the aggregate Share Consideration and payment by Acquirer Sub of
the aggregate Cash Consideration pursuant to the Scheme or the
Takeover Offer, in each case, as described in this Rule 2.5
Announcement and provided for in the Transaction Agreement.
"Act" means the Companies Act 2014, all enactments which
are to be read as one with, or construed or read together as one
with the Act and every statutory modification and reenactment
thereof for the time being in force.
"Acting in Concert" shall have the meaning given to that
term in the Takeover Panel Act.
"Allergan" means Allergan an Irish public limited company
with registered number 527629 having its registered office at
Clonshaugh Business and Technology Park, Coolock, Dublin, D17 E400, Ireland.
"Allergan Alternative Proposal" means any bona
fide proposal or offer (including non-binding proposals or
offers) from any Person or Group, other than AbbVie and its
Subsidiaries or any of its Concert Parties, relating to any (i)
direct or indirect acquisition (whether in a single transaction or
a series of related transactions) of assets of Allergan or any of
its Subsidiaries (including equity securities of Subsidiaries)
equal to twenty percent (20%) or more of the consolidated assets of
Allergan, or to which twenty percent (20%) or more of the revenues
or earnings of Allergan on a consolidated basis are attributable
for the most recent fiscal year for which audited financial
statements are then available, (ii) direct or indirect acquisition
(including by scheme of arrangement or takeover offer) or issuance
(whether in a single transaction or a series of related
transactions) of twenty percent (20%) or more of any class of
equity or voting securities of Allergan, (iii) scheme of
arrangement, tender offer, takeover offer or exchange offer that,
if consummated, would result in a Person or Group beneficially
owning twenty percent (20%) or more of any class of equity or
voting securities of Allergan, or (iv) scheme of arrangement,
merger, consolidation, share exchange, business combination, joint
venture, reorganization, recapitalization or similar transaction
involving Allergan or any of its Subsidiaries, under which a Person
or Group or, in the case of clause (B) below, the shareholders or
equityholders of any Person or Group would, directly or indirectly,
(A) acquire assets equal to twenty percent (20%) or more of the
consolidated assets of Allergan, or to which 20% or more of the
revenues or earnings of Allergan on a consolidated basis are
attributable for the most recent fiscal year for which audited
financial statements are then available, or (B) immediately after
giving effect to such transactions, beneficially own twenty percent
(20%) or more of any class of equity or voting securities of
Allergan or the surviving or resulting Person (including any parent
Person) in such transaction.
"Allergan Board" means the board of directors of
Allergan.
"Allergan Change of Recommendation" shall have the
meaning given to that term in Section 5.3(a)(iii) of the
Transaction Agreement.
"Allergan Directors" means the members of the board of
directors of Allergan.
"Allergan Equity Award Holder Proposal" means the
proposal of AbbVie to the Allergan Equity Award Holders to be made
in accordance with Rule 15 of the Takeover Rules and the terms of
the Allergan Share Plans.
"Allergan Equity Awards" means the Allergan Options, the
Allergan Restricted Stock Awards, the Allergan RSU Awards, the
Allergan PSU Awards and any other Allergan equity-based awards
granted under a Allergan Share Plans or otherwise.
"Allergan Group" means Allergan and all of its
subsidiaries.
"Allergan Material Adverse Effect" has the meaning given
to it in Section 1.1 of the Transaction Agreement.
"Allergan Options" means all options to purchase Allergan
Shares, whether granted pursuant to the Allergan Share Plans or
otherwise.
"Allergan PSUs" means all Allergan RSU Awards with
performance-based vesting or delivery requirements, whether granted
pursuant to the Allergan Share Plans or otherwise.
"Allergan Replacement Option" an option granted under the
AbbVie Share Plan that will be substituted for each Allergan
Option.
"Allergan Replacement Share Award" an award granted under
the AbbVie Share Plan that will be substituted for each Allergan
Share Award.
"Allergan Restricted Stock Awards" means all awards of
Allergan Shares subject to vesting restrictions and/or forfeiture
back to Allergan, whether granted pursuant to the Allergan Share
Plans or otherwise.
"Allergan RSU Awards" means all restricted stock units
payable in Allergan Shares or whose value is determined with
reference to the value of Allergan Shares, whether granted pursuant
to the Allergan Share Plans or otherwise.
"Allergan Share" means the ordinary shares of Allergan,
par value US$0.0001 per share.
"Allergan Shareholders" means the holders of Allergan
Shares.
"Allergan Share Award" means an award denominated in
Allergan Shares (including Allergan Restricted Stock Awards,
Allergan PSU Awards and Allergan RSU Awards), other than an
Allergan Option.
"Allergan Share Plans" means, collectively, the Allergan,
Inc. 2008 Equity Plan, the Forest Laboratories, LLC 2007 Equity
Incentive Plan, the Amended and Restated Allergan 2011 Incentive
Award Plan, the Amended and Restated 2013 Incentive Award Plan of
Allergan, the Kythera Biopharmaceuticals, Inc. 2012 Equity
Incentive Plan, the Warner Chilcott Equity Incentive Plan, the
ZELTIQ Aesthetics, Inc. 2012 Stock Plan, and any other equity-based
incentive plan maintained by Allergan or assumed by Allergan in
connection with prior acquisitions.
"Allergan Shareholder Approval" means (i) the approval of
the Scheme by a majority in number of members of each class of
Allergan Shareholders (including as may be directed by the High
Court pursuant to Section 450(5) of the Act) representing, at
the relevant voting record time, at least seventy five percent
(75%) in value of the Allergan Shares of that class held by
Allergan Shareholders who are members of that class and that are
present and voting either in person or by proxy, at the Court
Meeting (or at any adjournment or postponement of such meeting) and
(ii) the Required EGM Resolutions being duly passed by the
requisite majorities of Allergan Shareholders at the EGM (or at any
adjournment or postponement of such meeting).
"Allergan Superior Proposal" means any bona fide,
written Allergan Alternative Proposal (other than an Allergan
Alternative Proposal which has resulted from a breach in any
material respect of Section 5.3 of the Transaction Agreement) (with
all references to "twenty percent (20%)" in the definition of
Allergan Alternative Proposal being deemed to be references to
"fifty percent (50%)") on terms that the Allergan Board determines
in good faith, after consultation with its financial advisor and
outside legal counsel, and taking into account all the terms and
conditions of the Allergan Alternative Proposal that the Allergan
Board considers to be appropriate (including the identity of the
Person making the Allergan Alternative Proposal and the expected
timing and likelihood of consummation, any governmental or other
approval requirements (including divestitures and entry into other
commitments and limitations), break-up fees, expense reimbursement
provisions, conditions to consummation and availability of
necessary financing), is more favorable to the Allergan
Shareholders from a financial point of view than the Acquisition
(taking into account any proposal by AbbVie to amend the terms of
the Transaction Agreement).
"Antitrust Laws" means the Sherman Act of 1890, the
Clayton Act of 1914, the Federal Trade Commission Act of 1914, the
HSR Act and all other federal, state and foreign applicable Laws in
effect from time to time that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade.
"Cash Consideration" means US$120.30 in cash per Allergan Share (as it may
be adjusted by the Exchange Ratio Modification Number) and any cash
in lieu of fractions.
"Clearances" means all consents, clearances, approvals,
permissions, license, variance, exemption, authorization,
acknowledgement, permits, nonactions, Orders and waivers to be
obtained from, and all registrations, applications, notices and
filings to be made with or provided to, any Governmental Entity or
other third party in connection with the implementation of the
Scheme and/or the Acquisition.
"Completion" means the completion of the Acquisition.
"Completion Date" means the date of completion of the
Acquisition.
"Concert Parties" means such Persons as are deemed to be
Acting in Concert with AbbVie pursuant to Rule 3.3 of Part A of the
Irish Takeover Rules.
"Conditions" means the conditions to the Scheme and the
Acquisition set out in paragraphs 1, 2, 3, 4 and 5 of Appendix III
of this Rule 2.5 Announcement, and "Condition" means any one
of the Conditions.
"Court Meeting" means the meeting or meetings of the
Allergan Shareholders or, if applicable, the meeting or meetings of
any class or classes of Allergan Shareholders (and, in each case,
any adjournment or postponement thereof) convened by (i) resolution
of the Allergan Board or (ii) order of the High Court, in either
case, pursuant to Section 450 of the Act to consider and, if
thought fit, approve the Scheme (with or without amendment).
"Court Meeting Resolution" means the resolution to be
proposed at the Court Meeting for the purposes of approving and
implementing the Scheme.
"Court Order" means the Order or Orders of the High Court
sanctioning the Scheme under Section 453 of the Act and confirming
the reduction of capital that forms part of it under Sections 84
and 85 of the Act.
"EC Merger Regulation" means Council Regulation (EC) No.
139/2004 of 20 January 2004 on the
control of concentrations between undertakings.
"Effective Date" means the date on which the Scheme
becomes effective in accordance with its terms or, if the
Acquisition is implemented by way of a Takeover Offer, the date on
which the Takeover Offer has become (or has been declared)
unconditional in all respects in accordance with the provisions of
the Takeover Offer Documents and the Takeover Rules.
"Effective Time" means the time on the Effective Date at
which the Court Order and a copy of the minute required by
Section 86 of the Act are registered by the Registrar of
Companies or, if the Acquisition is implemented by way of a
Takeover Offer, the time on the Effective Date at which the
Takeover Offer becomes (or is declared) unconditional in all
respects in accordance with the provisions of the Takeover Offer
Documents and the Takeover Rules.
"EGM" means the extraordinary general meeting of the
Allergan Shareholders (and any adjournment or postponement thereof)
to be convened in connection with the Scheme, expected to be held
as soon as the preceding Court Meeting shall have been concluded
(it being understood that if the Court Meeting is adjourned or
postponed, the EGM shall be correspondingly adjourned or
postponed).
"End Date" means June 25,
2020; provided, that if as of such date any
of Conditions 3(ii), 3(iii), 3(iv) or 3(y) (with
respect to Condition 3(v), only if the failure of such
Condition to have been satisfied as of such date is an Order or Law
under any Antitrust Law) have not been satisfied, and on such date
all other Conditions (other than Conditions 2(iii) and 2(iv)) have
been satisfied (or, in the sole discretion of the applicable
Party, waived (where applicable)) or would be satisfied (or, in the
sole discretion of the applicable Party, waived (where applicable))
if the Acquisition were completed on such date, the "End
Date" shall be September 25,
2020.
"Equity Award Conversion Ratio" means the sum, rounded to
the nearest one thousandth, of (a) the Exchange Ratio and (b) the
quotient obtained by dividing (i) the Cash Consideration by (ii)
the volume weighted average price of an AbbVie Share for a ten
trading day period, starting with the opening of trading on the
eleventh trading day prior to the Completion Date to the closing of
trading on the second to last trading day prior to the Completion
Date, as reported by Bloomberg.
"Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
"Exchange Ratio" means 0.8660 AbbVie Shares per
Allergan Share.
"Exchange Ratio Modification Number" means the provision
that, under the terms of the Transaction Agreement, if the
Acquisition would otherwise result in the issuance of AbbVie Shares
in excess of 19.99% of the AbbVie Shares outstanding immediately
prior to the Completion Date (the "Share Cap"), the Exchange
Ratio shall be reduced by the smallest number (rounded to the
nearest 0.0001) that causes the total number of AbbVie Shares
issuable in the Acquisition to not exceed the Share Cap (the
"Revised Exchange Ratio Number"), and the Cash Consideration
shall be increased by an amount in cash equal to (x) the Revised
Exchange Ratio Number multiplied by (y) the VWAP of the AbbVie
Shares.
"Expenses Reimbursement Agreement" means the expenses
reimbursement agreement dated June 25,
2019 between AbbVie and Allergan, the terms of which have
been approved by the Panel.
"Fractional Entitlements" means fractions of AbbVie
Shares.
"Governmental Entity" means any United States, Irish or other foreign or
supranational, federal, state or local governmental commission,
board, body, division, political subdivision, bureau or other
regulatory authority or agency, including courts and other judicial
bodies, or any competition, antitrust or supervisory body, central
bank, public international organization or other governmental,
trade or regulatory agency or body, securities exchange or any
self-regulatory body or authority, including any instrumentality or
entity designed to act for or on behalf of the foregoing, in each
case, in any jurisdiction, including, the Panel, the High Court,
the SEC, and each Allergan Regulatory Agency.
"HSR Act" means the United States Hart-Scott-Rodino
Antitrust Improvements Act of 1976.
"Independent Allergan Directors" means the Allergan
Directors, excluding Thomas C.
Freyman.
"Irish High Court" or "High Court" means the High
Court of Ireland.
"Irish Takeover Rules" or "Takeover Rules" means
the Irish Takeover Panel Act, 1997, Takeover Rules 2013.
"Law" means any federal, state, local, foreign or
supranational law, statute, ordinance, rule, regulation, judgment,
order, injunction, decree, executive order or agency requirement of
any Governmental Entity.
"Morgan Stanley" means Morgan Stanley & Co. LLC,
Morgan Stanley & Co. International plc and each of their
affiliates.
"NYSE" means the New York Stock Exchange.
"Order" means any order, writ, decree, judgment, award,
injunction, ruling, settlement or stipulation issued, promulgated,
made, rendered or entered into by or with any Governmental Entity
or arbitrator (in each case, whether temporary, preliminary or
permanent).
"Panel" or "Irish Takeover Panel" means the Irish
Takeover Panel.
"Parties" means Allergan and the AbbVie Parties and
"Party" shall mean either Allergan, on the one hand, or AbbVie or
the AbbVie Parties (whether individually or collectively), on the
other hand (as the context requires).
"Person" means any individual, corporation, partnership,
limited liability company, association, trust or other entity or
organization, including a government or political subdivision or an
agency or instrumentality of such government or political
subdivision.
"Proxy Statement" means a proxy statement to be sent to
the Allergan Shareholders in connection with the matters to be
submitted at the Court Meeting and the EGM.
"Registrar of Companies" or "Irish Registrar of
Companies" means the Registrar of Companies in Dublin, Ireland.
"Required Antitrust Jurisdiction" means U.S., European
Union, China, Brazil, Canada, Israel, Mexico, Japan, South
Africa, South Korea,
Turkey and the United Kingdom (only in the event of any exit
by the United Kingdom from, or
suspension or termination of its membership in, the European Union
such that a United Kingdom Governmental Entity has jurisdiction
under any Antitrust Law to review the transactions contemplated by
the Transaction Agreement).
"Required EGM Resolutions" mean, collectively, the
following resolutions to be proposed at the EGM: (i) an ordinary
resolution to approve the Scheme and to authorize the Allergan
Board to take all such action as it considers necessary or
appropriate to implement the Scheme; (ii) a special resolution to
cancel, subject to the approval of the High Court, the issued share
capital of Allergan (other than any Allergan Shares held by any
member of the AbbVie Group); (iii) an ordinary resolution
authorizing the Allergan Board to allot new ordinary shares to
Acquirer Sub pursuant to the Transaction Agreement and the Scheme
by capitalization of the reserve arising from the cancellation of
the issued share capital of Allergan pursuant to the resolution
described in clause (ii) and (iv) a special resolution amending the
Allergan memorandum and articles of association.
"Restricted Jurisdictions" means the jurisdictions in
which the release, publication or distribution of this announcement
may be restricted by the laws of those jurisdictions.
"Rule 2.5 Announcement" means this announcement issued
pursuant to Rule 2.5 of the Irish Takeover Rules.
"Sanction Date" means the date on which the Condition in
paragraph 2(iii) is satisfied.
"Scheme Consideration" means 0.8660 (as it may be
adjusted by the Exchange Ratio Modification Number) of an AbbVie
Share plus US$120.30 in cash
per Allergan Share (as it may be adjusted by the Exchange Ratio
Modification Number) and any cash in lieu of fractions.
"Scheme Document" means a document (or relevant sections
of the Proxy Statement comprising the Scheme Document) (including
any amendments or supplements thereto) to be distributed to
Allergan Shareholders and, for information only, to Allergan Equity
Award Holders containing (i) the Scheme, (ii) the notice or notices
of the Court Meeting and EGM, (iii) an explanatory statement as
required by Section 452 of the Act with respect to the Scheme,
(iv) such other information as may be required or necessary
pursuant to the Act, the Exchange Act or the Takeover Rules and (v)
such other information as Allergan and AbbVie shall agree.
"Scheme" means the proposed scheme of arrangement under
Chapter 1 of Part 9 of the Act and the capital reduction under
Sections 84 and 85 of the Act to effect the Acquisition
pursuant to the Transaction Agreement, on such terms and in such
form as is consistent with the terms agreed to by the Parties as
set out in this Rule 2.5 Announcement, including any revision
thereof as may be agreed between the Parties in writing, and, if
required, by the High Court.
"SEC" means the United States Securities and Exchange
Commission.
"Share Consideration" means 0.8660 (as it may be adjusted
pursuant to the Exchange Ratio Modification Number) of an AbbVie
Share.
"Takeover Offer" means an offer in accordance with
Section 3.6 of the Transaction Agreement for the entire issued
share capital of Allergan (other than any Allergan Shares
beneficially owned by AbbVie or any member of the AbbVie Group (if
any) and any Allergan Shares held by any member of the Allergan
Group) including any amendment or revision thereto pursuant to the
Transaction Agreement, the full terms of which would be set out in
the Takeover Offer Document or (as the case may be) any revised
offer documents.
"Takeover Offer Document" means, if, following the date
of the Transaction Agreement, AbbVie elects to implement the
Acquisition by way of the Takeover Offer in accordance with
Section 3.6 of the Transaction Agreement, the document to be
despatched to Allergan Shareholders and others jointly by AbbVie
and Acquirer Sub containing, among other things, the Takeover
Offer, the Conditions (except as AbbVie determines pursuant to and
in accordance with Section 3.6 of the Transaction Agreement
not to be appropriate in the case of a Takeover Offer) and certain
information about AbbVie, Acquirer Sub and Allergan and, where the
context so requires, includes any form of acceptance, election,
notice or other document reasonably required in connection with the
Takeover Offer.
"Takeover Panel Act" means the Irish Takeover Panel Act
1997.
"Takeover Rules" means the Irish Takeover Panel Act 1997,
Takeover Rules, 2013.
"Transaction Agreement" means the Transaction Agreement
dated June 25, 2019 by and among
AbbVie, Acquirer Sub and Allergan.
"VWAP of AbbVie Shares" means the volume weighted average
price of an AbbVie Share for a ten trading day period, starting
with the opening of trading on the eleventh trading day prior to
the Completion Date to the closing of trading on the second to last
trading day prior to the Completion Date, as reported by
Bloomberg.
References to "dollars" and "$" means U.S. dollars.
References to any applicable Law shall be deemed to refer to
such applicable Law as amended from time to time and to any rules
or regulations promulgated thereunder.
Any singular term shall be deemed to include the plural, and any
plural term the singular, and references to any gender shall
include all genders.
APPENDIX III
CONDITIONS OF THE ACQUISITION AND THE
SCHEME
The Acquisition and the Scheme will comply with the Takeover
Rules and, where relevant, the rules and regulations of the
Exchange Act, the Act and the NYSE, and are subject to the terms
and conditions set out in this Announcement and to be set out in
the Scheme Document. The Acquisition and the Scheme are, to
the extent required by the Laws of Ireland, governed by the Laws of Ireland.
The Acquisition and the Scheme will be subject to the conditions
set out in this Appendix III.
1. The Acquisition will be conditional upon the Scheme
becoming effective and unconditional by not later than the End Date
(or such earlier date as may be specified by the Panel, or such
later date as AbbVie and Allergan may, subject to receiving the
consent of the Panel and the High Court, in each case if required,
agree).
2. The Scheme will be conditional upon:
(i) the Scheme having been
approved by a majority in number of members of each class of
Allergan Shareholders (including as may be directed by the High
Court pursuant to Section 450(5) of the Act) present and voting
either in person or by proxy at the Court Meeting (or at any
adjournment or postponement of such meeting) representing, at the
Voting Record Time, at least 75% in value of the Allergan Shares of
that class held by such Allergan Shareholders present and
voting;
(ii) each of the Required EGM
Resolutions having been duly passed by the requisite majority of
Allergan Shareholders at the EGM (or at any adjournment or
postponement of such meeting);
(iii) the High Court having
sanctioned (without material modification) the Scheme pursuant to
Sections 449 to 455 of the Act and the High Court having confirmed
the related reduction of capital involved therein (the date on
which the condition in this paragraph 2(iii) is satisfied, the
"Sanction Date"); and
(iv) copies of the Court
Order and the minute required by Section 86 of the Act in respect
of the reduction of capital (referred to in paragraph 2(iii))
having been delivered for registration to the Registrar of
Companies and the Court Order and such minute having been
registered by the Registrar of Companies.
3. The AbbVie Parties and Allergan have agreed that,
subject to paragraph 6, the Scheme and the Acquisition will also be
conditional upon the following matters having been satisfied or
waived on or before the Sanction Date:
(i) the NYSE having approved,
and not withdrawn such approval, the listing of all of the Share
Consideration to be issued in the Acquisition, subject only to
official notice of issuance;
(ii) the applicable waiting
periods under the HSR Act in connection with the Acquisition having
expired or been earlier terminated, and, to the extent applicable,
any agreement between Allergan and the AbbVie Parties, on the one
hand, and the Federal Trade Commission or the Antitrust Division of
the United States Department of Justice, on the other hand, not to
consummate the Scheme or the Acquisition having expired or been
earlier terminated;
(iii)
(a) to the extent that the
Acquisition constitutes a concentration within the scope of Council
Regulation (EC) No. 139/2004 (the "EC Merger Regulation") or
otherwise constitutes a concentration that is subject to the EC
Merger Regulation, the European Commission having decided to allow
closing of the Acquisition;
(b) the extent that all or part of
the Acquisition is referred by the European Commission to the
relevant Governmental Entity of one or more member countries of the
European Economic Area, such relevant Governmental Entity(ies) (in
the case of a partial referral in conjunction with a final decision
of the European Commission) having issued a final decision or
decisions which satisfies (or together satisfy) Condition 3(iii)(a)
above (that clause being interpreted mutandis mutatis);
(iv) all required Clearances of
any Governmental Entity having been obtained and remaining in full
force and effect and all applicable waiting periods having expired,
lapsed or been terminated (as appropriate), in each case in
connection with the Acquisition, under the Antitrust Laws of each
Required Antitrust Jurisdiction;
(v) (a) no order, writ,
decree, judgment, or injunction (whether temporary or permanent)
shall have been issued, promulgated, made, rendered or entered into
by any court or other tribunal of competent jurisdiction, and (b)
no Law other than an order, writ, decree, judgment, or injunction
described in clause (a) (excluding, for purposes of this clause
(b), any such Antitrust Law of any jurisdiction that is not a
Required Antitrust Jurisdiction) in any jurisdiction of competent
authority, shall have been enacted, issued, promulgated, enforced
or entered and continue in effect and, in the case of each of
clauses (a) and (b), restrain, enjoin, make illegal or otherwise
prohibit the consummation of the Acquisition; and
(vi) the Transaction
Agreement not having been terminated in accordance with its terms
by the applicable Party or Parties as set forth below as a
consequence of an event set forth below (such events being the
events set out in the Transaction Agreement following the
occurrence of which the Transaction Agreement may be terminated in
accordance with its terms):
(a) termination by either Allergan
or AbbVie if the Court Meeting or the EGM shall have been completed
and the Court Meeting Resolution or the Required EGM Resolutions,
as applicable, shall not have been approved by the requisite
majorities;
(b) termination by either Allergan
or AbbVie if the Effective Time shall not have occurred by
5:00 p.m., New York City time, on the End Date, provided,
that such right to terminate the Transaction Agreement shall not be
available to a Party whose breach of any provision of the
Transaction Agreement shall have been the primary cause of the
failure of the Effective Time to have occurred by such time;
(c) termination by either Allergan
or AbbVie if the High Court shall decline or refuse to sanction the
Scheme, unless both Parties agree in writing that the decision of
the High Court shall be appealed (it being agreed that Allergan
shall make such an appeal if requested to do so in writing by
AbbVie and the counsel appointed by AbbVie and by Allergan agree
that doing so is a reasonable course of action);
(d) termination by either Allergan
or AbbVie if there shall be in effect any (x) Law other than an
order, writ, decree, judgment, or injunction described in clause
(y) (whether or not final or appealable) (excluding any such
Antitrust Law of any jurisdiction that is not a Required Antitrust
Jurisdiction) in any jurisdiction of competent authority or (y)
final and non-appealable order, writ, decree, judgment, or
injunction issued, promulgated, made, rendered or entered into by
any court or other tribunal of competent jurisdiction, that, in the
case of each of clauses (x) and (y), permanently restrains,
enjoins, makes illegal or otherwise prohibits the consummation of
the Acquisition; provided that such right to terminate the
Transaction Agreement shall not be available to any Party whose
breach of any provision of the Transaction Agreement shall have
been the primary cause of such Law, order, writ, decree, judgment,
or injunction;
(e) termination by Allergan if any
AbbVie Party shall have breached or failed to perform in any
material respect any of its covenants or other agreements contained
in the Transaction Agreement or if any of its representations or
warranties set forth in the Transaction Agreement are inaccurate,
which breach, failure to perform or inaccuracy (1) would result in
a failure of Condition 5(ii) or 5(iii) and (2) is not reasonably
capable of being cured by the End Date or, if curable, is not cured
by the earlier of (x) the End Date and (y) 30 days following
written notice by Allergan thereof;
(f) termination by Allergan prior
to obtaining the Allergan Shareholder Approval if (1) in accordance
with Section 5.3 of the Transaction Agreement, the Allergan Board
shall have authorized Allergan to terminate the Transaction
Agreement in response to an Allergan Superior Proposal and (2)
substantially concurrently with such termination, a definitive
agreement providing for the consummation of such Allergan Superior
Proposal is duly executed and delivered by all parties thereto and,
prior to or substantially concurrently with such termination,
Allergan pays AbbVie any amounts due under the Expenses
Reimbursement Agreement (it being understood that, without limiting
Allergan's obligations under the Expenses Reimbursement Agreement,
only such costs and expenses for which AbbVie shall have submitted
to Allergan in writing a request for such amounts and written
invoices or written documentation supporting such request prior to
such termination in accordance with the Expenses Reimbursement
Agreement shall be due substantially concurrently with such
termination);
(g) termination by AbbVie if
Allergan shall have breached or failed to perform in any material
respect any of its covenants or other agreements contained in the
Transaction Agreement or if any of its representations or
warranties set forth in the Transaction Agreement are inaccurate,
which breach, failure to perform or inaccuracy (1) would result in
a failure of Condition 4(ii) or 4(iii) and (2) is not reasonably
capable of being cured by the End Date or, if curable, is not cured
by the earlier of (x) the End Date and (y) 30 days following
written notice by AbbVie thereof;
(h) termination by AbbVie if,
prior to the receipt of the Allergan Shareholder Approval an
Allergan Change of Recommendation shall have occurred; or
(i) termination by mutual written
consent of Allergan and AbbVie.
4. The AbbVie Parties and Allergan have agreed that,
subject to paragraph 6, the AbbVie Parties' obligation to effect
the Scheme and the Acquisition will also be conditional upon the
following matters having been satisfied (or, to the extent
permitted by applicable Law, waived by AbbVie) on or before the
Sanction Date:
(i) from June 25, 2019 (being the date of this
Announcement) to the Sanction Date, there having not been any
event, change, effect, development or occurrence that has had, or
would reasonably be expected to have, individually or in the
aggregate, an Allergan Material Adverse Effect;
(ii) (a) the representation
and warranty of Allergan set forth in Section 6.1(A)(k)(ii)
(Absence of Certain Changes or Events) of the Transaction
Agreement having been true and correct in all respects at and as of
the date of the Transaction Agreement and at and as of the Sanction
Date as though made at and as of the Sanction Date, (b) each of the
representations and warranties of Allergan set forth in Sections
6.1(A)(c)(i) (Capitalization), 6.1(A)(d)(i) (Corporate
Authority Relative to the Agreement), 6.1(A)(s) (Required
Vote of Allergan Shareholders), 6.1(A)(v) (Opinion of
Financial Advisor), 6.1(A)(w) (Finders or Brokers) and
6.1(A)(y) (Takeover Statutes) of the Transaction Agreement
having been true and correct (read for the purpose of this
paragraph 4(ii)(b) without any qualification as to materiality or
Allergan Material Adverse Effect therein) in all material respects
at and as of the date of the Transaction Agreement and at and as of
the Sanction Date as though made at and as of the Sanction Date (in
each case except to the extent that any such representation and
warranty speaks as of a particular date, in which case such
representation and warranty shall have been true and correct in all
material respects as of such particular date), and (c) each of the
representations and warranties of Allergan set forth in Section
6.1(A) of the Transaction Agreement (other than those specifically
listed in paragraphs 4(ii)(a) or 4(ii)(b)) having been true and
correct (read for purposes of this paragraph 4(ii)(c) without any
qualification as to materiality or Allergan Material Adverse Effect
therein) in all respects at and as of the date of the Transaction
Agreement and at and as of the Sanction Date as though made at and
as of the Sanction Date (in each case except to the extent that any
such representation and warranty speaks as of a particular date, in
which case such representation and warranty shall have been true
and correct as of such particular date), except for such failures
to be true and correct as have not had and would not reasonably be
expected to have, individually or in the aggregate, an Allergan
Material Adverse Effect;
(iii) Allergan having
performed and complied, in all material respects, with all of the
covenants and agreements that the Transaction Agreement requires
Allergan to perform or comply with prior to the Sanction Date;
and
(iv) AbbVie having received a
certificate from an executive officer of Allergan confirming the
satisfaction of the conditions set forth in paragraphs 4(ii) and
4(iii).
5. The AbbVie Parties and Allergan have agreed that,
subject to paragraph 6, Allergan's obligation to effect the Scheme
and the Acquisition will also be conditional upon the following
matters having been satisfied (or, to the extent permitted by
applicable Law, waived by Allergan) on or before the Sanction
Date:
(i) from June 25, 2019 (being the date of this
Announcement) to the Sanction Date, there having not been any
event, change, effect, development or occurrence that has had, or
would reasonably be expected to have, individually or in the
aggregate, an AbbVie Material Adverse Effect;
(ii) (a) the representation and
warranty of AbbVie set forth in Section 6.2(A)(h) (Absence of
Certain Changes or Events) of the Transaction Agreement having
been true and correct in all respects at and as of the date of the
Transaction Agreement and at and as of the Sanction Date as though
made at and as of the Sanction Date, (b) each of the
representations and warranties of AbbVie set forth in Sections
6.2(A)(b)(i) (Capital Stock) and 6.2(A)(c)(i) (Corporate
Authority Relative to the Agreement) of the Transaction
Agreement having been true and correct in all material respects
(read for the purpose of this paragraph 5(ii)(b) without any
qualification as to materiality or AbbVie Material Adverse Effect
therein) at and as of the date of the Transaction Agreement and at
and as of the Sanction Date as though made at and as of the
Sanction Date (in each case except to the extent that any such
representation and warranty speaks as of a particular date, in
which case such representation and warranty shall have been true
and correct in all material respects as of such particular date),
and (c) each of the representations and warranties of AbbVie set
forth in Section 6.2(A) of the Transaction Agreement (other than
those specifically listed in paragraphs 5(ii)(a) or 5(ii)(b))
having been true and correct (read for purposes of this paragraph
5(ii)(c) without any qualification as to materiality or AbbVie
Material Adverse Effect therein) in all respects at and as of the
date of the Transaction Agreement and at and as of the Sanction
Date as though made at and as of the Sanction Date (in each case
except to the extent that any such representation and warranty
speaks as of a particular date, in which case such representation
and warranty shall have been true and correct in all respects as of
such particular date), except for such failures to be true and
correct as have not had and would not reasonably be expected to
have, individually or in the aggregate, an AbbVie Material Adverse
Effect;
(iii) the AbbVie Parties
having performed and complied, in all material respects, with all
of the covenants and agreements that the Transaction Agreement
requires either of the AbbVie Parties to perform or comply with
prior to the Sanction Date; and
(iv) Allergan having received
a certificate from an executive officer of AbbVie confirming the
satisfaction of the conditions set forth in paragraphs 5(ii) and
5(iii).
6. Subject to the
requirements of the Panel:
(i) AbbVie and Allergan
reserve the right (but neither Party shall be under any obligation)
to waive (to the extent permitted by applicable Law), in whole or
in part, all or any of the conditions in paragraph 3 (provided that
no such waiver shall be effective unless agreed to by both
Parties);
(ii) AbbVie reserves the
right (but shall be under no obligation) to waive (to the extent
permitted by applicable Law), in whole or in part, all or any of
the conditions in paragraph 4; and
(iii) Allergan reserves the
right (but shall be under no obligation) to waive (to the extent
permitted by applicable Law), in whole or in part, all or any of
the conditions in paragraph 5.
7. The Scheme will lapse unless it is effective on or prior
to the End Date (or such later date as AbbVie and Allergan may,
subject to receiving the consent of the Panel and the High Court,
in each case if required, agree).
8. If AbbVie is required to make an offer for Allergan Shares
under the provisions of Rule 9 of the Takeover Rules, AbbVie may
make such alterations to any of the Conditions set out in
paragraphs 1, 2, 3, 4 and 5 above as are necessary to comply with
the provisions of that rule.
9. AbbVie reserves the right, subject to the prior written
consent of the Panel, to effect the Acquisition by way of a
Takeover Offer in the circumstances described in and subject to the
terms of Section 3.6 of the Transaction Agreement. Without
limiting Section 3.6 of the Transaction Agreement, in the event the
Acquisition is structured as a Takeover Offer, such offer will be
implemented on terms and conditions that are at least as favorable
to the Allergan Shareholders and the holders of Allergan Options
and Allergan Share Awards as those which would apply in relation to
the Scheme (except for an acceptance condition set at 80% of the
nominal value of the Allergan Shares to which such an offer relates
(and which are not already in the beneficial ownership of
AbbVie)).
APPENDIX IV
Report of PricewaterhouseCoopers LLP pursuant
to Rule 19.3(b)(ii) of the Irish Takeover Rules
The Directors (the "Directors")
AbbVie Inc.
1 North Waukegan Road
North Chicago, IL 60064
United States
Morgan Stanley & Co International plc (the "Financial
Adviser")
25 Cabot Square
Canary Wharf
London
E14 4QA
U.K.
25 June 2019
Dear Ladies and Gentlemen
Merger Benefit Statement by AbbVie Inc. (the
"Company")
We report on the "Merger Benefit Statement" by the
Directors included in Section 7 of the Rule 2.5 Announcement dated
25 June 2019 (the
"Announcement") to the effect that:
"AbbVie anticipates that the Acquisition will provide annual
pre-tax synergies and other cost reductions of at least
$2 billion in year three while
leaving investments in key growth franchises untouched. The
synergies and other cost reductions will be a result of optimizing
the research and early stage portfolio, and reducing overlapping
R&D resources (~50%), driving efficiencies in SG&A,
including sales and marketing and central support function costs
(~40%), and eliminating redundancies in manufacturing and supply
chain, and leveraging procurement spend (~10%). The synergies
estimate excludes any potential revenue synergies."
The Merger Benefit Statement has been made in the context of
disclosure in Section 7 of the Announcement setting out the bases
of belief of the Directors supporting the Merger Benefit Statement
and their analysis and explanation of the underlying constituent
elements.
This report is required by Rule 19.3(b)(ii) of the Irish
Takeover Panel Act 1997, Takeover Rules, 2013 (the "Rules")
and is given for the purpose of complying with that rule and for no
other purpose.
Responsibilities
It is the responsibility of the Directors to make the Merger
Benefit Statement in accordance with the Code.
It is our responsibility and that of the Financial Adviser to
form our respective opinions as required by Rule 19.3(b)(ii) of the
Rules, as to whether the Merger Benefit Statement has been made
with due and careful consideration.
Save for any responsibility which we may have to those persons
to whom this report is expressly addressed and for any
responsibility arising under Rule 19.3(b)(ii) of the Rules to any
person as and to the extent therein provided, to the fullest extent
permitted by law we do not assume any responsibility and will not
accept any liability to any other person for any loss suffered by
any such other person as a result of, arising out of, or in
connection with this report or our statement, required by and given
solely for the purposes of complying with Rule 19.3(b)(ii) of the
Rules, consenting to its inclusion in the Announcement.
Basis of Opinion
We conducted our work in accordance with the Standards for
Investment Reporting issued by the Auditing Practices Board in the
United Kingdom and published by
the Institute of Chartered Accountants in Ireland. We have discussed the Merger Benefit
Statement together with the relevant bases of belief (including
sources of information and assumptions) with the Directors and with
the Financial Adviser. Our work did not involve any independent
examination of any of the financial or other information underlying
the Merger Benefit Statement.
Since the Merger Benefit Statement and the assumptions on which
it is based relate to the future and may therefore be affected by
unforeseen events, we can express no opinion as to whether the
actual Benefit achieved will correspond to those anticipated in the
Merger Benefit Statement and the differences may be material.
Our work has not been carried out in accordance with auditing or
other standards and practices generally accepted in the United States of America or other
jurisdictions and accordingly should not be relied upon as if it
had been carried out in accordance with those standards and
practices.
Opinion
In our opinion, on the basis of the foregoing, the Directors
have made the Merger Benefit Statement, in the form and context in
which it is made, with due care and consideration.
Yours sincerely
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP, 1 Embankment Place, London WC2N 6RH
T: +44 (0) 20 7583 5000, F: +44 (0) 20 7212 4652,
www.pwc.co.uk
PricewaterhouseCoopers LLP is a limited liability partnership
registered in England with
registered number OC303525. The registered office of
PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers
LLP is authorised and regulated by the Financial Conduct Authority
for designated investment business.
APPENDIX V
Report of Morgan Stanley & Co.
International plc pursuant to Rule 19.3(b)(ii) of the Irish
Takeover Rules
The Directors
AbbVie Inc
1 N. Waukegan Road North Chicago,
Illinois 60064
25 June 2019
Dear Sirs
Proposed acquisition of Allergan plc ("Allergan") by AbbVie
Inc. ("AbbVie")
We refer to the statements of estimated cost synergies, the
bases of preparation thereof and the notes thereto (together the
"Statements") made by AbbVie set out in this announcement
dated 25 June 2019, for which the
directors of AbbVie are solely responsible.
We have discussed the Statements (including the assumptions and
sources of information referred to therein) with the directors of
AbbVie and those officers and employees of AbbVie who have
developed the underlying plans.
The Statements are subject to uncertainty as described in this
document and our work did not involve any independent examination
of any of the financial or other information underlying the
Statements.
We have relied upon the accuracy and completeness of all the
financial and other information discussed or reviewed by us and we
have assumed such accuracy and completeness for the purposes of
rendering this letter. In giving the confirmation set out in this
letter, we have reviewed the work carried out by
PricewaterhouseCoopers LLP, and have discussed with them the
conclusions stated in their report dated 25
June 2019 addressed to yourselves and ourselves in this
matter.
We do not express any opinion as to the achievability of the
merger benefits identified by the directors of AbbVie in the
Statements.
This letter is provided solely to the directors of AbbVie in
connection with Rule 19.3(b)(ii) of the Irish Takeover Panel Act,
1997, Takeover Rules 2013 and for no other purpose. We accept no
responsibility to Allergan or its or AbbVie's shareholders or any
other person, other than the directors of AbbVie in respect of the
contents of, or any matter arising out of or in connection with,
this letter or the work undertaken in connection with this
letter.
On the basis of the foregoing, we consider that the Statements,
for which the directors of AbbVie are solely responsible, have been
made with due care and consideration in the form and context in
which they are made.
Yours faithfully
/s/ David Kitterick
Authorised Signatory
For and on behalf of
Morgan Stanley & Co. International plc
APPENDIX VI
The Transaction Agreement
This TRANSACTION AGREEMENT (this "Agreement"), dated as of
June 25, 2019 is by and among AbbVie,
a Delaware corporation ("AbbVie"),
Venice Subsidiary, LLC, a Delaware
limited liability company and a direct wholly owned Subsidiary of
AbbVie ("Acquirer Sub"), and Allergan plc, an Irish public limited
company with registered number 527629 having its registered office
at Clonshaugh Business and Technology Park, Coolock,
Dublin, D17 E400, Ireland ("Allergan").
WHEREAS, AbbVie has agreed to make a proposal to cause Acquirer
Sub to acquire Allergan on the terms set out in the Rule 2.5
Announcement;
WHEREAS, this Agreement sets out certain matters relating to the
conduct of the Acquisition (as defined below) that have been agreed
by the Parties; and
WHEREAS, the Parties intend that the Acquisition will be
implemented by way of the Scheme, although this may, subject to the
consent (where required) of the Panel, be switched to a Takeover
Offer in accordance with the terms set out in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements contained in
this Agreement, the Parties agree as follows:
ARTICLE 1
INTERPRETATION
Section 1.1 Definitions.
As used in this Agreement the following words and expressions
have the following meanings:
"AbbVie Board" means the board of directors of
AbbVie.
"AbbVie Group" means AbbVie and all of its
Subsidiaries.
"AbbVie Material Adverse Effect" means any event, change,
effect, development or occurrence that, individually or together
with any other event, change, effect, development or occurrence,
(a) would prevent, materially delay or materially impair the
ability of AbbVie and Acquirer Sub to consummate the transactions
contemplated hereby (including the Acquisition) prior to the End
Date or (b) has had or would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
properties, assets, liabilities, business, operations or results of
operations of AbbVie and its Subsidiaries, taken as a whole;
provided, that, solely for the purpose of clause (b), no
event, change, effect, development or occurrence to the extent
resulting from or arising out of any of the following shall be
deemed to constitute an AbbVie Material Adverse Effect or shall be
taken into account in determining whether there has been, or would
reasonably be expected to be, an AbbVie Material Adverse Effect:
(i) any changes in general United
States or global economic conditions, (ii) any changes in
conditions generally affecting the industries in which AbbVie or
any of its Subsidiaries operate, (iii) any decline, in and of
itself, in the market price or trading volume of AbbVie Shares (it
being understood and agreed that the facts, events, developments or
occurrences giving rise to or contributing to such decline that are
not otherwise excluded from the definition of AbbVie Material
Adverse Effect may, to the extent not otherwise excluded, be taken
into account in determining whether there has been, or would
reasonably be expected to be, an AbbVie Material Adverse Effect),
(iv) any changes in political conditions or in securities, credit,
financial, debt or other capital markets, in each case in
the United States or any foreign
jurisdiction, (v) any failure, in and of itself, by AbbVie or any
of its Subsidiaries to meet any internal or published projections,
forecasts, estimates or predictions, revenues, earnings or other
financial or operating metrics for any period (it being understood
and agreed that the facts, events, developments or occurrences
giving rise to or contributing to such failure that are not
otherwise excluded from the definition of AbbVie Material Adverse
Effect may, to the extent not otherwise excluded, be taken into
account in determining whether there has been, or would reasonably
be expected to be, an AbbVie Material Adverse Effect), (vi) the
execution and delivery of this Agreement, the public announcement
of this Agreement or the consummation of the transactions
contemplated hereby (including the Acquisition) (it being
understood and agreed that the foregoing shall not apply with
respect to any representation or warranty that is intended to
expressly address the consequences of the execution, delivery or
performance of this Agreement or the consummation of the
transactions contemplated hereby (including the Acquisition) or
Condition 5(ii) to the extent it relates to such representations
and warranties), (vii) any adoption, implementation, promulgation,
repeal, modification, amendment or change of any applicable Law of
or by any Governmental Entity, (viii) any changes or prospective
changes in GAAP, (ix) any changes in geopolitical conditions, the
outbreak or escalation of hostilities, any acts of war, sabotage,
cyberattack or terrorism, or any escalation or worsening of any
such acts of war, sabotage, cyberattack or terrorism threatened or
underway as of the date of this Agreement, (x) any epidemic,
plague, pandemic or other outbreak of illness or public health
event, hurricane, earthquake, flood or other natural disasters,
acts of God or any change resulting from weather conditions (xi)
any matter set forth in Section 6.2(h) of the AbbVie Disclosure
Schedule or (xii) any action taken by AbbVie or any of its
Subsidiaries that is expressly required to be taken by AbbVie or
any of its Subsidiaries pursuant to this Agreement or any action
expressly requiring Allergan's consent pursuant to this Agreement
which is not taken as a result of the failure of Allergan to
consent to such action following request for such consent by
AbbVie, except in the case of each of clauses (i), (ii), (iv),
(vii), (viii), (ix) or (x), to the extent that any such event,
change, effect, development or occurrence has a disproportionate
adverse effect on AbbVie and its Subsidiaries, taken as a whole,
relative to the adverse effect such event, change, effect,
development or occurrence has on other companies operating in the
industries in which AbbVie and its Subsidiaries operate.
"AbbVie Parties" means, collectively, AbbVie and Acquirer
Sub.
"AbbVie Preferred Shares" means the preferred stock of
AbbVie, par value $0.01 per
share.
"AbbVie Reimbursement Payment" shall have the meaning
given to that term in the Expenses Reimbursement Agreement.
"AbbVie Share Plan" means the AbbVie 2013 Stock Award and
Incentive Plan.
"AbbVie Shares" means the common stock of AbbVie, par
value $0.01 per share.
"Acquisition" means the proposed acquisition by Acquirer
Sub of Allergan by means of the Scheme or the Takeover Offer (and
any such Scheme or Takeover Offer as it may be revised, amended or
extended from time to time), including the issuance by AbbVie of
the aggregate Share Consideration and payment by Acquirer Sub of
the aggregate Cash Consideration pursuant to the Scheme or the
Takeover Offer, in each case, as described in the Rule 2.5
Announcement and provided for in this Agreement.
"Act" means the Companies Act 2014, all enactments which
are to be read as one with, or construed or read together as one
with the Act and every statutory modification and reenactment
thereof for the time being in force.
"Acting in Concert" shall have the meaning given to that
term in the Takeover Panel Act.
"Actions" means any civil, criminal or administrative
actions, litigations, arbitrations, suits, demands, claims,
hearings, notices of violation, investigations, proceedings, demand
letters, settlement or enforcement actions by, from or before any
Governmental Entity.
"Affiliate" means, in relation to any Person, any other
Person that, directly or indirectly, controls, is controlled by, or
is under common control with, such first person (as used in this
definition, "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of management or
policies of a Person, whether through the ownership of securities
or partnership or other ownership interests, by Contract or
otherwise and the terms "controlled" and
"controlling" shall have correlative meanings).
"Allergan Alternative Proposal" means any bona
fide proposal or offer (including non-binding proposals or
offers) from any Person or Group, other than AbbVie and its
Subsidiaries or any of its Concert Parties, relating to any (i)
direct or indirect acquisition (whether in a single transaction or
a series of related transactions) of assets of Allergan or any of
its Subsidiaries (including equity securities of Subsidiaries)
equal to twenty percent (20%) or more of the consolidated assets of
Allergan, or to which twenty percent (20%) or more of the revenues
or earnings of Allergan on a consolidated basis are attributable
for the most recent fiscal year for which audited financial
statements are then available, (ii) direct or indirect acquisition
(including by scheme of arrangement or takeover offer) or issuance
(whether in a single transaction or a series of related
transactions) of twenty percent (20%) or more of any class of
equity or voting securities of Allergan, (iii) scheme of
arrangement, tender offer, takeover offer or exchange offer that,
if consummated, would result in a Person or Group beneficially
owning twenty percent (20%) or more of any class of equity or
voting securities of Allergan, or (iv) scheme of arrangement,
merger, consolidation, share exchange, business combination, joint
venture, reorganization, recapitalization or similar transaction
involving Allergan or any of its Subsidiaries, under which a Person
or Group or, in the case of clause (B) below, the shareholders or
equityholders of any Person or Group would, directly or indirectly,
(A) acquire assets equal to twenty percent (20%) or more of the
consolidated assets of Allergan, or to which 20% or more of the
revenues or earnings of Allergan on a consolidated basis are
attributable for the most recent fiscal year for which audited
financial statements are then available, or (B) immediately after
giving effect to such transactions, beneficially own twenty percent
(20%) or more of any class of equity or voting securities of
Allergan or the surviving or resulting Person (including any parent
Person) in such transaction.
"Allergan Benefit Plan" means each employee welfare
benefit plan within the meaning of Section 3(1) of ERISA
(whether or not such plan is subject to ERISA), each employee
pension benefit plan within the meaning of Section 3(2) of
ERISA (whether or not such plan is subject to ERISA), and each
employment, consulting, compensation, salary contribution,
change-in-control, bonus, incentive, equity or equity-based,
phantom equity, deferred compensation, vacation, paid time off,
stock purchase, stock or stock-based, severance, termination pay or
indemnity, retention, employment, change of control or fringe
benefit or other material benefit or compensation plan, program,
policy, scheme, arrangement, or agreement, whether or not written,
that in each case, is sponsored, maintained or contributed to by
any member of the Allergan Group or to which any member of the
Allergan Group has or would reasonably be expected to have any
material liability (whether current or contingent), excluding any
arrangements maintained by any Governmental Entity or otherwise
required by applicable Law.
"Allergan Board" means the board of directors of
Allergan.
"Allergan Directors" means the members of the board of
directors of Allergan.
"Allergan Employees" means the employees of Allergan or
any Subsidiary of Allergan as of immediately prior to the Effective
Time.
"Allergan Equity Award Holder Proposal" means the
proposal of AbbVie to the Allergan Equity Award Holders to be made
in accordance with Rule 15 of the Takeover Rules and the terms of
the Allergan Share Plans.
"Allergan Equity Award Holders" means the holders of
Allergan Equity Awards.
"Allergan Equity Awards" means the Allergan Options, the
Allergan Restricted Stock Awards, the Allergan RSU Awards, the
Allergan PSU Awards and any other Allergan equity-based awards
granted under a Allergan Share Plan or otherwise.
"Allergan Group" means Allergan and all of its
Subsidiaries.
"Allergan Intellectual Property" means the Owned
Intellectual Property and the Licensed Intellectual Property.
"Allergan Intervening Event" means any material event,
fact, change, effect, development or occurrence arising or
occurring after the date of this Agreement that (i) was not known,
or the material consequences of which were not known, in each case
to the Allergan Board as of or prior to the date of this Agreement,
(ii) does not relate to or involve any Allergan Alternative
Proposal and (iii) does not relate to AbbVie or any of its
Subsidiaries.
"Allergan Material Adverse Effect" means any event,
change, effect, development or occurrence that, individually or
together with any other event, change, effect, development or
occurrence, (a) would prevent, materially delay or materially
impair the ability of Allergan to consummate the transactions
contemplated hereby (including the Acquisition) prior to the End
Date or (b) has had or would reasonably be expected to have a
material adverse effect on the condition (financial or otherwise),
properties, assets, liabilities, business, operations or results of
operations of Allergan and its Subsidiaries, taken as a whole;
provided that, solely for the purposes of clause (b), no
event, change, effect, development or occurrence to the extent
resulting from or arising out of any of the following shall be
deemed to constitute an Allergan Material Adverse Effect or shall
be taken into account in determining whether there has been, or
would reasonably be expected to be, an Allergan Material Adverse
Effect: (i) any changes in general United
States or global economic conditions, (ii) any changes in
conditions generally affecting the industries in which Allergan or
any of its Subsidiaries operate, (iii) any decline, in and of
itself, in the market price or trading volume of Allergan Shares
(it being understood and agreed that the facts, events,
developments or occurrences giving rise to or contributing to such
decline that are not otherwise excluded from the definition of
Allergan Material Adverse Effect may, to the extent not otherwise
excluded, be taken into account in determining whether there has
been, or would reasonably be expected to be, an Allergan Material
Adverse Effect), (iv) any changes in political conditions or in
securities, credit, financial, debt or other capital markets, in
each case in the United States or
any foreign jurisdiction, (v) any failure, in and of itself, by
Allergan or any of its Subsidiaries to meet any internal or
published projections, forecasts, estimates or predictions,
revenues, earnings or other financial or operating metrics for any
period (it being understood and agreed that the facts, events,
developments or occurrences giving rise to or contributing to such
failure that are not otherwise excluded from the definition of
Allergan Material Adverse Effect may, to the extent not otherwise
excluded, be taken into account in determining whether there has
been, or would reasonably be expected to be, an Allergan Material
Adverse Effect), (vi) the execution and delivery of this Agreement,
the public announcement of this Agreement or the consummation of
the transactions contemplated hereby (including the Acquisition)
(it being understood and agreed that the foregoing shall not apply
with respect to any representation or warranty that is intended to
expressly address the consequences of the execution, delivery or
performance of this Agreement or the consummation of the
transactions contemplated hereby (including the Acquisition) or
Condition 4(ii) to the extent it relates to such representations
and warranties), (vii) any adoption, implementation, promulgation,
repeal, modification, amendment or change of any applicable Law of
or by any Governmental Entity, (viii) any changes or prospective
changes in GAAP, (ix) any changes in geopolitical conditions, the
outbreak or escalation of hostilities, any acts of war, sabotage,
cyberattack or terrorism, or any escalation or worsening of any
such acts of war, sabotage, cyberattack or terrorism threatened or
underway as of the date of this Agreement, (x) any epidemic,
plague, pandemic or other outbreak of illness or public health
event, hurricane, earthquake, flood or other natural disasters,
acts of God or any change resulting from weather conditions, (xi)
any matter set forth in Section 6.1(a)(k)(ii) of the Allergan
Disclosure Schedule or (xii) any action taken by Allergan or any of
its Subsidiaries that is expressly required to be taken by Allergan
or any of its Subsidiaries pursuant to this Agreement or any action
expressly requiring AbbVie's consent pursuant to this Agreement
which is not taken as a result of the failure of AbbVie to consent
to such action following request for such consent by Allergan,
except in the case of each of clauses (i), (ii), (iv), (vii),
(viii), (ix) or (x), to the extent that any such event, change,
effect, development or occurrence has a disproportionate adverse
effect on Allergan and its Subsidiaries, taken as a whole, relative
to the adverse effect such event, change, effect, development or
occurrence has on other companies operating in the industries in
which Allergan and its Subsidiaries operate.
"Allergan Options" means all options to purchase Allergan
Shares, whether granted pursuant to the Allergan Share Plans or
otherwise.
"Allergan Preferred Shares" means the preferred stock of
Allergan, par value US $0.0001 per
share.
"Allergan Product" means all products or product
candidates that are being researched, tested, developed,
commercialized, manufactured, sold or distributed by any member of
the Allergan Group and all products or product candidates, if any,
with respect to which any member of the Allergan Group has royalty
rights.
"Allergan PSU Awards" means all Allergan RSU Awards with
performance-based vesting or delivery requirements, whether granted
pursuant to the Allergan Share Plans or otherwise.
"Allergan Regulatory Agency" means any Governmental
Entity that is concerned with the quality, identity, strength,
purity, safety, efficacy, testing, manufacturing, labeling,
storage, distribution, marketing, sale, pricing, import or export
of any of the Allergan Products.
"Allergan Regulatory Permits" means authorizations (i)
under the FDCA or the Public Health Service Act and (ii) of any
applicable Allergan Regulatory Agency necessary for the lawful
operation of the businesses of Allergan or any of its
Subsidiaries.
"Allergan Restricted Stock Awards" means all awards of
Allergan Shares subject to vesting restrictions and/or forfeiture
back to Allergan, whether granted pursuant to the Allergan Share
Plans or otherwise.
"Allergan RSU Awards" means all restricted stock units
payable in Allergan Shares or whose value is determined with
reference to the value of Allergan Shares, whether granted pursuant
to the Allergan Share Plans or otherwise.
"Allergan Share Award" means an award denominated in
Allergan Shares (including Allergan Restricted Stock Awards,
Allergan PSU Awards and Allergan RSU Awards), other than an
Allergan Option.
"Allergan Share Plans" means, collectively, the Allergan,
Inc. 2008 Equity Plan, the Forest Laboratories LLC 2007 Equity
Incentive Plan, the Amended and Restated 2011 Incentive Award Plan
of Allergan, the Amended and Restated 2013 Incentive Award Plan of
Allergan (the "Allergan 2013 Plan"), the Kythera
Biopharmaceuticals, Inc. 2012 Equity Incentive Plan, the Warner
Chilcott Equity Incentive Plan, the ZELTIQ Aesthetics, Inc. 2012
Stock Plan, and any other equity-based incentive plan maintained by
Allergan or assumed by Allergan in connection with prior
acquisitions.
"Allergan Shareholder Approval" means (i) the approval of
the Scheme by a majority in number of members of each class of
Allergan Shareholders (including as may be directed by the High
Court pursuant to Section 450(5) of the Act) representing, at
the relevant voting record time, at least seventy five percent
(75%) in value of the Allergan Shares of that class held by
Allergan Shareholders who are members of that class and that are
present and voting either in person or by proxy, at the Court
Meeting (or at any adjournment or postponement of such meeting) and
(ii) the Required EGM Resolutions being duly passed by the
requisite majorities of Allergan Shareholders at the EGM (or at any
adjournment or postponement of such meeting).
"Allergan Shareholders" means the holders of Allergan
Shares.
"Allergan Shares" means the ordinary shares of Allergan,
par value US$0.0001 per share.
"Allergan Superior Proposal" means any bona fide, written
Allergan Alternative Proposal (other than an Allergan Alternative
Proposal which has resulted from a breach in any material respect
of Section 5.3) (with all references to "twenty percent (20%)" in
the definition of Allergan Alternative Proposal being deemed to be
references to "fifty percent (50%)") on terms that the Allergan
Board determines in good faith, after consultation with its
financial advisor and outside legal counsel, and taking into
account all the terms and conditions of the Allergan Alternative
Proposal that the Allergan Board considers to be appropriate
(including the identity of the Person making the Allergan
Alternative Proposal and the expected timing and likelihood of
consummation, any governmental or other approval requirements
(including divestitures and entry into other commitments and
limitations), break-up fees, expense reimbursement provisions,
conditions to consummation and availability of necessary
financing), is more favorable to the Allergan Shareholders from a
financial point of view than the Acquisition (taking into account
any proposal by AbbVie to amend the terms of this Agreement).
"ANDA" means an abbreviated new drug application
submitted pursuant to 21 U.S.C. § 355(j).
"Antitrust Laws" means the Sherman Act of 1890, the
Clayton Act of 1914, the Federal Trade Commission Act of 1914, the
HSR Act and all other federal, state and foreign applicable Laws in
effect from time to time that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of
monopolization or restraint of trade.
"Bribery Act" means the United Kingdom Bribery Act
2010.
"Bribery Legislation" means all and any of the following:
the FCPA; the Organization For Economic Co-operation and
Development Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions and related
implementing legislation; the relevant Law in England and Wales relating to bribery and/or corruption,
including, the Public Bodies Corrupt Practices Act 1889; the
Prevention of Corruption Act 1906 as supplemented by the Prevention
of Corruption Act 1916 and the Anti-Terrorism, Crime and Security
Act 2001; the Bribery Act; the Proceeds of Crime Act 2002; the
relevant Laws in Ireland relating
to bribery and/or corruption including the Criminal Justice
(Corruption Offences) Act 2018 of Ireland; and any antiÂbribery or
anti-corruption related provisions in criminal and anti-competition
laws and /or anti-bribery, anti-corruption and/or antiÂmoney
laundering Laws of any jurisdiction in which the Allergan Group
operates.
"Bridge Credit Agreement" means that certain 364-Day
Bridge Credit Agreement, dated as of the date hereof, among AbbVie,
the lenders party thereto and Morgan Stanley Senior Funding, Inc.,
as administrative agent, an executed copy of which has been
provided to Allergan on the date hereof.
"Business Day" means any day, other than a Saturday,
Sunday or a day on which banks in Ireland or in New
York are authorized or required by applicable Law to be
closed.
"Cash Consideration" means US$120.30 in cash per Allergan Share, as it may
be adjusted pursuant to Section 8.1(c)(v).
"Clearances" means all consents, clearances, approvals,
permissions, license, variance, exemption, authorization,
acknowledgement, permits, nonactions, Orders and waivers to be
obtained from, and all registrations, applications, notices and
filings to be made with or provided to, any Governmental Entity or
other Third Party in connection with the implementation of the
Scheme and/or the Acquisition.
"Code" means the United States Internal Revenue Code of
1986.
"Completion" means the completion of the Acquisition.
"Concert Parties" means such Persons as are deemed to be
Acting in Concert with AbbVie pursuant to Rule 3.3 of Part A of the
Takeover Rules.
"Conditions" means the conditions to the Scheme and the
Acquisition set out in paragraphs 1, 2, 3, 4 and 5 of Appendix III
of the Rule 2.5 Announcement, and "Condition" means any one of the
Conditions.
"Confidentiality Agreement" means the confidentiality
agreement between Allergan and AbbVie dated as of May 30, 2019.
"Contract" means any legally binding contract, agreement,
obligation, understanding or instrument, lease, license or other
legally binding commitment or undertaking of any nature.
"Court Hearing" means the hearing by the High Court of
the Petition to sanction the Scheme under Section 453 of the
Act.
"Court Meeting" means the meeting or meetings of the
Allergan Shareholders or, if applicable, the meeting or meetings of
any class or classes of Allergan Shareholders (and, in each case,
any adjournment or postponement thereof) convened by (i) resolution
of the Allergan Board or (ii) order of the High Court, in either
case, pursuant to Section 450 of the Act to consider and, if
thought fit, approve the Scheme (with or without amendment).
"Court Meeting Resolution" means the resolution to be
proposed at the Court Meeting for the purposes of approving and
implementing the Scheme.
"Court Order" means the Order or Orders of the High Court
sanctioning the Scheme under Section 453 of the Act and
confirming the reduction of capital that forms part of it under
Sections 84 and 85 of the Act.
"EC Merger Regulation" means the Council Regulation (EC)
No 139/2004 of 20 January 2004 on the
control of concentrations between undertakings.
"Effective Date" means the date on which the Scheme
becomes effective in accordance with its terms or, if the
Acquisition is implemented by way of a Takeover Offer, the date on
which the Takeover Offer has become (or has been declared)
unconditional in all respects in accordance with the provisions of
the Takeover Offer Documents and the Takeover Rules.
"Effective Time" means the time on the Effective Date at
which the Court Order and a copy of the minute required by
Section 86 of the Act are registered by the Registrar of
Companies or, if the Acquisition is implemented by way of a
Takeover Offer, the time on the Effective Date at which the
Takeover Offer becomes (or is declared) unconditional in all
respects in accordance with the provisions of the Takeover Offer
Documents and the Takeover Rules.
"EGM" means the extraordinary general meeting of the
Allergan Shareholders (and any adjournment or postponement thereof)
to be convened in connection with the Scheme, expected to be held
as soon as the preceding Court Meeting shall have been concluded
(it being understood that if the Court Meeting is adjourned or
postponed, the EGM shall be correspondingly adjourned or
postponed).
"EGM Resolutions" means, collectively, the following
resolutions to be proposed at the EGM: (i) an ordinary resolution
to approve the Scheme and to authorize the Allergan Board to take
all such action as it considers necessary or appropriate to
implement the Scheme; (ii) a special resolution to cancel, subject
to the approval of the High Court, the issued share capital of
Allergan (other than any Allergan Shares held by any member of the
AbbVie Group); (iii) an ordinary resolution authorizing the
Allergan Board to allot new ordinary shares to Acquirer Sub
pursuant to this Agreement and the Scheme by capitalization of the
reserve arising from the cancellation of the issued share capital
of Allergan pursuant to the resolution described in clause (ii);
(iv) a special resolution amending the Allergan Memorandum and
Articles of Association in accordance with Section 4.5 of this
Agreement (the resolutions described in the foregoing clauses (i)
through (iv), the "Required EGM Resolutions"); (v) an
ordinary resolution that any motion by the Chairperson of the
Allergan Board to adjourn or postpone the EGM, or any adjournments
or postponements thereof, to another time and place if necessary or
appropriate to solicit additional proxies if there are insufficient
votes at the time of the EGM to approve the Scheme or any of the
Required EGM Resolutions to be approved; and (vi) any other
resolutions as Allergan reasonably determines to be necessary or
desirable for the purposes of implementing the Acquisition as have
been approved by AbbVie (such approval not to be unreasonably
withheld, conditioned or delayed).
"End Date" means June 25,
2020; provided, that if as of such date any of Conditions
3(ii), 3(iii), 3(iv) or 3(v) (with respect to Condition 3(v), only
if the failure of such Condition to have been satisfied as of such
date is an Order or Law under any Antitrust Law) have not been
satisfied, and on such date all other Conditions (other than
Conditions 2(iii) and 2(iv)) have been satisfied (or, in the
sole discretion of the applicable Party, waived (where applicable))
or would be satisfied (or, in the sole discretion of the applicable
Party, waived (where applicable)) if the Acquisition were completed
on such date, the "End Date" shall be September 25, 2020.
"Environmental Law" means each applicable Law relating to
(i) the protection, preservation or restoration of the environment
(including air, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other
natural resource), or (ii) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of, Hazardous
Substances.
"Environmental Permits" means all consents, clearances,
approvals, permissions, licenses, variances, exemptions,
authorizations, acknowledgements, approvals, permits and orders of
Governmental Entities required by Environmental Law and affecting,
or relating to, the business of Allergan or any of its
Subsidiaries.
"Equity Award Conversion Ratio" means the sum, rounded to
the nearest one thousandth, of (a) the Exchange Ratio and (b) the
quotient obtained by dividing (i) the Cash Consideration by (ii)
the VWAP of AbbVie Shares.
"Equity Securities" means, with respect to any Person,
(i) any shares of capital or capital stock (including any ordinary
shares) or other voting securities of, or other ownership interest
in, such Person, (ii) any securities of such Person convertible
into or exchangeable for cash or shares of capital or capital stock
or other voting securities of, or other ownership interests in,
such Person or any of its Subsidiaries, (iii) any warrants, calls,
options or other rights to acquire from such Person, or other
obligations of such Person to issue, any shares of capital or
capital stock or other voting securities of, or other ownership
interests in, or securities convertible into or exchangeable for
shares of capital or capital stock or other voting securities of,
or other ownership interests in, such Person or any of its
Subsidiaries, or (iv) any restricted shares, stock appreciation
rights, restricted units, performance units, contingent value
rights, "phantom" stock or similar securities or rights issued by
or with the approval of such Person that are derivative of, or
provide economic benefits based, directly or indirectly, on the
value or price of, any shares of capital or capital stock or other
voting securities of, other ownership interests in, or any
business, products or assets of, such Person or any of its
Subsidiaries.
"ERISA" means the United States Employee Retirement
Income Security Act of 1974.
"ERISA Affiliate" means any Person that, together with
any member of the Allergan Group, is (or at any relevant time has
or would be) treated as a single employer under Section 414 of
the Code.
"Exchange Act" means the United States Securities
Exchange Act of 1934.
"Exchange Agent" means the bank or trust company
appointed by AbbVie (and reasonably acceptable to Allergan) to act
as exchange agent for the payment of the Scheme Consideration.
"Expenses Reimbursement Agreement" means the expenses
reimbursement agreement dated as of the date hereof between AbbVie
and Allergan, the terms of which have been approved by the
Panel.
"FCPA" means the United States Foreign Corrupt Practices
Act of 1977.
"FDA" means the United States Food and Drug
Administration.
"FDCA" means the United States Food, Drug and Cosmetic
Act of 1938.
"Filing" means any registration, petition, statement,
application, schedule, form, declaration, notice, notification,
report, submission or other filing.
"Financing" means the debt financing provided by the
Bridge Credit Agreement and any other third party debt financing
that is necessary, or that is otherwise incurred or intended to be
incurred by AbbVie or any of the Subsidiaries of AbbVie, to
refinance or refund any existing indebtedness for borrowed money of
Allergan, AbbVie or any of their respective Subsidiaries in each
case in connection with the transactions contemplated hereby, or to
fund the Cash Consideration payable by Acquirer Sub in the Scheme
or (as the case may be) the Takeover Offer, including the offering
or private placement of debt securities or the incurrence of credit
facilities.
"Financing Sources" means (i) the Persons that have
committed to provide or arrange or otherwise entered into
agreements in connection with the Financing, including the parties
to any joinder agreements, engagement letters, indentures or credit
agreements entered into pursuant thereto or relating thereto, but
excluding in each case, for clarity, the Parties and their
Subsidiaries, (ii) the Affiliates of the Persons set forth in
clause (i) above and (iii) the Representatives and the respective
successors and assigns of the Persons set forth in clauses (i) and
(ii) above.
"GAAP" means U.S. generally accepted accounting
principles.
"Government Official" means (i) any official, officer,
employee, or representative of, or any Person acting in an official
capacity for or on behalf of, any Governmental Entity, (ii) any
political party, party official or candidate for political office
or (iii) any company, business, enterprise or other entity owned or
controlled by any Person described in the foregoing clause (i) or
(ii) of this definition.
"Governmental Entity" means any United States, Irish or other foreign or
supranational, federal, state or local governmental commission,
board, body, division, political subdivision, bureau or other
regulatory authority or agency, including courts and other judicial
bodies, or any competition, antitrust or supervisory body, central
bank, public international organization or other governmental,
trade or regulatory agency or body, securities exchange or any
self-regulatory body or authority, including any instrumentality or
entity designed to act for or on behalf of the foregoing, in each
case, in any jurisdiction, including, the Panel, the High Court,
the SEC, and each Allergan Regulatory Agency.
"Governmental Healthcare Program" means any federal
healthcare program as defined in 42 U.S.C. § 1320a-7b(f), including
Medicare, Medicaid, TRICARE, CHAMPVA, and state healthcare programs
(as defined therein), and any other healthcare program administered
by a Governmental Entity.
"Group" means a "group" as defined in Section 13(d)
of the Exchange Act.
"Hazardous Substance" means any substance, material or
waste that is listed, defined, designated or classified as
hazardous, toxic, radioactive, dangerous or a "pollutant" or
"contaminant" or words of similar meaning under any Environmental
Law or that is otherwise regulated by any Governmental Entity with
jurisdiction over the environment or natural resources, including
petroleum or any derivative or byproduct thereof, radon,
radioactive material, asbestos or asbestos-containing material,
urea formaldehyde, foam insulation or polychlorinated
biphenyls.
"Healthcare Laws" means all Laws relating to healthcare,
including: Title XVIII of the Social Security Act, 42 U.S.C. §§
1395-1395lll (the Medicare statute); Title XIX of the Social
Security Act, 42 U.S.C. §§ 1396-1396w-5 (the Medicaid statute); the
Federal Health Care Program Anti-Kickback Statute, 42 U.S.C. §
1320a-7b(b); the False Claims Act, 31 U.S.C. §§ 3729-3733; the
Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; the
Anti-Kickback Act of 1986, 41 U.S.C. §§ 51-58; the Civil Monetary
Penalties Law, 42 U.S.C. §§ 1320a-7a and 1320a-7b; the Exclusion
Laws, 42 U.S.C. § 1320a 7; the Health Insurance Portability and
Accountability Act of 1996, as amended by the Health Information
Technology for Economic and Clinical Health Act (Title XIII of the
American Recovery and Reinvestment Act of 2009); any similar
international, federal, state and local Laws that address the
subject matter of the foregoing; and the Patient Protection and
Affordable Care Act of 2010.
"High Court" means the High Court of Ireland.
"HSR Act" means the United States Hart-Scott-Rodino
Antitrust Improvements Act of 1976.
"Indentures" means, collectively, those certain
indentures (i) dated as of August 24,
2009, relating to the 3.250% Senior Notes due 2022 and
4.625% Senior Notes due 2042 issued by Allergan Finance, LLC; (ii)
dated as of September 14, 2010,
relating to the 3.375% Senior Notes due 2020 issued by Allergan,
Inc.; (iii) dated as of March 12,
2013, relating to the 2.800% Senior Notes due 2023 issued by
Allergan, Inc.; (iv) dated as of December
10, 2013, relating to the 5.000% Senior Notes due 2021
issued by Allergan Sales, LLC; (v) dated as of January 31, 2014, relating to the 4.875% Senior
Notes due 2021 issued by Allergan Sales, LLC; (vi) dated as of
June 19, 2014, relating to the 3.850%
Senior Notes due 2024 and 4.850% Senior Notes due 2044 issued by
Allergan Funding SCS; and (vii) dated as of March 12, 2015, relating to the USD-denominated
Floating Rate Senior Notes due 2020, Euro-denominated Floating Rate
Senior Notes due 2020, 3.000% Senior Notes due 2020, 0.500% Senior
Notes due 2021, 3.450% Senior Notes due 2022, 1.500% Senior Notes
due 2023, 1.250% Senior Notes due 2024, 3.800% Senior Notes due
2025, 2.625% Senior Notes due 2028, 2.125% Senior Notes due 2029,
4.550% Senior Notes due 2035 and 4.750% Senior Notes due 2045
issued by Allergan Funding SCS.
"Intellectual Property" means any and all rights in or
associated with any of the following, whether or not registered,
including all rights therein and associated therewith, arising in
the United States or any other
jurisdiction throughout the world: (i) trademarks, service marks,
trade names, trade dress, logos, slogans, Internet domain names,
Internet account names (including social networking and media
names) and other indicia of origin, together with all goodwill
associated therewith or symbolized thereby, and all registrations
and applications relating to the foregoing; (ii) patents and
pending patent applications, and all divisions, continuations,
continuations-in-part, reissues and reexaminations, and any
extensions thereof; (iii) works of authorship (whether or not
copyrightable), registered and unregistered copyrights (including
those in Software), all registrations and applications to register
the same, and all renewals, extensions, reversions and restorations
thereof, including moral rights of authors, and database rights;
(iv) trade secrets, rights in technology, confidential or
proprietary information and other know-how, including inventions
(whether or not patentable or reduced to practice), concepts,
methods, processes, protocols, assays, formulations, formulae,
technical, research, clinical and other data, databases, designs,
specifications, schematics, drawings, algorithms, models and
methodologies; (v) rights in Software; and (vi) other similar types
of proprietary rights or other intellectual property.
"Ireland" or
"Republic of Ireland" means
Ireland, excluding Northern Ireland, and the word "Irish"
shall be construed accordingly.
"IT Assets" means any and all computers, Software,
firmware, middleware, servers, workstations, routers, hubs,
switches, data communications lines and other information
technology equipment, and all associated documentation, owned by,
or licensed or leased to, Allergan or any of its Subsidiaries.
"knowledge" means in
relation to Allergan, the actual knowledge, after due inquiry, of
the Persons listed in Section 1.1(a) of the Allergan
Disclosure Schedule, and in relation to AbbVie, the actual
knowledge, after due inquiry, of the Persons listed in
Section 1.1(a) of the AbbVie Disclosure Schedule. None
of the individuals set forth in Section 1.1(a) of the Allergan
Disclosure Schedule or Section 1.1(a) of the AbbVie Disclosure
Schedule shall have any personal liability or obligations regarding
such knowledge.
"Law" means any federal, state, local, foreign or
supranational law, statute, ordinance, rule, regulation, judgment,
order, injunction, decree, executive order or agency requirement of
any Governmental Entity.
"Licensed Intellectual Property" means any and all
Intellectual Property owned by a Third Party and licensed
(including sublicensed) to any member of the Allergan Group.
"Lien" means, with respect to any property or asset, any
mortgage, lien, license, pledge, charge, security interest or
encumbrance of any kind in respect of such property or asset
(including in each case any license to, or covenant not to sue in
respect of, Intellectual Property).
"Northern Ireland" means
the counties of Antrim, Armagh, Derry, Down, Fermanagh and Tyrone
on the island of Ireland.
"NYSE" means the New York Stock Exchange.
"Order" means any order, writ, decree, judgment, award,
injunction, ruling, settlement or stipulation issued, promulgated,
made, rendered or entered into by or with any Governmental Entity
or arbitrator (in each case, whether temporary, preliminary or
permanent).
"Organizational Documents" means articles of association,
articles of incorporation, certificate of incorporation,
constitution, by-laws, limited liability company agreement,
operating agreement or other equivalent organizational document, as
appropriate.
"Owned Intellectual Property" means any and all
Intellectual Property owned or purported to be owned by any member
of the Allergan Group.
"Panel" means the Irish Takeover Panel.
"Parties" means Allergan and the AbbVie Parties and
"Party" shall mean either Allergan, on the one hand, or AbbVie or
the AbbVie Parties (whether individually or collectively), on the
other hand (as the context requires).
"Permitted Lien" means (i) any Liens for Taxes
(A) not yet due and payable or (B) which are being
contested in good faith by appropriate proceedings and with respect
to which adequate reserves have been established in accordance with
GAAP, (ii) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other similar Liens, (iii) pledges or deposits in
connection with workers' compensation, unemployment insurance and
other social security legislation, (iv) gaps in the chain of title
evident from the records of the applicable Governmental Entity
maintaining such records, easements, rights-of-way, covenants,
restrictions and other encumbrances of record as of the date of
this Agreement, (v) easements, rights-of-way, covenants,
restrictions and other encumbrances incurred in the ordinary course
of business that do not materially detract from the value or the
use of the property subject thereto, (vi) statutory landlords'
liens and liens granted to landlords under any lease, (vii) any
purchase money security interests, equipment leases or similar
financing arrangements, (viii) any Liens which are disclosed on the
Allergan Balance Sheet, or the notes thereto, or (ix) any Liens
that are not material to Allergan and its Subsidiaries, taken as a
whole.
"Person" means any individual, corporation, partnership,
limited liability company, association, trust or other entity or
organization, including a government or political subdivision or an
agency or instrumentality of such government or political
subdivision.
"Petition" means the petition to the High Court seeking
the Court Order.
"Registrar of Companies" means the Registrar of Companies
in Dublin, Ireland.
"Regulatory Information Service" means a regulatory
information service as defined in the Takeover Rules.
"Representatives" means, in relation to any Person, the
directors, officers, employees, agents, investment bankers,
financial advisors, legal advisors, accountants, brokers, finders,
consultants or other representatives of such Person.
"Resolutions" means the EGM Resolutions and the Court
Meeting Resolution, which will be set out in the Scheme
Document.
"Rule 2.5 Announcement" means the announcement to be made
by the Parties pursuant to Rule 2.5 of the Takeover Rules for the
purposes of the Acquisition, in the form agreed to by on or on
behalf of the Parties.
"Sanctioned Country" means any of Crimea, Cuba, Iran,
North Korea, Sudan, and Syria.
"Sanctioned Person" means any Person with whom dealings
are restricted or prohibited under any Sanctions Laws, including
the Sanctions Laws of the United
States, the United Kingdom,
the European Union or the United Nations, including (i) any Person
identified in any list of Sanctioned Persons maintained by (A) the
United States Department of Treasury, Office of Foreign Assets
Control, the United States Department of Commerce, Bureau of
Industry and Security or the United States Department of State, (B)
Her Majesty's Treasury of the United
Kingdom, (C) any committee of the United Nations Security
Council, or (D) the European Union, (ii) any Person located,
organized, or resident in, organized in, or a Governmental Entity
of, any Sanctioned Country and (iii) any Person which is directly
or indirectly fifty percent (50%) or more owned or controlled by,
or acting for the benefit or on behalf of, a Person described in
clause (i) or (ii).
"Sanctions Laws" means all applicable Laws concerning
economic sanctions, including embargoes, export restrictions, the
ability to make or receive international payments, the freezing or
blocking of assets of targeted Persons, the ability to engage in
transactions with specified Persons or countries or the ability to
take an ownership interest in assets of specified Persons or
located in a specified country, including any applicable Laws
threatening to impose economic sanctions on any person for engaging
in proscribed behavior.
"Scheme" means the proposed scheme of arrangement under
Chapter 1 of Part 9 of the Act and the capital reduction under
Sections 84 and 85 of the Act to effect the Acquisition
pursuant to this Agreement, on such terms and in such form as is
consistent with the terms agreed to by the Parties as set out in
the Rule 2.5 Announcement, including any revision thereof as may be
agreed between the Parties in writing, and, if required, by the
High Court.
"Scheme Document" means a document (or relevant sections
of the Proxy Statement comprising the Scheme Document) (including
any amendments or supplements thereto) to be distributed to
Allergan Shareholders and, for information only, to Allergan Equity
Award Holders containing (i) the Scheme, (ii) the notice or notices
of the Court Meeting and EGM, (iii) an explanatory statement as
required by Section 452 of the Act with respect to the Scheme,
(iv) such other information as may be required or necessary
pursuant to the Act, the Exchange Act or the Takeover Rules and (v)
such other information as Allergan and AbbVie shall agree.
"Scheme Recommendation" means the recommendation of the
Allergan Board that Allergan Shareholders vote in favor of the
Resolutions.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the United States Securities Act
of 1933.
"Significant Subsidiary" means a significant subsidiary
as defined in Rule l-02(w) of Regulation S-X of the Securities
Act.
"Software" means all (i) computer programs and other
software including any and all software implementations of
algorithms, models, methodologies, assemblers, applets, compilers,
development tools, design tools and user interfaces, whether in
source code or object code form, (ii) databases and compilations,
including all data and collections of data, whether machine
readable or otherwise, and (iii) updates, upgrades, modifications,
improvements, enhancements, derivative works, new versions, new
releases and corrections to or based on any of the foregoing.
"Subsidiary" means, with respect to any Person, any
entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors
or other persons performing similar functions are directly or
indirectly owned by such Person. For purposes of this
Agreement, a Subsidiary shall be considered a "wholly owned
Subsidiary" of a Person if such Person directly or indirectly owns
all of the securities or other ownership interests (excluding any
securities or other ownership interests held by an individual
director or officer required to hold such securities or other
ownership interests pursuant to applicable Law) of such
Subsidiary.
"Takeover Offer" means an offer in accordance with
Section 3.6 for the entire issued share capital of Allergan
(other than any Allergan Shares beneficially owned by AbbVie or any
member of the AbbVie Group (if any) and any Allergan Shares held by
any member of the Allergan Group) including any amendment or
revision thereto pursuant to this Agreement, the full terms of
which would be set out in the Takeover Offer Document or (as the
case may be) any revised offer documents.
"Takeover Offer Document" means, if, following the date
of this Agreement, AbbVie elects to implement the Acquisition by
way of the Takeover Offer in accordance with Section 3.6, the
document to be despatched to Allergan Shareholders and others
jointly by AbbVie and Acquirer Sub containing, among other things,
the Takeover Offer, the Conditions (except as AbbVie determines
pursuant to and in accordance with Section 3.6 not to be
appropriate in the case of a Takeover Offer) and certain
information about AbbVie, Acquirer Sub and Allergan and, where the
context so requires, includes any form of acceptance, election,
notice or other document reasonably required in connection with the
Takeover Offer.
"Takeover Panel Act" means the Irish Takeover Panel Act
1997.
"Takeover Rules" means the Irish Takeover Panel Act 1997,
Takeover Rules, 2013.
"Third Party" means any Person or Group, other than
Allergan or any of its Affiliates, in the case of AbbVie and
Acquirer Sub, or other than AbbVie or any of its Affiliates, in the
case of Allergan, and the Representatives of such Persons, in each
case, acting in such capacity.
"U.S." or "United
States" means the United
States, its territories and possessions, any State of the United States and the
District of Columbia, and all
other areas subject to its jurisdiction.
"VWAP of AbbVie Shares" means the volume weighted average
price of an AbbVie Share for a ten trading day period, starting
with the opening of trading on the eleventh trading day prior to
the Completion Date to the closing of trading on the second to last
trading day prior to the Completion Date, as reported by
Bloomberg.
"Willful Breach" means a material breach of this
Agreement that is the consequence of an act or omission by a party
with the actual knowledge that the taking of such act or such
omission to take action would be a material breach of this
Agreement.
Each of the following terms is defined in the Section set forth
opposite such term:
TermSection
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AbbVie...............................................................................................................................
Preamble
AbbVie Balance
Sheet................................................................................................
Section 6.2(e)
AbbVie Capitalization
Date....................................................................................
Section 6.2(b)(i)
AbbVie Disclosure
Schedule..........................................................................................
Section 6.2
AbbVie Equity
Awards...........................................................................................
Section 6.2(b)(i)
AbbVie Financing
Information...............................................................................
Section 3.4(b)(i)
AbbVie
Options.......................................................................................................
Section 6.2(b)(i)
AbbVie Performance
Awards.................................................................................
Section 6.2(b)(i)
AbbVie Restricted
Stock
Units...............................................................................
Section 6.2(b)(i)
AbbVie
RSAs..........................................................................................................
Section 6.2(b)(i)
AbbVie SEC
Documents........................................................................................
Section 6.2(d)(i)
Acquirer
Sub.......................................................................................................................
Preamble
Agreement..........................................................................................................................
Preamble
Allergan Alternative
Proposal
NDA...........................................................................
Section 5.3(b)
Allergan Approval
Time.............................................................................................
Section 5.3(b)
Allergan Balance
Sheet...............................................................................................
Section 6.1(g)
Allergan
Capitalization
Date...................................................................................
Section 6.1(c)(i)
Allergan Change of
Recommendation...................................................................
Section 5.3(a)(ii)
Allergan Disclosure
Schedule.........................................................................................
Section 6.1
Allergan Exchange
Fund.........................................................................................
Section 8.1(d)(i)
Allergan Insurance
Policies........................................................................................
Section 6.1(u)
Allergan Material
Contract......................................................................................
Section 6.1(t)(i)
Allergan Memorandum
and Articles of
Association..................................................
Section 6.1(a)
Allergan Note Offers
and Consent
Solicitations........................................................
Section 7.9(b)
Allergan
Permits.....................................................................................................
Section 6.1(h)(ii)
Allergan Registered
IP............................................................................................
Section 6.1(q)(i)
Allergan Replacement
Option.........................................................................................
Section 4.1
Allergan Replacement
Share
Award...........................................................................
Section 4.2(a)
Allergan SEC
Documents........................................................................................
Section 6.1(e)(i)
Allergan Supplemental
Indenture...............................................................................
Section 7.9(b)
Benefits Continuation
Period......................................................................................
Section 7.4(a)
Claim
Expenses...........................................................................................................
Section 7.3(a)
Completion
Date.........................................................................................................
Section 8.1(a)
Consent
Solicitations..................................................................................................
Section 7.9(b)
Covered
Individual...............................................................................................
Section 5.1(b)(xii)
D&O
Claim.................................................................................................................
Section 7.3(a)
D&O Indemnified
Parties...........................................................................................
Section 7.3(a)
D&O Indemnifying
Parties.........................................................................................
Section 7.3(a)
Debt Offer
Documents................................................................................................
Section 7.9(b)
Equitable
Exceptions..............................................................................................
Section 6.1(d)(i)
Exchange
Ratio.......................................................................................................
Section 8.1(c)(ii)
Exchange Ratio
Modification
Number...................................................................
Section 8.1(c)(v)
Excluded Scheme
Share..............................................................................................
Section 3.3(c)
Financing
Information............................................................................................
Section 7.9(a)(ii)
Fractional
Entitlements...........................................................................................
Section 8.1(c)(ii)
Historical Financial
Statements...............................................................................
Section 7.9(a)(i)
internal
controls.....................................................................................................
Section 6.1(e)(vi)
IRS..........................................................................................................................
Section 6.1(o)(v)
Lease............................................................................................................................
Section 6.1(r)
Marketing
Material..................................................................................................
Section 7.9(a)(i)
Maximum
Premium....................................................................................................
Section 7.3(b)
New
Plans...................................................................................................................
Section 7.4(b)
Offers to
Exchange.....................................................................................................
Section 7.9(b)
Offers to
Purchase.......................................................................................................
Section 7.9(b)
Old
Plans.....................................................................................................................
Section 7.4(b)
PBGC......................................................................................................................
Section 6.1(j)(ii)
principal executive
officer......................................................................................
Section 6.1(e)(v)
principal financial
officer.......................................................................................
Section 6.1(e)(v)
Proxy
Statement.......................................................................................................
Section 3.1(a)(i)
Reverse Termination
Payment....................................................................................
Section 9.2(a)
Sarbanes-Oxley
Act................................................................................................
Section 6.1(e)(ii)
Scheme
Consideration............................................................................................
Section 8.1(c)(ii)
Section 7.2(d)
Categories...........................................................................................
Section 7.2(d)
Share
Cap................................................................................................................
Section 8.1(c)(v)
Share
Consideration................................................................................................
Section 8.1(c)(ii)
Specified
Termination................................................................................................
Section 9.2(b)
Subscription
Amount..................................................................................................
Section 3.3(c)
Subscription
Completion............................................................................................
Section 3.3(c)
Tax..........................................................................................................................
Section 6.1(o)(v)
Tax
Authority.........................................................................................................
Section 6.1(o)(v)
Tax
Return..............................................................................................................
Section 6.1(o)(v)
Taxable...................................................................................................................
Section 6.1(o)(v)
Taxation..................................................................................................................
Section 6.1(o)(v)
Taxes......................................................................................................................
Section 6.1(o)(v)
Title IV
Plan............................................................................................................
Section 6.1(j)(ii)
Transaction
Litigation...................................................................................................
Section 7.10
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Section 1.2 Construction.
(a) The following rules of interpretation shall apply to
this Agreement: (i) the words "hereof", "hereby", "herein" and
"hereunder" and words of like import used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement; (ii) the table of contents and
captions in this Agreement are included for convenience of
reference only and shall be ignored in the construction or
interpretation hereof; (iii) references to Articles and Sections
are to Articles and Sections of this Agreement unless otherwise
specified; (iv) all schedules annexed to this Agreement or referred
to in this Agreement, including the Allergan Disclosure Schedule
and the AbbVie Disclosure Schedule, are incorporated in and made a
part of this Agreement as if set forth in full in this Agreement;
(v) any capitalized term used in any schedule annexed to this
Agreement, including the Allergan Disclosure Schedule or the AbbVie
Disclosure Schedule, but not otherwise defined therein shall have
the meaning set forth in this Agreement; (vi) any singular term in
this Agreement shall be deemed to include the plural, and any
plural term the singular, and references to any gender shall
include all genders; (vii) whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation", whether or not they
are in fact followed by those words or words of like import; (viii)
"writing", "written" and comparable terms refer to printing, typing
and other means of reproducing words (including electronic media)
in a visible form; (ix) references to any applicable Law shall be
deemed to refer to such applicable Law as amended from time to time
and to any rules or regulations promulgated thereunder; (x)
references to any Contract are to that Contract as amended,
modified or supplemented from time to time in accordance with the
terms hereof and thereof; provided, that with respect to any
Contract listed on any schedule annexed to this Agreement or
referred to in this Agreement, including the Allergan Disclosure
Schedule or the AbbVie Disclosure Schedule, all such amendments,
modifications or supplements (other than such amendments,
modifications or supplements that are immaterial) must also be
listed in the appropriate schedule; (xi) references to any Person
include the successors and permitted assigns of that Person; (xii)
references "from" or "through" any date mean, unless otherwise
specified, "from and including" or "through and including",
respectively; (xiii) references to "dollars" and "$" means U.S.
dollars; (xiv) the term "made available" and words of similar
import mean that the relevant documents, instruments or materials
were (A) with respect to AbbVie, posted and made available to
AbbVie on the Allergan due diligence data site (or in any "clean
room" or as otherwise provided on an "outside counsel only" basis),
or, with respect to Allergan, posted or made available to Allergan
on the AbbVie due diligence data site (or in any "clean room" or as
otherwise provided on an "outside counsel only" basis), as
applicable, in each case, prior to the date hereof; or (B) filed or
furnished to the SEC prior to the date hereof; (xv) the word
"extent" in the phrase "to the extent" shall mean the degree to
which a subject or other theory extends and such phrase shall not
mean "if"; (xvi) any reference to an Irish legal term for any
action, remedy, method of judicial proceeding, legal document,
legal status, court, official or any legal concept or thing shall,
in respect of any jurisdiction other than Ireland, be deemed to include a reference to
what most nearly approximates in that jurisdiction to the Irish
legal term, (xvii) references to times are to New York City times unless otherwise
specified; and (xviii) the Parties have participated jointly in the
negotiation and drafting of this Agreement and, in the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as jointly drafted by the Parties and
no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any provision
of this Agreement.
ARTICLE 2
RULE 2.5 ANNOUNCEMENT, SCHEME DOCUMENT AND Allergan EQUITY AWARD
HOLDER PROPOSAL
Section 2.1 Rule 2.5 Announcement.
(a) Each Party confirms that its respective board of directors
(or a duly authorized committee thereof) has approved the contents
and release of the Rule 2.5 Announcement.
(b) Following the execution of this Agreement, Allergan and
AbbVie shall jointly, in accordance with, and for the purposes of,
the Takeover Rules, procure the release of the Rule 2.5
Announcement to a Regulatory Information Service by no later than
11:59 a.m., New York City time, on June 25, 2019, or such later time as may be
agreed between the Parties in writing.
(c) The obligations of Allergan and AbbVie under this Agreement,
other than the obligations under Section 2.1(b), shall be
conditional on the release of the Rule 2.5 Announcement to a
Regulatory Information Service.
(d) Allergan confirms that, as of the date hereof, the Allergan
Board considers that the terms of the Scheme as contemplated by
this Agreement are fair and reasonable and that the Allergan Board
has resolved to recommend to the Allergan Shareholders that they
vote in favor of the Resolutions. The recommendation of the
Allergan Board that the Allergan Shareholders vote in favor of the
Resolutions, and the related opinion of the financial adviser to
the Allergan Board, are set out in the Rule 2.5 Announcement and,
subject to Section 5.3, shall be incorporated in the Scheme
Document and any other document sent to Allergan Shareholders in
connection with the Acquisition.
(e) The Conditions are hereby incorporated in and shall
constitute a part of this Agreement.
Section 2.2 Scheme. Subject to
Section 3.6:
(a) Allergan agrees that it will propose the Scheme to the
Allergan Shareholders in the manner set out in
Article 3 and, subject to the satisfaction or, in the
sole discretion of the applicable Party, waiver (where permissible
under the provisions of the Rule 2.5 Announcement and/or the Scheme
Document) of the Conditions (with the exception of Conditions
2(iii) and 2(iv) and any other Conditions that by their nature are
to be satisfied on the Sanction Date (as defined in Appendix III of
the Rule 2.5 Announcement), but subject to the satisfaction or
waiver (where permissible under the provisions of the Rule 2.5
Announcement and/or the Scheme Document) of such Conditions), will,
in the manner set out in Article 3, petition the High Court to
sanction the Scheme so as to facilitate the implementation of the
Acquisition;
(b) each of AbbVie and Acquirer Sub agrees that it will
participate in the Scheme and agrees to be bound by its terms, as
proposed by Allergan to the Allergan Shareholders, and that it
shall, subject to the satisfaction or, in the sole discretion of
the applicable Party, waiver (where permissible under the
provisions of the Rule 2.5 Announcement and/or the Scheme Document)
of the Conditions, effect the Acquisition through the Scheme on the
terms set out in this Agreement and the Scheme; and
(c) each of the Parties agrees that it will perform all of
the obligations required of it in respect of the Acquisition on the
terms set out in this Agreement and/or the Scheme, and each will,
subject to the terms and conditions of this Agreement, including
Section 7.2, use its reasonable best efforts to take such
other steps as are within its power and are reasonably required of
it for the proper implementation of the Scheme, including those
required of it pursuant to this Agreement in connection with the
Completion.
Section 2.3 Change in Shares. If at any
time during the period between the date of this Agreement and the
earlier of (i) the Effective Time and (ii) the valid termination of
this Agreement pursuant to and in accordance with Article 9,
the outstanding Allergan Shares or AbbVie Shares shall have been
changed into, or exchanged for, a different number of shares or a
different class, by reason of any subdivision, reclassification,
reorganization, recapitalization, split, combination, contribution
or exchange of shares, or a stock dividend or dividend payable in
any other securities shall be declared with a record date within
such period, or any similar event shall have occurred, the Cash
Consideration and the Share Consideration and any payments to be
made under Article 4 and any other number or amount contained
in this Agreement which is based upon the price or number of the
Allergan Shares or the AbbVie Shares, as the case may be, shall be
correspondingly adjusted to provide the holders of Allergan Shares
and AbbVie Shares the same economic effect as contemplated by this
Agreement prior to such event. Nothing in this
Section 2.3 shall be construed to permit any Party to take any
action that is otherwise prohibited or restricted by any other
provision of this Agreement.
Section 2.4 Allergan Equity Award Holder
Proposal.
(a) Subject to the posting of the Scheme Document to the
Allergan Shareholders in accordance with Section 3.1, the
Parties agree that the Allergan Equity Award Holder Proposal will
be made to Allergan Equity Award Holders in respect of their
respective holdings of Allergan Options and/or Allergan Share
Awards in accordance with Rule 15 of the Takeover Rules and the
terms of the Allergan Share Plans.
(b) The Allergan Equity Award Holder Proposal shall be
despatched as a joint letter from Allergan and AbbVie and the
Parties shall reasonably agree to the final form of the letter to
be issued in respect of the Allergan Equity Award Holder Proposal
and all other documentation necessary to effect the Allergan Equity
Award Holder Proposal.
(c) Except as required by applicable Law, the High Court
and/or the Panel, no Party shall amend the Allergan Equity Award
Holder Proposal after its despatch without the consent of each
other Party (such consent not to be unreasonably withheld,
conditioned or delayed).
ARTICLE 3
IMPLEMENTATION OF THE SCHEME
Section 3.1 Responsibilities of Allergan in Respect
of the Scheme. Allergan shall:
(a) (i) be responsible for the preparation of a proxy
statement to be sent to the Allergan Shareholders in connection
with the matters to be submitted at the Court Meeting and the EGM
(such proxy statement, as amended or supplemented, the "Proxy
Statement") and the Scheme Document and all other documentation
necessary to effect the Scheme and to convene the EGM and Court
Meeting, (ii) provide AbbVie with drafts of the Proxy Statement and
the Scheme Document and afford AbbVie reasonable opportunity to
review and comment on the Proxy Statement and the Scheme Document
and such other documents and shall consider such comments in good
faith and (iii) subject to the foregoing clauses (i) and (ii), as
promptly as reasonably practicable after the date hereof, cause the
Proxy Statement and the Scheme Document to be filed with the SEC
and the Panel (in accordance with Rule 41.1(b) of the Takeover
Rules);
(b) for the purpose of implementing the Scheme, instruct a
barrister (of senior counsel standing) and provide AbbVie and its
Representatives with the opportunity to attend any meetings with
such barrister to discuss matters pertaining to the Scheme and any
issues arising in connection with it (except to the extent the
barrister is to advise on matters relating to the fiduciary duties
of the directors of Allergan or their responsibilities under the
Takeover Rules);
(c) as promptly as reasonably practicable, notify AbbVie
upon the receipt of any comments from the Panel or the SEC on, or
any request from the Panel or the SEC for amendments or supplements
to, the Proxy Statement, the Scheme Document, the Allergan Equity
Award Holder Proposal and the related forms of proxy and provide
AbbVie with copies of all material written correspondence between
it and its Representatives and the Panel and/or the SEC relating to
such documents;
(d) use its reasonable best efforts to respond to and
resolve all Panel and SEC comments with respect to the Proxy
Statement and the Scheme Document as promptly as practicable after
receipt thereof;
(e) as promptly as reasonably practicable, notify AbbVie of
any other matter of which it becomes aware which would reasonably
be expected to materially delay or prevent filing of the Proxy
Statement or the Scheme Document with the SEC and the Panel, as
applicable, or implementation of the Scheme as the case may be;
(f) prior to filing or the despatch of any amendment or
supplement to the Proxy Statement or the Scheme Document requested
by the Panel or the SEC, or responding in writing to any comments
of the Panel or the SEC with respect thereto, Allergan shall
provide AbbVie with a reasonable opportunity to review and comment
on such document or response and consider in good faith such
comments;
(g) cause the Proxy Statement to be mailed as promptly as
reasonably practicable after the date on which the SEC confirms
that it will not review the Proxy Statement or that it has no
further comments on the Proxy Statement;
(h) to the extent that clearance of the Proxy Statement or
the Scheme Document by the Panel might require that waivers and/or
derogations in respect of the Takeover Rules be sought and obtained
from the Panel, make a submission for (and use reasonable best
efforts to have approved) such waiver or derogation as promptly as
reasonably practicable after having provided AbbVie with a
reasonable opportunity to review and comment on such submission and
considering in good faith such comments;
(i) provide AbbVie with drafts of any and all pleadings,
affidavits, petitions and other filings prepared by Allergan for
submission to the High Court in connection with the Scheme prior to
their filing, and afford AbbVie reasonable opportunities to review
and comment on all such documents and consider in good faith such
comments;
(j) as promptly as reasonably practicable (taking into
account any requirements of the Panel with respect to the Scheme
Document and the SEC review (if any) with respect to the Proxy
Statement, that must be satisfied prior to the release of the
Scheme Document), make all necessary applications to the High Court
in connection with the implementation of the Scheme (including
issuing appropriate proceedings requesting the High Court to give
directions under Section 450(5) of the Act as to what are the
appropriate meetings to be held and to order that the Court Meeting
be convened as promptly as is reasonably practicable following the
Rule 2.5 Announcement and the SEC review (if any) of the Proxy
Statement by the SEC), and to use its reasonable best efforts to
ensure that the hearing of such proceedings occurs as promptly as
is reasonably practicable in order to facilitate the despatch of
the Scheme Document and seek such directions of the High Court as
it considers necessary or desirable in connection with such Court
Meeting and thereafter comply with such directions;
(k) procure the publication of the requisite advertisements
and despatch of the Scheme Document (in a form acceptable to the
Panel), Proxy Statement and the related forms of proxy for the use
at the Court Meeting and the EGM (the form of which shall be agreed
between the Parties, acting reasonably) (i) to Allergan
Shareholders on the register of members of Allergan on the record
date as agreed with the High Court, as promptly as reasonably
practicable after securing approval of the High Court to despatch
such documents, and (ii) to the holders of the Allergan Options and
the Allergan Share Awards as of such date, for information only, as
promptly as reasonably practicable after securing approval of the
High Court to despatch such documents, and thereafter shall publish
and/or post such other documents and information (the form of which
shall be agreed between the Parties, acting reasonably) as the High
Court and/or the Panel may approve or direct from time to time;
(l) unless the Allergan Board has effected an Allergan
Change of Recommendation pursuant to and in accordance with Section
5.3, and subject to the obligations of the Allergan Board under the
Takeover Rules, procure that the Proxy Statement and the Scheme
Document include the Scheme Recommendation;
(m) include in the Scheme Document a notice convening the
EGM to be held immediately following the Court Meeting to consider
and, if thought fit, approve the EGM Resolutions;
(n) prior to the Court Meeting, keep AbbVie reasonably
informed on a reasonably current basis (in each case to the extent
Allergan reasonably has access to such information) of the number
of proxy votes received in respect of resolutions to be proposed at
the Court Meeting and/or the EGM, and in any event provide such
number promptly upon the request of AbbVie or its Representatives
and, unless the Allergan Board has effected an Allergan Change of
Recommendation pursuant to and in accordance with Section 5.3, use
reasonable best efforts to solicit proxies as may be necessary to
pass the Resolutions at the Court Meeting and/or the EGM;
(o) notwithstanding any Allergan Change of Recommendation,
unless this Agreement has been validly terminated pursuant to and
in accordance with Article 9, hold the Court Meeting and the
EGM on the date set out in the Scheme Document, or such later date
as may be agreed in writing by the Parties (such agreements not to
be unreasonably withheld, conditioned or delayed), and in such a
manner as shall be approved, if necessary by the High Court and/or
the Panel, and propose the Resolutions without any amendments,
unless such amendments have been agreed to in writing by AbbVie,
such agreement not to be unreasonably withheld, conditioned or
delayed;
(p) subject to the terms of this Agreement, afford all such
cooperation and assistance as may reasonably be requested of it by
AbbVie in respect of the preparation and verification of any
document or in connection with any Clearance or confirmation
required for the implementation of the Scheme, including the
provision to AbbVie in a timely manner of such information and
confirmations relating to it, its Subsidiaries and any of its or
their respective directors or employees as AbbVie may reasonably
request;
(q) assume responsibility for the information relating to
it or any of its Subsidiaries contained in the Scheme Document, the
Proxy Statement or any other document sent to Allergan Shareholders
or filed with the High Court or in any announcement;
(r) review and provide comments (if any) in a reasonably
timely manner on all documentation submitted to it by AbbVie;
(s) following the Court Meeting and EGM, assuming the
Resolutions are duly passed (including by the requisite majorities
required under Section 453 of the Act in the case of the Court
Meeting) and all other Conditions are satisfied or, in the sole
discretion of the applicable Party, waived (where permissible under
the terms of the Rule 2.5 Announcement and/or the Scheme Document)
(with the exception of Conditions 2(iii) and 2(iv) and any other
Conditions that are by their nature to be satisfied on the Sanction
Date, but subject to the satisfaction or waiver (where permissible
under the provisions of the Rule 2.5 Announcement and/or the Scheme
Document) of such Conditions), take all necessary steps on the part
of Allergan to prepare and issue, serve and lodge all such court
documents as are required to seek the sanction of the High Court to
the Scheme as soon as possible thereafter;
(t) give such undertakings as are required by the High
Court in connection with the Scheme as are reasonably necessary or
desirable to implement the Scheme; and
(u) keep AbbVie reasonably informed as to the performance
of the obligations and responsibilities required of Allergan
pursuant to the Scheme.
Section 3.2 Responsibilities of AbbVie and Acquirer
Sub in Respect of the Scheme. AbbVie and Acquirer Sub
shall:
(a) either (i) instruct counsel to appear on its behalf at
the Court Hearing and undertake to the High Court to be bound by
the terms of the Scheme (including the issuance of the Share
Consideration pursuant thereto) insofar as it relates to AbbVie or
Acquirer Sub, or (ii) provide a written undertaking to the High
Court to be bound by the terms of the Scheme (including the
issuance of the Share Consideration pursuant thereto) insofar as it
relates to AbbVie or Acquirer Sub;
(b) if, and to the extent that, it or any of its Concert
Parties owns or is interested in Allergan Shares, exercise all of
its rights and, insofar as lies within its powers, procure that
each of its Concert Parties shall exercise all of their respective
rights, in respect of such Allergan Shares so as to implement, and
otherwise support the implementation of, the Scheme, including by
voting (and, in respect of interests in Allergan held via contracts
for difference or other derivative instruments, insofar as lies
within its powers, procuring that instructions are given to the
holder of the underlying Allergan Shares to vote) in favor of the
Resolutions or, if required by Law, the High Court or the Takeover
Rules, refraining from voting, at any Court Meeting and/or EGM as
the case may be;
(c) keep Allergan reasonably informed as to the performance
of the obligations and responsibilities required of AbbVie and
Acquirer Sub pursuant to the Scheme;
(d) subject to the terms of this Agreement (including
Section 7.2 hereof) and the Scheme, afford all such
cooperation and assistance as may reasonably be requested of it by
Allergan in respect of the preparation and verification of any
document or in connection with any Clearance or confirmation
required for the implementation of the Scheme, including the
provision to Allergan in a timely manner of such information and
confirmations relating to it, its Subsidiaries and any of its or
their respective directors or employees as Allergan may reasonably
request (including for the purposes of preparing the Scheme
Document);
(e) assume responsibility for the information relating to
it or any of its Subsidiaries contained in the Scheme Document, the
Proxy Statement or any other document sent to Allergan Shareholders
or filed with the High Court or in any announcement;
(f) review and provide comments (if any) in a reasonably
timely manner on all documentation submitted to it by Allergan;
(g) to the extent that clearance of the Proxy Statement or
the Scheme Document by the Panel might require that waivers and/or
derogations in respect of the Takeover Rules be sought and obtained
from the Panel, make a submission for (and use reasonable best
efforts to have approved) such waiver or derogation as promptly as
reasonably practicable after having provided Allergan with a
reasonable opportunity to review and comment on such submission and
considering in good faith such comments; and
(h) as promptly as reasonably practicable, notify Allergan
of any other matter of which it becomes aware which would
reasonably be expected to materially delay or prevent filing of the
Proxy Statement or the Scheme Document with the SEC and the Panel,
as applicable, or implementation of the Scheme, as the case may
be.
Section 3.3 Mutual Responsibilities of the
Parties.
(a) If any of the Parties becomes aware of any information
that, pursuant to the Takeover Rules, the Act, the Securities Act
or the Exchange Act, should be disclosed in an amendment or
supplement to the Scheme Document or the Proxy Statement, then such
Party shall promptly inform the other Party thereof and the Parties
shall cooperate with each other in submitting or filing such
amendment or supplement with the Panel, the SEC and/or the High
Court, as applicable, and, if required, in mailing such amendment
or supplement to the Allergan Shareholders and, for information
only, if required, to the holders of the Allergan Options or
Allergan Share Awards. Each of the Parties agrees to promptly
(i) correct any information provided by it for use in the Scheme
Document or the Proxy Statement, as applicable, if and to the
extent that such information shall have become false or misleading
in any material respect and (ii) supplement the information
provided by it specifically for use in the Scheme Document or the
Proxy Statement, as applicable, to include any information that
shall become necessary in order to make the statements in the
Scheme Document or the Proxy Statement, as applicable, in light of
the circumstances under which they were made, not misleading.
Allergan further agrees to cause the Scheme Document or the Proxy
Statement, as applicable, as so corrected or supplemented promptly
to be filed with the Panel and the SEC and to be despatched to its
stockholders, in each case as and to the extent required by
applicable Law. For purposes of this Section 3.3(a), any
information concerning the Allergan Group will be deemed to have
been provided by Allergan, and any information concerning the
AbbVie Group will be deemed to have been provided by AbbVie and/or
Acquirer Sub.
(b) Each Party shall provide the other Party with
reasonable prior notice of any proposed material oral communication
with the SEC, the Panel or the High Court and, except to the extent
prohibited by the SEC, the Panel or the High Court, afford the
other Party reasonable opportunity to participate therein, other
than with respect to any such communication to the extent related
to an Allergan Alternative Proposal or the termination of this
Agreement pursuant to and in accordance with Article 9.
(c) Except as the Panel may otherwise direct and subject to
the Panel's waiving any obligation for AbbVie or Acquirer Sub to
make a cash offer or provide a cash alternative under Rule 11 of
the Takeover Rules, and to ensure that Acquirer Sub is the sole
member of Allergan at the Effective Time, on such date as the
Parties shall agree but in any event prior to the Effective Time,
Acquirer Sub agrees to subscribe for, and Allergan agrees to allot
and issue to Acquirer Sub, one Allergan Share (the "Excluded Scheme
Share"), in consideration for which Acquirer Sub shall pay, or
cause to be paid to Allergan, an amount equal to the nominal value
of one Allergan Share (the "Subscription Amount"). Completion of
the subscription for the Excluded Scheme Share (the "Subscription
Completion") shall take place at a location of the Parties'
choosing on such date as the Parties shall agree but in any event
prior to the Effective Time. At the Subscription Completion: (i)
Acquirer Sub shall (A) subscribe for the Excluded Scheme Share, and
(B) pay, or cause to be paid, the Subscription Amount to Allergan
in cash, and (ii) Allergan shall (A) allot and issue the Excluded
Scheme Share to Acquirer Sub (or its nominee) credited as fully
paid, (B) procure that all appropriate entries are made in the
statutory records of Allergan in respect of the Excluded Scheme
Share, and (C) issue and deliver to Acquirer Sub a share
certificate in respect of the Excluded Scheme Share.
Section 3.4 Dealings with the Panel.
(a) Each of the Parties will (i) give the other reasonable
prior notice of any proposed meeting or material substantive
discussion or correspondence between it or its Representatives with
the Panel, or any amendment to be proposed to the Scheme in
connection therewith, and, except to the extent any such
correspondence relates to an Allergan Alternative Proposal or the
valid termination of this Agreement pursuant to and in accordance
with Article 9, afford the other reasonable opportunities to
review and make comments and suggestions with respect to the same
and consider in good faith such comments and suggestions, and (ii)
except to the extent any such meeting, discussion, correspondence
or submission relates to an Allergan Alternative Proposal or the
valid termination of this Agreement pursuant to and in accordance
with Article 9, keep the other reasonably informed of all such
meetings, discussions or correspondence that it or its
Representative(s) have with the Panel and not participate in any
meeting or discussion with the Panel concerning this Agreement or
the transactions contemplated by this Agreement unless it consults
with the other Party in advance, and, unless prohibited by the
Panel, gives such other Party the opportunity to attend and provide
copies of all written submissions it makes to the Panel and copies
(or, where verbal, a verbal or written summary of the substance) of
the Panel responses thereto provided always that any correspondence
or other information required to be provided under this
Section 3.4 may be redacted:
(i) to remove references
concerning the valuation of the businesses of Allergan;
(ii) to prevent the exchange
of confidential information as required by applicable Law
(provided that the redacting Party shall use its reasonable
best efforts to cause such information to be provided in a manner
that would not result in such confidentiality concerns); and
(iii) as necessary to address
reasonable privilege concerns (provided that the redacting
Party shall use its reasonable best efforts to cause such
information to be provided in a manner that would not result in
such privilege concerns).
(b) Allergan undertakes, if so reasonably requested by
AbbVie to, as promptly as practicable, provide its written consent
to AbbVie and to the Panel in respect of any application made by
AbbVie to the Panel:
(i) to redact any
commercially sensitive or confidential information specific to
AbbVie's financing arrangements for the Acquisition ("AbbVie
Financing Information") from any documents that AbbVie is
required to display pursuant to Rule 26(b)(xi) of the Takeover
Rules;
(ii) for a derogation from
the requirement under the Takeover Rules to disclose AbbVie
Financing Information in the Scheme Document, any supplemental
document or other document sent to Allergan Shareholders or the
holders of the Allergan Options or Allergan Share Awards pursuant
to the Takeover Rules;
(iii) for a derogation from
Rule 16.1 and/or 20.1 of the Takeover Rules to permit AbbVie to
implement, and to pay fees to lenders in connection with, its
Financing and syndication arrangements with respect to its
Financing, and to provide information to lenders and prospective
lenders on such terms as the Panel may permit; and
(iv) for a derogation from
the disclosure requirements of Rule 24.3 of the Takeover Rules,
seeking consent to the aggregation of dealings for purposes of
disclosure in the Scheme Document and seeking consent to the
aggregation on a bi-weekly basis of changes in information
announced pursuant to Rule 2.10 of the Takeover Rules.
(c) AbbVie undertakes, if so requested by Allergan to, as
promptly as practicable, provide its written consent to Allergan
and to the Panel in respect of any application made by Allergan to
the Panel to permit entering into and effecting the retention,
bonus and/or benefit arrangements contemplated by
Section 5.1(b)(xii) of the Allergan Disclosure Schedule.
(d) AbbVie and Allergan undertake, if so requested by the
other Party to, as promptly as reasonably practicable, issue its
written consent to the other Party and to the Panel in respect of
any application reasonably requesting any derogation, permission or
consent from the Panel in connection with the Takeover Rules.
(e) Notwithstanding the foregoing provisions of this
Section 3.4, neither Allergan nor AbbVie shall be required to
take any action pursuant to the foregoing provisions (a) through
(d) if such action is prohibited by the Panel (unless the Panel
decision is successfully appealed by either Allergan or
AbbVie).
(f) Nothing in this Agreement shall in any way limit the
Parties' obligations under the Takeover Rules.
Section 3.5 No Scheme Amendment by
Allergan. Except as required by applicable Law, the High
Court and/or the Panel, Allergan shall not take any of the
following actions after despatch of the Scheme Document, in each
case, without the prior written consent of AbbVie:
(a) amend the Scheme;
(b) adjourn or postpone (or propose an adjournment or
postponement of) the Court Meeting or the EGM; provided, however,
that Allergan may, without the consent of, but after
consultation with, AbbVie, adjourn or postpone (or propose to
adjourn or postpone) the Court Meeting or EGM if (i) in the case of
adjournment, such adjournment was requested by the Allergan
Shareholders (but only to the extent the proposal for such
adjournment was not proposed by Allergan or any of its Affiliates
or their respective Representatives), (ii) reasonably necessary to
ensure that any required supplement or amendment to the Scheme
Document or Proxy Statement is provided to the Allergan
Shareholders or to permit dissemination of information which is
material to the Allergan Shareholders voting at the Court Meeting
or the EGM (but only for so long as the Allergan Board determines
in good faith, after having consulted with outside counsel, as is
reasonably necessary or advisable to give the Allergan Shareholders
sufficient time to evaluate any such disclosure or information), or
(iii) as of the time the Court Meeting or EGM is scheduled (as set
forth in the Scheme Document or Proxy Statement), there are
insufficient Allergan Shares represented (either in person or by
proxy) (A) to constitute a quorum necessary to conduct the business
of the Court Meeting or the EGM (but only until a meeting can be
held at which there are a sufficient number of Allergan Shares
represented to constitute a quorum) or (B) voting for the approval
of the Court Resolutions or the EGM Resolutions, as applicable (but
only until a meeting can be held at which there are a sufficient
number of votes of Allergan Shareholders to approve the Court
Meeting Resolutions or the EGM Resolutions, as applicable);
provided, further, that, notwithstanding the foregoing, other than
any adjournments or postponements required by applicable Law,
including adjournments or postponements to the extent reasonably
necessary or advisable to ensure that any required supplement or
amendment to the Proxy Statement is provided or made available to
Allergan Shareholders or to permit dissemination of information
which is material to shareholders voting at the Court Meeting and
EGM and to give the Allergan Shareholders sufficient time to
evaluate any such supplement or amendment or other information, no
such adjournment or postponement pursuant to clause (i) or (iii)
shall, without the prior written consent of AbbVie (such consent
not to be unreasonably withheld, conditioned or delayed), be for a
period exceeding 15 Business Days and Allergan may not adjourn or
postpone the Court Meeting or the EGM pursuant to clause (i) or
(iii) more than three times; or
(c) amend the Resolutions (in each case, in the form set
out in the Scheme Document) after despatch of the Scheme Document
without the consent of AbbVie (such consent not to be unreasonably
withheld, conditioned or delayed).
Section 3.6 Switching to a Takeover Offer.
(a) Subject to the terms of this Section 3.6, in the
event that AbbVie reasonably determines that a competitive
situation (as that term is defined in the Takeover Rules) exists
or, based on facts known at the time, may reasonably be expected to
arise in connection with the Acquisition, AbbVie may elect (subject
to receiving the Panel's consent, if required) to implement the
Acquisition by way of the Takeover Offer (rather than the Scheme),
whether or not the Scheme Document has been posted.
(b) If AbbVie elects to implement the Acquisition by way of
the Takeover Offer, Allergan undertakes to provide AbbVie and its
Representatives as promptly as reasonably practicable with all such
information about the Allergan Group (including directors and their
connected persons) as may reasonably be required for inclusion in
the Takeover Offer Document (and any prospectus in connection with
the Share Consideration) and to provide all such other assistance
as may reasonably be required by the Takeover Rules in connection
with the preparation of the Takeover Offer Document, including
reasonable access to, and ensuring the provision of reasonable
assistance by, its management and Representatives.
(c) If AbbVie elects to implement the Acquisition by way of
a Takeover Offer, Allergan agrees:
(i) that the Takeover Offer
Document will contain provisions consistent with the terms and
conditions set out in the Rule 2.5 Announcement, the relevant
Conditions and such other further terms and conditions as agreed
(including any modification thereto) between AbbVie and the Panel;
provided, however, that the terms and conditions of the Takeover
Offer shall be at least as favorable to the Allergan Shareholders
and the holders of Allergan Options and Allergan Share Awards as
those which would apply in relation to the Scheme (except for the
80% acceptance condition contemplated by paragraph 9 of Appendix
III to the Rule 2.5 Announcement);
(ii) to reasonably co-operate
and consult with AbbVie in the preparation of the Takeover Offer
Document or any other document or filing (including any necessary
prospectus in respect of the Share Consideration) which is required
for the purposes of implementing the Acquisition; and
(iii) that, subject to the
obligations of the Allergan Board under the Takeover Rules, and
unless the Allergan Board has made an Allergan Change of
Recommendation pursuant to and in accordance with Section 5.3, the
Takeover Offer shall incorporate a recommendation to the Allergan
Shareholders from the Allergan Board to accept the Takeover Offer
and such recommendation shall not subsequently be withdrawn,
adversely modified or qualified except as contemplated by Section
5.3.
(d) If AbbVie elects to implement the Acquisition by way of
the Takeover Offer in accordance with Section 3.6(a), the
Parties mutually agree:
(i) to prepare and file with,
or submit to, the SEC, the Panel and the High Court, all documents,
amendments and supplements required to be filed therewith or
submitted thereto pursuant to the Takeover Rules, the Securities
Act, the Exchange Act, or otherwise by applicable Law in connection
with the Takeover Offer and to make any applications or initiate
any appearances as may be required by or desirable to the High
Court for the purpose of discontinuing, cancelling or terminating
the High Court proceedings initiated in connection with the Scheme
and, unless the Allergan Board has made an Allergan Change of
Recommendation, each Party shall have reasonable opportunities to
review and make comments on all such documents, amendments and
supplements and, following good faith consideration of such
comments by the other Party and approval of such documents,
amendments and supplements by the other Party, which approval shall
not be unreasonably withheld, conditioned or delayed, file or
submit, as the case may be, such documents, amendments and
supplements with or to the SEC, the Panel and the High Court (as
applicable);
(ii) to provide the other
Party with any comments received from the SEC, the Panel or the
High Court on any documents filed by it with the SEC, the Panel or
the High Court promptly after receipt thereof, other than with
respect to any such documents to the extent related to an Allergan
Alternative Proposal; and
(iii) to provide the other
Party with reasonable prior notice of any proposed material oral
communication with the SEC, the Panel or the High Court and, except
to the extent prohibited by the SEC, the Panel or the High Court,
afford the other Party reasonable opportunity to participate
therein, other than with respect to any such communication to the
extent related to an Allergan Alternative Proposal.
(e) If the Takeover Offer is consummated, AbbVie shall
cause Acquirer Sub (or their respective designees) to effect as
promptly as reasonably practicable, following it becoming entitled
under the Act to do so, a compulsory acquisition of any Allergan
Shares under section 457 of the Act not acquired in the Takeover
Offer for the same consideration per share as provided for in the
Takeover Offer.
(f) For clarity and except as may be required by the
Takeover Rules (and without limiting any other provision of this
Agreement), nothing in this Section 3.6 shall require
Allergan to provide AbbVie with any information with respect to, or
to otherwise take or fail to take any action in connection with
Allergan's consideration of or response to, any actual or potential
Allergan Alternative Proposal.
ARTICLE 4
EQUITY AWARDS
Section 4.1 Allergan Options. As of
immediately prior to the Effective Time, by virtue of the
occurrence of the Effective Time and without any action on the part
of the holder thereof, each Allergan Option that is outstanding and
unexercised immediately prior to the Effective Time shall be
substituted with an option, granted under the AbbVie Share Plan (an
"Allergan Replacement Option"), to acquire (a) that number of whole
AbbVie Shares (rounded down to the nearest whole share) equal to
the product obtained by multiplying (i) the number of Allergan
Shares subject to such Allergan Option immediately prior to the
Effective Time by (ii) the Equity Award Conversion Ratio, (b) at an
exercise price per AbbVie Share (rounded up to the nearest whole
cent) equal to the quotient obtained by dividing (i) the exercise
price per Allergan Share of such Allergan Option by (ii) the Equity
Award Conversion Ratio. Except as otherwise provided in this
Section 4.1, each such Allergan Replacement Option granted
under the AbbVie Share Plan pursuant to this Section 4.1 shall
continue to have, and shall be subject to, the same terms and
conditions that applied to the corresponding Allergan Option
immediately prior to the Effective Time, except for terms rendered
inoperative by reason of the transactions contemplated by this
Agreement or for such other immaterial administrative or
ministerial changes as in the reasonable and good faith
determination of AbbVie are appropriate to effectuate the
administration of the Allergan Replacement Options and are not
adverse (other than in any de minimis respect) to any
holders of Allergan Options.
Section 4.2 Allergan Share Awards.
(a) As of immediately prior to the Effective Time, by
virtue of the occurrence of the Effective Time and without any
action on the part of the holder thereof, each Allergan Share Award
that is outstanding immediately prior to the Effective Time shall,
by virtue of the occurrence of the Effective Time and without any
action on the part of the holders thereof, be substituted with an
award, granted under the AbbVie Share Plan (an "Allergan
Replacement Share Award"), with respect to a number of whole AbbVie
Shares (rounded up to the nearest whole share) equal to the product
obtained by multiplying (i) the applicable number of Allergan
Shares subject to such Allergan Share Award (including any
corresponding dividend equivalent units) immediately prior to the
Effective Time by (ii) the Equity Award Conversion Ratio.
Each Allergan PSU Award shall be converted into an AbbVie
restricted stock unit award, and for any Allergan PSU Award with a
performance period that remains subject to performance vesting
conditions as of the date hereof (i.e., any Allergan PSU Award for
which the level of performance vesting has not yet been
determined), the number of Allergan Shares underlying such Allergan
PSU Award shall be equal to 130% of the target number of Allergan
Shares subject to such Allergan PSU Award. Except as
otherwise provided in this Section 4.2(a), each Allergan
Replacement Share Award granted under the AbbVie Share Plan
pursuant to this Section 4.2(a) shall continue to have,
and shall be subject to, the same terms and conditions (including,
for any Allergan PSU Award, the time vesting conditions provided in
the applicable award agreement, but excluding any performance-based
vesting conditions) that applied to the corresponding Allergan
Share Award immediately prior to the Effective Time, except for
terms rendered inoperative by reason of the transactions
contemplated by this Agreement or for such other immaterial
administrative or ministerial changes as in the reasonable and good
faith determination of AbbVie are appropriate to effectuate the
administration of the Allergan Replacement Share Awards and are not
adverse (other than in any de minimis respect) to any
holders of Allergan Share Awards.
(b) The actions contemplated by this
Section 4.2 shall be taken in accordance with
Section 409A and, if applicable, Section 422 of the
Code.
Section 4.3 Other Actions in Connection With
Substitution of Allergan Options and Allergan Share Awards.
(a) As soon as practicable after the Effective Time, AbbVie
shall deliver to the holders of Allergan Replacement Options and
Allergan Replacement Share Awards appropriate notices setting forth
such holders' rights, and the applicable award agreements
evidencing the grants of such Allergan Replacement Options and
Allergan Replacement Share Awards. The Allergan Replacement
Options and Allergan Replacement Share Awards will be settled in
AbbVie Shares, and AbbVie shall take all corporate action necessary
to effectuate the foregoing. Notwithstanding the foregoing,
and for purposes of clarity, it is understood by AbbVie, Allergan
and Acquirer Sub that the Allergan Replacement Options and Allergan
Replacement Share Awards shall be awarded and issued under the
AbbVie Share Plan. For clarity, the terms and conditions
applicable to such Allergan Replacement Options and Allergan
Replacement Share Awards shall be no less favorable than the terms
and conditions (other than, in the case of the Allergan PSU Awards,
as provided above, performance-based vesting conditions) set forth
in the Allergan Share Plans and the award agreements pursuant to
which the replaced Allergan Options and Allergan Share Awards were
originally granted, notwithstanding that the Allergan Replacement
Options and Allergan Replacement Share Awards will be issued under
the AbbVie Share Plan and corresponding award agreements issued
thereunder. For clarity, the Allergan Replacement Options and
Allergan Replacement Share Awards shall comply with the
requirements of "Qualified Replacement Awards" with respect to any
Allergan Share Awards granted under the Allergan 2013 Plan.
(b) AbbVie shall take all corporate action necessary to
reserve for issuance a sufficient number of AbbVie Shares for
delivery with respect to Allergan Replacement Options and Allergan
Replacement Share Awards substituted by it in accordance with
Section 4.1, Section 4.2(a) and this
Section 4.3. To the extent necessary, AbbVie shall, no
later than the tenth day following the Effective Date, file a
registration statement on Form S-8 (or any successor or other
appropriate form) with respect to the AbbVie Shares subject to such
Allergan Replacement Options and Allergan Replacement Share Awards
pursuant to Section 4.1, Section 4.2(a) and this
Section 4.3.
Section 4.4 Reasonable Best Efforts. Each
of the Parties shall use its reasonable best efforts to take all
actions reasonably necessary to effectuate the transactions
contemplated by this Article 4, including having the
applicable board or committee administering the plans governing the
affected awards, adopt resolutions necessary to effect the
foregoing.
Section 4.5 Amendment of Articles. Allergan
shall procure that a special resolution be proposed to the Allergan
Shareholders at the EGM proposing that the Allergan Memorandum and
Articles of Association be amended so that any Allergan Shares
allotted following the EGM will either be subject to the terms of
the Scheme or acquired by AbbVie for the same consideration per
Allergan Share as shall be payable to Allergan Shareholders under
the Scheme (depending upon the timing of such allotment); provided,
however, that nothing in such amendment to the Allergan Memorandum
and Articles of Association shall prohibit the sale (whether on a
stock exchange or otherwise) of any Allergan Shares issued on the
exercise of Allergan Options or vesting or settlement of Allergan
Share Awards, as applicable, following the EGM but prior to the
sanction of the Scheme by the High Court, it being always
acknowledged that each and every Allergan Share will be bound by
the terms of the Scheme.
ARTICLE 5
ALLERGAN AND ABBVIE CONDUCT
Section 5.1 Conduct of Business by
Allergan.
(a) From the date of this Agreement until the earlier of
the Completion and valid termination of this Agreement pursuant to
and in accordance with Article 9, except (x) as prohibited or
required by applicable Law, (y) as set forth in
Section 5.1 of the Allergan Disclosure Schedule, or (z)
as otherwise required or expressly contemplated by this Agreement,
unless AbbVie shall otherwise consent in writing (which consent
shall not be unreasonably withheld, conditioned or delayed),
Allergan shall, and shall cause each of its Subsidiaries to, use
commercially reasonable efforts (1) to conduct its business in the
ordinary course of business consistent with past practice in all
material respects and in compliance in all material respects with
all applicable Laws, and (2) to preserve intact its business
organization and relationships with customers, members, suppliers,
licensors, licensees and other Third Parties and keep available the
services of its present officers and employees; provided, however,
that no action taken by Allergan or its Subsidiaries with respect
to matters explicitly permitted by an exception to any of Section
5.1(b)(i) through (xvi) will be a breach of this sentence.
(b) Without limiting the generality of the foregoing,
except (A) as prohibited or required by applicable Law,
(B) as set forth in Section 5.1 of the Allergan
Disclosure Schedule, or (C) as otherwise required or expressly
contemplated by this Agreement, without AbbVie's prior written
consent (which, except in the case of 5.1(b)(xvi) (with respect to
the settlement of any Action set forth on Section 7.1(e) of
the Allergan Disclosure Schedule), shall not be unreasonably
withheld, conditioned or delayed), Allergan shall not, and shall
cause each of its Subsidiaries not to:
(i) in the case of Allergan
and each of its Significant Subsidiaries, amend its Organizational
Documents other than, with respect to each Significant Subsidiary,
amendments to Organizational Documents that would not prohibit or
hinder, impede or delay in any material respect the consummation of
the transactions contemplated hereby (including the
Acquisition);
(ii) (A) subject to the
provisions in Section 5.3, merge or consolidate with any other
Person, or acquire (including by merger, consolidation, or
acquisition of stock or assets) any interest in any corporation,
partnership, other business organization or any division or
business thereof or any assets, securities or property that (in the
case of such assets, securities or property) constitute all or a
material portion of such Person or any division or business
thereof, other than (1) transactions (x) solely among Allergan and
one or more of its wholly owned Subsidiaries or (y) solely among
Allergan's wholly owned Subsidiaries and (2) acquisitions of
inventory or equipment in the ordinary course of business
consistent with past practice, or (B) adopt a plan of complete or
partial liquidation, dissolution, recapitalization or
restructuring, other than a liquidation or dissolution of any of
Allergan's immaterial wholly owned Subsidiaries;
(iii) (A) split, combine or reclassify any shares of its
capital stock (other than transactions (1) solely among Allergan
and one or more of its wholly owned Subsidiaries or (2) solely
among the Allergan's wholly owned Subsidiaries), (B) amend any
term or alter any rights of any of its outstanding Equity
Securities, (C) declare, set aside or pay any dividend or make
any other distribution (whether in cash, stock, property or any
combination thereof) in respect of any Equity Securities, other
than (x) the declaration and payment by Allergan of quarterly cash
dividends on the outstanding Allergan Shares in an amount per
quarter not to exceed $0.74 per
outstanding Allergan Share and with the timing of the declaration,
record and payment dates in any given quarter materially consistent
with the timing of the declaration, record and payment dates for
the comparable quarter in the prior fiscal year and (y) dividends
or distributions by a Subsidiary of Allergan to Allergan or a
wholly owned Subsidiary of Allergan, or (D) redeem,
repurchase, cancel or otherwise acquire or offer to redeem,
repurchase, or otherwise acquire any of its Equity Securities or
any Equity Securities of any Subsidiary of Allergan, other than (x)
repurchases of Allergan Shares in connection with the exercise of
Allergan Options or the vesting or settlement of Allergan Share
Awards (including in satisfaction of any amounts required to be
deducted or withheld under applicable Law) in accordance with the
terms of such Allergan Equity Awards (I) outstanding as of the date
of this Agreement (in accordance with their existing terms as of
the date hereof) or (II) granted after the date of this Agreement
(to the extent expressly permitted by Section 5.1(b)(iii) of
the Allergan Disclosure Schedule) and (y) transactions among
Allergan and its wholly owned Subsidiaries or among Allergan's
wholly owned Subsidiaries;
(iv) issue, deliver or sell,
or authorize the issuance, delivery or sale of, any Equity
Securities, other than (A) the issuance of any Allergan Shares upon
the exercise of Allergan Options, the accrual of any dividend
equivalents under any dividend equivalent rights applicable to any
Allergan Equity Awards, or the vesting or settlement of the
Allergan Share Awards, and/or the withholding of Allergan Shares to
satisfy Tax obligations pertaining to the exercise of Allergan
Options or the vesting or settlement of Allergan Equity Awards or
to satisfy the exercise price with respect to Allergan Options or
to effectuate an optionee direction upon exercise of an Allergan
Options that, in each case, are (x) outstanding as of the date of
this Agreement (in accordance with their existing terms as of the
date hereof), or (y) granted after the date of this Agreement (to
the extent expressly permitted by Section 5.1(b)(iii) of the
Allergan Disclosure Schedule), (B) transactions with respect to any
employer stock fund under the Allergan Benefit Plans that are
tax-qualified retirement or non-qualified supplemental savings
retirement plans which are taken in accordance with the existing
terms of such Allergan Benefit Plans as of the date hereof and
applicable Law, or (C) in connection with transactions (1) solely
among Allergan and one or more of its wholly owned Subsidiaries or
(2) solely among Allergan's wholly owned Subsidiaries;
(v) authorize, make or incur
any capital expenditures or obligations or liabilities in
connection therewith in excess of $400
million in the aggregate during fiscal year 2019 or in
excess of $87.5 million in the
aggregate during any fiscal quarter in 2020;
(vi) sell, lease, license,
transfer or otherwise dispose of any Subsidiary of Allergan or any
assets, securities or properties of the Allergan Group, other than
(A) sales or dispositions of inventory, goods, services, tangible
personal property (including equipment) or other immaterial assets,
in each case in the ordinary course of business consistent with
past practice, (B) transactions (1) solely among Allergan and one
or more of its wholly owned Subsidiaries or (2) solely among
Allergan's wholly owned Subsidiaries or (C) any non-exclusive
license of Intellectual Property granted in connection with a
settlement of a claim of litigation entered into by Allergan or by
any of its Subsidiaries in the ordinary course of business
consistent with past practice and in accordance with Section
5.1(b)(xvi);
(vii) sell, assign, license
(including sublicense), abandon, allow to lapse, transfer or
otherwise dispose of, or create or incur any Lien (other than a
Permitted Lien) on, any material Intellectual Property, other than
in the ordinary course of business consistent with past practice
(A) pursuant to non-exclusive licenses, (B) for the purpose of
abandoning, allowing to lapse or otherwise disposing of immaterial,
obsolete or worthless assets or (C) for the purpose of abandoning
or allowing to lapse patent applications or applications to
register Intellectual Property during the ordinary course of
prosecution;
(viii) (A) make any material
loans, advances or capital contributions to any other Person, other
than (1) loans, advances or capital contributions (a) by Allergan
to or in, as applicable, one or more of its wholly owned
Subsidiaries or (b) by any Subsidiary of Allergan to or in, as
applicable, Allergan or any wholly owned Subsidiary of Allergan, or
(2) capital contributions required under the terms of Contracts in
effect as of the date hereof, or (B) incur, assume, guarantee or
repurchase or otherwise become liable for any indebtedness for
borrowed money, issue or sell any debt securities or any options,
warrants or other rights to acquire debt securities (in each case,
whether, directly or indirectly, on a contingent basis or
otherwise) or enter into any interest rate or currency swaps,
forward currency or interest rate contracts or other interest rate
or currency hedging arrangements, other than (1) borrowings under
Allergan's or its Subsidiaries' existing credit facilities (as in
effect as of the date hereof) or credit facilities incurred in
compliance with this Section 5.1(b)(viii)(B) in accordance with the
terms thereof and commercial paper arrangements backstopped
thereby, (2) intercompany indebtedness among Allergan and its
wholly owned Subsidiaries or among Allergan's wholly owned
Subsidiaries, (3) indebtedness for borrowed money incurred to
replace, renew, extend, refinance or refund any existing
indebtedness of Allergan or any of its Subsidiaries set forth in
Section 5.1(b)(viii) of the Allergan Disclosure Schedule,
which indebtedness is (a) (i) prepayable or redeemable at any time
(subject to customary notice requirements) without penalty (other
than customary eurocurrency rate breakage) or (ii) on terms
(including, with respect to tenor, that the tenor of such
indebtedness does not exceed the tenor of the indebtedness being
replaced, renewed, extended, refinanced or refunded at the time it
was originally incurred) that are substantially consistent with
those contained in the indebtedness being replaced, renewed,
extended, refinanced or refunded (other than with respect to the
interest rate applicable thereto, which shall be on commercially
reasonable terms) and (b) not in a principal amount greater than
such indebtedness being replaced, renewed, extended, refinanced or
refunded or, in the case of any "revolving" credit facility, the
aggregate amount that may be incurred under the credit agreement
governing such indebtedness being replaced, renewed, extended,
refinanced or refunded (as in effect as of the date hereof), (4)
guarantees of third party indebtedness of Allergan or its wholly
owned Subsidiaries outstanding on the date hereof or otherwise
incurred in compliance with this Section 5.1(b)(viii)(B) and
(5) entry by Allergan or its Subsidiaries into interest rate or
currency swaps, forward currency or interest rate contracts or
other interest rate or currency hedging arrangements, in each case
in the ordinary course of business consistent with past
practice;
(ix) create or incur any Lien
(other than a Permitted Lien) on any material assets or properties
other than (A) Liens created or incurred in the ordinary course of
business consistent with past practice, (B) pursuant to
non-exclusive licenses or (C) Liens that may be discharged at or
prior to the Completion;
(x) other than in connection
with any matter to the extent specifically permitted by any other
subclause of Section 5.1(b) or by Section 5.1 of the
Allergan Disclosure Schedule (A) enter into any Allergan Material
Contract other than in the ordinary course of business consistent
with past practice (except that no Allergan Material Contract that
is a collaboration agreement, product license agreement, joint
venture or similar strategic partnership containing exclusivity or
non-competition restrictions of the type described in Section
6.1(A)(t)(i)(C) shall be entered into) or (B) terminate, renew,
extend or in any material respect modify or amend (including
waiving, releasing or assigning any material right or claim
thereunder) any Allergan Material Contract, other than in the
ordinary course of business consistent with past practice (except
that no Allergan Material Contract that is a collaboration
agreement, product license agreement, joint venture or similar
strategic partnership containing exclusivity or non-competition
restrictions of the type described in Section 6.1(A)(t)(i)(C) shall
be terminated, renewed, extended or in any material respect
modified or amended);
(xi) [reserved];
(xii) except as required by
the terms of an Allergan Benefit Plan as in effect on the date
hereof, (A) grant (or increase the value of) any change in control,
equity or equity-based awards, or severance, termination or similar
pay, to (or amend any existing arrangement with) any current or
former director, officer, employee or individual independent
contractor of Allergan or any of its Subsidiaries (each, a
"Covered Individual"), (B) enter into any employment,
deferred compensation or other similar agreement (or any extension
of, or amendment to, any such existing agreement) with any Covered
Individual at global grade level 16 or above, (C) establish, adopt,
enter into, amend or terminate any Allergan Benefit Plan (or any
plan, program, policy, scheme, trust, fund, practice, agreement or
arrangement that would be an Allergan Benefit Plan if in effect on
the date hereof) (including any union or works council agreement),
provided that, notwithstanding this clause (C), Allergan and
its Subsidiaries may (I) enter into or make amendments to such
Allergan Benefit Plans and labor agreements in the ordinary course
of business consistent with past practice that neither contravene
the other covenants set forth in this Section 5.1(b)(xii) nor
materially increase the annual cost to Allergan of maintaining the
affected Allergan Benefit Plans or other plan, trust, fund policy,
practice, agreement or agreement or arrangement which would, if in
effect as of the date of this Agreement, constitute an Allergan
Benefit Plan, (II) enter into third party contracts for the
provision of services to such Allergan Benefit Plans, including
benefit administration, that will not materially increase the
annual cost to Allergan of maintaining the affected Allergan
Benefit Plan or other plan, trust, fund policy, practice, or
agreement or arrangement, and (III) enter into (x) employment
agreements with employees in the U.S. terminable on less than
thirty (30)-days' notice without penalty or liability and (y)
employment agreements with employees in non-U.S. jurisdictions that
are terminable without any liability beyond the minimum required by
applicable Law, in each case, in the ordinary course of business
consistent with past practice and only with respect to any Covered
Individual below global grade level 16, (D) increase (except as
expressly permitted by Section 5.1(b)(xii) of the Allergan
Disclosure Schedule), or accelerate the payment, vesting or funding
of, the incentive, equity or equity-based awards, bonus opportunity
or other compensation payable under any Allergan Benefit Plan or
otherwise, (E) hire or terminate (other than for "cause") any
individual who would be upon hire (or is at the time of
termination) at global grade level 16 or above, or (F) pay or
provide any compensation or benefit to any Covered Individual at
global level grade 16 or above, other than the continued payment of
compensation and the continued provision of existing benefits in
the ordinary course of business consistent with past practice;
(xiii) make any material
change in any method of financial accounting or financial
accounting principles or practices, except for any such change
required by reason of (or, in the reasonable good-faith judgment of
Allergan, advisable under) a change in GAAP or applicable Law or
SEC Policy;
(xiv) [reserved];
(xv) (A) make, change or
revoke any material Tax election; (B) change the annual Tax
accounting period of any material Subsidiary; (C) adopt or change
any material method of Tax accounting; (D) enter into any material
closing agreement with respect to Taxes; or (E) settle or surrender
any material Tax claim, audit or assessment for an amount in excess
of reserves therefor on the financial statements of Allergan and
its Subsidiaries; provided that no term of such settlement or
surrender would be reasonably expected to materially increase the
Tax liability of AbbVie, Allergan or their respective Subsidiaries
following the Closing;
(xvi) settle or compromise,
or propose to settle or compromise, any Action involving or against
Allergan or any of its Subsidiaries (including any Action involving
or against any officer or director of Allergan or any of its
Subsidiaries in their capacities as such, but excluding any Action,
audit, claim or other proceeding in respect of Taxes), other than
any settlement or compromise (or proposed settlement or compromise)
that (A)(i) does not involve or otherwise relate to, directly or
indirectly, any current or former Allergan Product or any current
or former material Owned Intellectual Property or material Licensed
Intellectual Property, (ii) is for an amount not to exceed
$10 million individually or
$50 million in the aggregate, and
(iii) does not involve any material non-monetary relief, including
anything that would restrict the operation or conduct of Allergan
or any of its Subsidiaries in any material respect (or, following
Completion, of AbbVie or any of its Subsidiaries in any material
respect) or (B) solely involves matters in which Allergan and each
of its Subsidiaries party thereto (if any) is a plaintiff; provided
that, notwithstanding anything to the contrary in the foregoing, in
no case shall Allergan or any of its Subsidiaries settle any Action
set forth on Section 7.1(e) of the Allergan Disclosure
Schedule without the prior written consent of AbbVie; or
(xvii) agree, commit or
propose to do any of the foregoing.
Section 5.2 Conduct of Business by AbbVie.
(a) From the date of this Agreement until the earlier of
the Completion and valid termination of this Agreement pursuant to
and in accordance with Article 9, except (A) as prohibited or
required by applicable Law, (B) as set forth in
Section 5.1 of the AbbVie Disclosure Schedule, or
(C) as otherwise required or expressly contemplated by this
Agreement, without Allergan's prior written consent (which consent
shall not be unreasonably withheld, conditioned or delayed), AbbVie
shall not, and shall cause each of its Subsidiaries not to:
(i) amend AbbVie's or
Acquirer Sub's Organizational Documents in any manner that would
prohibit or hinder, impede or delay in any material respect the
consummation of the transactions contemplated hereby (including the
Acquisition); provided that any amendment to its certificate
of incorporation to increase the authorized number of shares of any
class or series of the capital stock of AbbVie or to create a new
series of capital stock of AbbVie shall in no way be restricted by
the foregoing;
(ii) acquire (including by
merger, consolidation, or acquisition of stock or assets) any
interest in any corporation, partnership, other business
organization or any division thereof or any assets, securities or
property, or otherwise purchase, lease, license or otherwise enter
into a transaction, in each case that would prohibit or delay
beyond the End Date the consummation of the transactions
contemplated hereby (including the Acquisition);
(iii) declare, set aside or
pay any dividend or make any other distribution payable in cash,
stock, property or any combination thereof in respect of any Equity
Securities, other than (A) the declaration and payment by AbbVie of
quarterly cash dividends on the outstanding AbbVie Shares in an
amount per quarter not to exceed $1.07 per outstanding AbbVie Share (as such
amount may be increased in a manner consistent with past practice
by AbbVie) with the timing of the declaration, record and payment
dates in any given quarter materially consistent with the timing of
the declaration, record and payment dates for the comparable
quarter in the prior fiscal year, and (B) dividends or
distributions by a Subsidiary of AbbVie to AbbVie or a wholly owned
Subsidiary of AbbVie;
(iv) split, combine or
reclassify any of its capital stock, except for any such
transaction by a wholly owned Subsidiary of AbbVie which remains a
wholly owned Subsidiary after consummation of such transaction;
or
(v) agree, commit or propose
to do the foregoing.
Section 5.3 Non-Solicitation.
(a) No Solicitation or Negotiation. Subject to any actions which
Allergan is required to take so as to comply with the requirements
of the Takeover Rules, from the date of this Agreement until the
earlier of Effective Time and the valid termination of this
Agreement pursuant to and in accordance with Article 9, except
as otherwise set forth in this Section 5.3, Allergan shall
not, and it shall cause its Subsidiaries and its and their
respective directors, officers and employees not to, and it shall
use reasonable best efforts to cause its and its Subsidiaries'
other Representatives not to, directly or indirectly:
(i) solicit, initiate or take
any action to knowingly facilitate or knowingly encourage
(including by way of furnishing information to any Person in
connection with) the submission of any Allergan Alternative
Proposal or any indication, proposal or inquiry that would
reasonably be expected to lead to an Allergan Alternative
Proposal;
(ii) enter into or
participate in any discussions or negotiations with, furnish any
information relating to Allergan or any of its Subsidiaries to, or
afford access to the business, properties, assets, books or records
of Allergan or any of its Subsidiaries to, otherwise cooperate in
any way with, or knowingly assist, participate in, knowingly
facilitate or knowingly encourage any effort by, any Third Party
that would reasonably be expected to seek to make, or has made, an
Allergan Alternative Proposal (except to notify such Person as to
the existence of the provisions of this Section 5.3);
(iii) (A) withdraw or
qualify, amend or modify in any manner adverse to AbbVie, the
Scheme Recommendation or the recommendation contemplated by
Section 3.6(c), if applicable, (B) fail to include the Scheme
Recommendation in the Scheme Document or the Proxy Statement, (C)
recommend, adopt or approve or publicly propose to recommend, adopt
or approve any Allergan Alternative Proposal or (D) fail to
reaffirm the Scheme Recommendation in a statement complying with
Rule 14e-2(a) under the Exchange Act with regard to an Allergan
Alternative Proposal or in connection with such action by the close
of business on the 10th Business Day after the commencement of such
Allergan Alternative Proposal under Rule 14e-2(a) (any of the
foregoing in this clause (iii), an "Allergan Change of
Recommendation");
(iv) take any action to make
any "moratorium", "control share acquisition", "fair price",
"supermajority", "affiliate transactions" or "business combination
statute or regulation" or other similar anti-takeover laws and
regulations under applicable Law inapplicable to any Third Party or
any Allergan Alternative Proposal; or
(v) enter into any agreement
in principle, letter of intent, term sheet, merger agreement,
acquisition agreement, option agreement or other agreement
providing for or relating to an Allergan Alternative Proposal
(other than an Allergan Alternative Proposal NDA).
Nothing contained herein shall prevent the Allergan Board from
(x) complying with Rule 14e-2(a) under the Exchange Act with regard
to an Allergan Alternative Proposal, so long as any action taken or
statement made to so comply is consistent with this Section
5.3(a) or (y) making any required disclosure to the Allergan
Shareholders if the Allergan Board determines in good faith, after
consultation with outside legal counsel, that the failure to take
such action would reasonably be expected to be inconsistent with
applicable Law; provided that any Allergan Change of
Recommendation involving or relating to an Allergan Alternative
Proposal may only be made in accordance with the provisions of
Section 5.3(b), Section 5.3(c), Section 5.3(d) and
Section 5.3(e). For clarity, a "stop, look and listen"
disclosure or similar communication of the type contemplated by
Rule 14d-9(f) under the Exchange Act shall not constitute an
Allergan Change of Recommendation.
Additionally, Allergan shall, and shall cause its Subsidiaries
and its and their respective directors, officers and employees to,
and shall use reasonable best efforts to cause its and its
Subsidiaries' other Representatives to, cease immediately and cause
to be terminated any and all existing activities, discussions or
negotiations, if any, with any Third Party conducted prior to the
date of this Agreement with respect to any Allergan Alternative
Proposal or with respect to any indication, proposal or inquiry
that could reasonably be expected to lead to an Allergan
Alternative Proposal. Allergan will promptly (and in each case
within 72 hours from the date of this Agreement) request from each
Person (and such Person's Representatives) that has executed a
confidentiality agreement during the last eighteen months in
connection with its consideration of making an Allergan Alternative
Proposal to return or destroy (as provided in the terms of such
confidentiality agreement) all confidential information concerning
Allergan or any of its Subsidiaries and shall promptly (and in each
case within 72 hours from the date of this Agreement) terminate all
physical and electronic data access previously granted to each such
Person.
(b) Responding to Allergan Alternative Proposals.
Notwithstanding Section 5.3(a), if at any time prior to the receipt
of the Allergan Shareholder Approval (the "Allergan Approval Time")
(and in no event after the Allergan Approval Time), the
Allergan Board receives a written Allergan Alternative Proposal
made after the date hereof which has not resulted from a breach in
any material respect of this Section 5.3, the Allergan Board,
directly or indirectly through its Representatives, may (i)
contact the Third Party that has made such Allergan Alternative
Proposal in order to ascertain facts or clarify terms for the sole
purpose of the Allergan Board informing itself about such Allergan
Alternative Proposal and such Third Party, and (ii) (x) engage in
negotiations or discussions with any such Third Party that has made
such an unsolicited written Allergan Alternative Proposal, (y)
furnish to such Third Party and its Representatives and financing
sources nonpublic information relating to Allergan or any of its
Subsidiaries pursuant to a confidentiality agreement with terms no
less favorable in the aggregate to Allergan than those contained in
the Confidentiality Agreement, a copy of which shall be provided,
promptly after its execution, to AbbVie for informational purposes
(such confidentiality agreement, the "Allergan Alternative
Proposal NDA"); provided that all such non-public
information (to the extent that such information has not been
previously provided or made available to AbbVie) is provided or
made available to AbbVie, as the case may be, substantially
concurrently with the time it is provided or made available to such
Third Party; provided, further, that prior to and as a condition of
taking any actions described in this clause (ii), the Allergan
Board determines in good faith, after consultation with a financial
advisor of nationally recognized reputation and outside legal
counsel, that such Allergan Alternative Proposal either constitutes
or could reasonably be expected to lead to an Allergan Superior
Proposal.
(c) Notice. Allergan shall notify AbbVie promptly (but in
any event within 48 hours) if any Allergan Alternative Proposal or
any indication, proposal or inquiry by a Third Party that would
reasonably be expected to make an Allergan Alternative Proposal, is
received by Allergan. Each such notice shall be provided in
writing and shall identify the Third Party making, and, to the
extent applicable, the material terms and conditions (including
price) of, any such Allergan Alternative Proposal, indication,
proposal or inquiry. Following such initial notice, Allergan
shall keep AbbVie reasonably informed, on a reasonably current
basis, of any material changes in the status and details of any
such Allergan Alternative Proposal, indication, proposal or inquiry
and shall promptly (but in no event later than 24 hours after
receipt) provide to AbbVie copies of all material correspondence
and written materials sent or provided by or to Allergan or any of
its Subsidiaries (or any of its or their respective
Representatives) that describes any terms or conditions of any
Allergan Alternative Proposal. Neither Allergan nor any of its
Subsidiaries will enter into any agreement with any Person which
prohibits Allergan from providing any information to AbbVie in
accordance with, or otherwise complying with, this Section 5.3.
(d) Fiduciary Exception to Allergan Change of
Recommendation Provision. Notwithstanding anything to the
contrary in this Agreement, but subject to Section 5.3(e), prior to
the Allergan Approval Time (and in no event after the Allergan
Approval Time), the Allergan Board may (A) make an Allergan Change
of Recommendation, or (B) terminate this Agreement in accordance
with Section 9.1(a)(ii)(B) in order to substantially
concurrently enter into a definitive agreement providing for an
Allergan Superior Proposal if (x) in the case of such an action
taken in connection with an Allergan Alternative Proposal, the
Allergan Alternative Proposal has not been withdrawn and the
Allergan Board determines in good faith, after consultation with
outside legal counsel and a financial advisor of nationally
recognized reputation, that such Allergan Alternative Proposal
constitutes an Allergan Superior Proposal, or (y) in the case of an
Allergan Change of Recommendation contemplated by clause (A) above
involving or relating to an Allergan Intervening Event (and not
involving any Allergan Alternative Proposal), the Allergan Board
determines in good faith, after consultation with outside legal
counsel and a financial advisor of nationally recognized
reputation, that the failure to take such action would reasonably
be expected to be inconsistent with its directors' fiduciary duties
under applicable Law.
(e) Last Look. The Allergan Board and Allergan, as
applicable, shall not take any of the actions contemplated by
Section 5.3(d) unless prior to taking such action (i) Allergan
has notified AbbVie, in writing at least three Business Days before
taking such action, that Allergan intends to take such action,
which notice attaches, in the case of an Allergan Change of
Recommendation pursuant to Section 5.3(d)(A) in response to an
Allergan Superior Proposal or the termination of this Agreement
pursuant to Section 5.3(d)(B) and Section 9.1(a)(ii)(B), the
most current version of each proposed Contract providing for or
related to such Allergan Superior Proposal (including any Contract
relating to financing or expense reimbursement) and the identity of
the Third Party(ies) making the Allergan Superior Proposal or, in
the case of an Allergan Intervening Event, a reasonably detailed
description of the facts relating to such Allergan Intervening
Event, (ii) if requested by AbbVie, during such three Business Day
period, Allergan and its Representatives shall have discussed and
negotiated in good faith with AbbVie (to the extent that AbbVie
desires to so discuss or negotiate) regarding any proposal by
AbbVie to amend the terms of this Agreement in response to such
Allergan Superior Proposal or other potential Allergan Change of
Recommendation and (iii) after such three Business Day period, the
Allergan Board determines in good faith, after consultation with a
financial advisor of nationally recognized reputation and outside
legal counsel and taking into account any proposal by AbbVie to
amend the terms of this Agreement, that in the case of any such
action in connection with an Allergan Alternative Proposal, such
Allergan Alternative Proposal continues to constitute an Allergan
Superior Proposal (it being understood and agreed that in the event
of any amendment to the financial terms or other material terms of
any such Allergan Superior Proposal, a new written notification
from Allergan consistent with that described in clause (i) of this
Section 5.3(e) shall be required, and a new notice period
under clause (i) of this Section 5.3(e) shall commence, during
which notice period Allergan shall be required to comply with the
requirements of this Section 5.3(e) anew, except that such new
notice period shall be for two Business Days (as opposed to three
Business Days)). After delivery of such written notice
pursuant to this Section 5.3(e), Allergan shall promptly
inform AbbVie of all material developments affecting the material
terms of any such Allergan Superior Proposal and shall promptly
provide AbbVie with copies of any additional written materials
received or sent that are material to such Allergan Superior
Proposal.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Section 6.1 Allergan Representations and
Warranties. (A) Subject to Section 10.8 and except
as disclosed (i) in any publicly available Allergan SEC Document
filed prior to the date hereof or (ii) in the disclosure schedule
delivered by Allergan to AbbVie immediately prior to the execution
of this Agreement (the "Allergan Disclosure Schedule"), Allergan
represents and warrants to AbbVie as follows:
(a) Qualification, Organization, Subsidiaries, etc.
Allergan is duly incorporated and validly existing under the Laws
of Ireland. Allergan has all requisite corporate power and
authority required to own or lease all of its properties or assets
and to carry on its business as now conducted. Allergan is
duly qualified to do business and is in good standing in each
jurisdiction where such qualification is necessary, except for
those jurisdictions where failure to be so qualified or in good
standing has not had and would not reasonably be expected to have,
individually or in the aggregate, an Allergan Material Adverse
Effect. Prior to the date of this Agreement, Allergan has
made available to AbbVie true and complete copies of the Memorandum
and Articles of Association of Allergan (the "Allergan
Memorandum and Articles of Association").
(b) Subsidiaries.
(i) Each Subsidiary of
Allergan is a corporation or other entity duly incorporated or
organized, validly existing and in good standing (except to the
extent such concept is not applicable under applicable Law of such
Subsidiary's jurisdiction of incorporation or organization, as
applicable) under the Laws of its jurisdiction of incorporation or
organization and has all corporate or other organizational powers
and authority, as applicable, required to own, lease and operate
its properties and assets and to carry on its business as now
conducted, except for those jurisdictions where failure to be so
organized, validly existing and in good standing or to have such
power has not had and would not reasonably be expected to have,
individually or in the aggregate, an Allergan Material Adverse
Effect. Each such Subsidiary is duly qualified to do business
and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where
failure to be so qualified or in good standing has not had and
would not reasonably be expected to have, individually or in the
aggregate, an Allergan Material Adverse Effect.
(ii) All of the outstanding
Equity Securities of each Subsidiary of Allergan have been validly
issued and are fully paid and nonassessable (except to the extent
such concepts are not applicable under applicable Law of such
Subsidiary's jurisdiction of incorporation or organization, as
applicable) and are owned by Allergan or one of its wholly-owned
Subsidiaries, directly or indirectly, free and clear of any Lien
(other than any restrictions imposed by applicable Law) and free of
preemptive rights, rights of first refusal, subscription rights or
similar rights of any Person and transfer restrictions (other than
transfer restrictions under applicable Law or under the
organizational documents of such Subsidiary).
Except for the Equity Securities of its Subsidiaries, Allergan does
not own, directly or indirectly, any capital stock or other Equity
Securities of any Person.
(c) Capitalization.
(i) The authorized capital of
Allergan consists of 1,000,000,000 Allergan Shares, 10,000,000
Allergan Preferred Shares and 40,000 deferred ordinary shares of
€1.00 each. As of June 21, 2019
(the "Allergan Capitalization Date"), there were outstanding
(A) (x) 327,823,649 Allergan Shares (excluding any Allergan
Restricted Stock Awards), (y) no Allergan Preferred Shares, and (z)
no deferred ordinary shares of €1.00 each, (B) Allergan Options to
purchase an aggregate of 6,342,839 Allergan Shares,
(C) 2,861,395 Allergan Shares were subject to outstanding
Allergan RSU Awards (other than Allergan PSU Awards), (D) no
Allergan Shares were subject to outstanding Allergan Restricted
Stock Awards, (E) 482,892 Allergan Shares were subject to
outstanding Allergan PSU Awards, determined assuming performance
was achieved at 130% of target, and (F) 19,799,855 additional
Allergan Shares were reserved for issuance pursuant to the Allergan
Share Plans. Except as set forth in this
Section 6.1(A)(c)(i) and for changes since the Allergan
Capitalization Date resulting from (x) the exercise or vesting and
settlement of Allergan Equity Awards outstanding on such date (in
accordance with their existing terms in effect as of the date
hereof) or issued on or after such date to the extent permitted by
Section 5.1 or (y) the issuance of Equity Securities of
Allergan on or after the date hereof to the extent permitted by
Section 5.1, there are no issued, reserved for issuance or
outstanding Equity Securities of Allergan.
(ii) All outstanding Equity
Securities of Allergan have been, and all Equity Securities that
may be issued pursuant to any employee stock option or other
compensation plan or arrangement will be, when issued in accordance
with the respective terms thereof, duly authorized and validly
issued, fully paid and nonassessable and free of preemptive
rights. No Subsidiary of Allergan owns any Equity Securities
of Allergan. There are no outstanding bonds, debentures,
notes or other indebtedness of Allergan having the right to vote
(or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which stockholders of Allergan
have the right to vote. As of the date of this Agreement,
there are no outstanding obligations of Allergan or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Equity
Securities of Allergan or its Subsidiaries. Neither Allergan
nor any of its Subsidiaries is a party to any agreement with
respect to the voting of any Equity Securities of Allergan.
(iii) As of the date hereof,
Allergan has made available to AbbVie a true and complete list, as
of the Allergan Capitalization Date, of all outstanding Allergan
Equity Awards, including, the date of grant, the type of the award,
the vesting schedule, whether subject to performance conditions,
the number of Allergan Shares subject to such type of award (based
on the aggregate number of shares granted on the grant date and
vesting on the applicable vesting date), and, for Allergan Options,
the applicable exercise price. As of the Allergan
Capitalization Date, the aggregate amount of any accrued but unpaid
dividend equivalent rights relating to outstanding Allergan Equity
Awards was $3,131,885.66.
(d) Corporate Authority Relative to this Agreement; No
Violation.
(i) Allergan has all
requisite corporate power and authority to enter into this
Agreement and the Expenses Reimbursement Agreement and, subject to
receipt of the Allergan Shareholder Approval, to consummate the
transactions contemplated hereby and thereby, including the
Acquisition. The execution and delivery of this Agreement and
the Expenses Reimbursement Agreement and the consummation of the
transactions contemplated hereby (including the Acquisition) and
thereby have been duly and validly authorized by the Allergan Board
and, except for (A) the Allergan Shareholder Approval and (B) the
filing of the required documents and other actions in connection
with the Scheme with, and to receipt of the required approval of
the Scheme by, the High Court, and the filing of the Court Order
with the Registrar of Companies, no other corporate proceedings on
the part of Allergan are necessary to authorize the consummation of
the transactions contemplated hereby (including the Acquisition)
and pursuant to the Expenses Reimbursement Agreement. On or
prior to the date hereof, the Allergan Board has determined that
the transactions contemplated by this Agreement are fair to and in
the best interests of Allergan and the Allergan Shareholders and
adopted a resolution to make, subject to Section 5.3 and
to the obligations of the Allergan Board under the Takeover Rules,
the Scheme Recommendation and the recommendation contemplated by
Section 3.6(c). This Agreement has been duly and validly
executed and delivered by Allergan and, assuming this Agreement
constitutes the valid and binding agreement of the AbbVie Parties,
constitutes the valid and binding agreement of Allergan,
enforceable against Allergan in accordance with its terms, subject
to (x) applicable bankruptcy, insolvency, examinership,
reorganization, moratorium or other similar Laws, now or hereafter
in effect, relating to creditors' rights generally and (y) general
equitable principles, whether considered in a proceeding at law or
equity (together, (x) and (y), "Equitable Exceptions").
(ii) The execution, delivery
and performance by Allergan of this Agreement and the Expenses
Reimbursement Agreement and the consummation by Allergan of the
transactions contemplated hereby (including the Acquisition) and
thereby require no action by or in respect of, Clearances of, or
Filings with, any Governmental Entity other than (A) compliance
with the provisions of the Act, (B) compliance with the Takeover
Panel Act and the Takeover Rules, (C) compliance with any
applicable requirements of the HSR Act, (D) compliance with and
Filings under any Antitrust Laws of any non-U.S. jurisdictions, (E)
compliance with any applicable requirements of the Securities Act,
the Exchange Act and any other applicable U.S. state or federal
securities laws or pursuant to the rules of the NYSE, and (F) any
other actions, Clearances or Filings the absence of which has not
had and would not reasonably be expected to have, individually or
in the aggregate, an Allergan Material Adverse Effect.
(iii) The execution, delivery
and performance by Allergan of this Agreement and the Expenses
Reimbursement Agreement and the consummation of the transactions
contemplated hereby (including the Acquisition) and thereby do not
and will not (A) contravene, conflict with, or result in any
violation or breach of any provision of the Organizational
Documents of Allergan, (B) assuming compliance with the matters
referred to in Section 6.1(A)(d)(ii) and receipt of the
Allergan Shareholder Approval, contravene, conflict with or result
in any violation or breach of any provision of any applicable Law,
(C) assuming compliance with the matters referred to in
Section 6.1(A)(d)(ii) and receipt of the Allergan Shareholder
Approval, require any Clearance or other action by any Person
under, constitute a default, or an event that, with or without
notice or lapse of time or both, would constitute a default, under,
or cause or permit the termination, cancellation, acceleration or
other change of any right or obligation or the loss of any benefit
to which Allergan or any of its Subsidiaries is entitled under, any
provision of any Allergan Permit or any Contract binding upon
Allergan or any of its Subsidiaries or any Clearance (including
Clearances required by Contract) affecting, or relating in any way
to, the assets or business of Allergan and its Subsidiaries, or (D)
result in the creation or imposition of any Lien on any asset of
Allergan or any of its Subsidiaries, except, in the case of each of
clauses (B) through (D), as has not had and would not reasonably be
expected to have, individually or in the aggregate, an Allergan
Material Adverse Effect.
(e) Reports.
(i) Allergan has timely filed
with or furnished to the SEC all reports, schedules, forms,
statements, prospectuses, registration statements and other
documents required to be filed with or furnished to the SEC by
Allergan since January 1, 2017
(collectively, together with any exhibits and schedules thereto and
other information incorporated therein, the "Allergan SEC
Documents"). No Subsidiary of Allergan is required to
file any report, schedule, form, statement, prospectus,
registration statement or other document with the SEC.
(ii) As of its filing date
(or, if amended or superseded by a filing prior to the date of this
Agreement, on the date of such amended or superseding filing), the
Allergan SEC Documents filed or furnished prior to the date of this
Agreement complied, and each Allergan SEC Document filed or
furnished subsequent to the date of this Agreement (assuming, in
the case of the Proxy Statement, that the representation and
warranty set forth in Section 6.2(j)is true and correct) will
comply, in all material respects with the applicable requirements
of NYSE, the Securities Act, the Exchange Act and the
Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), as
the case may be.
(iii) As of its filing date
(or, if amended or superseded by a filing prior to the date of this
Agreement, on the date of such amended or superseding filing), each
Allergan SEC Document filed or furnished prior to the date of this
Agreement did not, and each Allergan SEC Document filed or
furnished subsequent to the date of this Agreement (assuming, in
the case of the Proxy Statement, that the representation and
warranty set forth Section 6.2(j) is true and correct) will not,
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading.
(iv) Allergan is, and since
January 1, 2017 has been, in
compliance in all material respects with (A) the applicable
provisions of the Sarbanes-Oxley Act and (B) the applicable listing
and corporate governance rules and regulations of NYSE.
(v) Allergan and its
Subsidiaries have established and maintain disclosure controls and
procedures (as defined in Rule 13a-15 under the Exchange
Act). Such disclosure controls and procedures are designed to
ensure that material information relating to Allergan, including
its consolidated Subsidiaries, is made known to Allergan's
principal executive officer and its principal financial officer by
others within those entities, including during the periods in which
the periodic reports required under the Exchange Act are being
prepared. Except as have not been and would not reasonably be
expected to be, individually or in the aggregate, material to the
Allergan Group, taken as a whole, such disclosure controls and
procedures are effective in timely alerting Allergan's principal
executive officer and principal financial officer to material
information required to be included in Allergan's periodic and
current reports required under the Exchange Act. For purposes
of this Agreement, "principal executive officer" and
"principal financial officer" shall have the meanings given
to such terms in the Sarbanes-Oxley Act.
(vi) Allergan and its
Subsidiaries have established and maintain a system of internal
controls over financial reporting (as defined in Rule 13a-15 under
the Exchange Act) ("internal controls") designed to provide
reasonable assurance regarding the reliability of Allergan's
financial reporting and the preparation of Allergan's financial
statements for external purposes in accordance with GAAP.
Allergan's principal executive officer and principal financial
officer have disclosed, based on their most recent evaluation of
such internal controls prior to the date of this Agreement, to
Allergan's auditors and the audit committee of the Allergan Board
(A) all significant deficiencies and material weaknesses in the
design or operation of internal controls which are reasonably
likely to adversely affect Allergan's ability to record, process,
summarize and report financial information and (B) any fraud,
whether or not material, that involves management or other
employees who have a significant role in internal
controls.
(vii) Since January 1, 2017, each of the principal executive
officer and principal financial officer of Allergan (or each former
principal executive officer and principal financial officer of
Allergan, as applicable) has made all certifications required by
Rules 13a-14 and 15d-14 under the Exchange Act and
Sections 302 and 906 of the Sarbanes-Oxley Act and any related
rules and regulations promulgated by the SEC and NYSE, and the
statements contained in any such certifications are true and
complete in all material respects as of the date on which they were
made.
(f) Financial Statements.
(i) The audited consolidated
financial statements and unaudited consolidated interim financial
statements of Allergan included or incorporated by reference in the
Allergan SEC Documents present fairly in all material respects, in
conformity with GAAP applied on a consistent basis during the
periods presented (except as may be indicated in the notes
thereto), the consolidated financial position of Allergan and its
Subsidiaries as of the dates thereof and their consolidated results
of operations and cash flows for the periods then ended (subject to
normal and recurring year-end audit adjustments in the case of any
unaudited interim financial statements). Such consolidated
financial statements have been prepared in all material respects
from the books and records of Allergan and its Subsidiaries.
(ii) Since January 1, 2017 until the date hereof, Allergan
has not received written notice from the SEC or any other
Governmental Entity indicating that any of its accounting policies
or practices are or may be the subject of any review, inquiry,
investigation or challenge by the SEC or any other Governmental
Entity.
(g) No Undisclosed Liabilities. There are no
liabilities or obligations of Allergan or any of its Subsidiaries
of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, that would be required by
GAAP to be reflected on the consolidated balance sheet of Allergan
and its Subsidiaries, other than (i) liabilities or obligations
disclosed and provided for in Allergan's consolidated balance sheet
(or the notes thereto) as of March 31,
2019 (the "Allergan Balance Sheet"), (ii) liabilities
or obligations incurred in the ordinary course of business
consistent with past practice since the date of the Allergan
Balance Sheet, (iii) liabilities arising in connection with the
transactions contemplated hereby, and (iv) other liabilities or
obligations that have not had and would not reasonably be expected
to have, individually or in the aggregate, an Allergan Material
Adverse Effect. There are no off-balance sheet arrangements
of any type pursuant to any off-balance sheet arrangement required
to be disclosed pursuant to Item 303(a)(4) of Regulation S-K
promulgated under the Securities Act that have not been so
described in the Allergan SEC Documents.
(h) Compliance with Law; Permits.
(i) Allergan and each of its
Subsidiaries are, and since January 1,
2017 have been, in compliance with all applicable Laws,
except for failures to be in compliance as have not been and would
not reasonably be expected to be, individually or in the aggregate,
material to the Allergan Group, taken as a whole.
(ii) Except as has not been
and would not reasonably be expected to be, individually or in the
aggregate, material to the Allergan Group, taken as a whole,
Allergan and each of its Subsidiaries hold all consents,
clearances, permits, approvals, permissions, licenses, variances,
exemptions, authorizations, acknowledgements, approvals and orders
of any Governmental Entity necessary for the operation of its
respective businesses, other than Allergan Regulatory Permits (the
"Allergan Permits"). Allergan and each of its
Subsidiaries are, and since January 1,
2017 have been, in compliance with the terms of the Allergan
Permits, except for failures to be in compliance as have not been
and would not reasonably be expected to be, individually or in the
aggregate, material to the Allergan Group, taken as a whole.
There is no Action pending, or, to the knowledge of Allergan,
threatened, that seeks or would reasonably be expected to result in
(nor is there, to the knowledge of Allergan, any existing
condition, situation or set of circumstances that would reasonably
be expected to result in) the revocation, cancellation,
termination, non-renewal or adverse modification of any Allergan
Permit, except where such revocation, cancellation, termination,
non-renewal or adverse modification has not been and would not
reasonably be expected to be, individually or in the aggregate,
material to the Allergan Group, taken as a whole.
(i) Environmental Laws and Regulations. Except as has
not had and would not reasonably be expected to have, individually
or in the aggregate, an Allergan Material Adverse Effect:
(i) no notice, notification,
demand, request for information, citation, summons or order has
been received, no complaint has been filed, no penalty has been
assessed, and no claim, action, suit, proceeding or investigation
(including a review) is pending or, to the knowledge of Allergan,
threatened by any Governmental Entity or other Person relating to
Allergan or any of its Subsidiaries that relates to, or arises
under, any Environmental Law, Environmental Permit or Hazardous
Substance;
(ii) Allergan and its
Subsidiaries are, and since January 1,
2017 have been, in compliance with all Environmental Laws
and all Environmental Permits and hold all applicable Environmental
Permits; and
(iii) to Allergan's
knowledge, as of the date hereof, there is no existing condition,
situation or set of circumstances that could reasonably be expected
to result in AbbVie or any of its Subsidiaries incurring any
liability or obligation pursuant to any applicable Environmental
Laws.
(j) Employee Benefit Plans.
(i) Section 6.1(A)(j)(i) of the Allergan Disclosure
Schedule sets forth a true and complete list as of the date of this
Agreement of each material Allergan Benefit Plan.
(ii) Except with respect to
an Allergan Benefit Plan listed on Section 6.1(A)(j)(i) of the
Allergan Disclosure Schedule, neither Allergan nor any of its
Subsidiaries nor any of their respective ERISA Affiliates sponsors,
maintains or contributes to (or has any obligation to contribute
to), or has any current or contingent liability or obligation under
or with respect to any multiemployer plan, as defined in
Section 3(37) of ERISA, any plan that is or was subject to
Section 412 or 430 of the Code or Section 302 or Title IV
of ERISA (each, a "Title IV Plan"), or any post-employment
or post-retirement medical, dental, disability, hospitalization,
life or similar welfare benefits (whether insured or self-insured)
to any director, officer, employee or individual independent
contractor (including any former director, officer, employee or
individual independent contractor) of Allergan or any of its
Subsidiaries or any of their respective survivors, dependents or
beneficiaries or any other Person (other than coverage mandated by
applicable Law for which the covered Person pays the full cost of
coverage). Except as specifically described in
Section 6.1(A)(j)(ii) of the Allergan Disclosure
Schedule, and except as has not had and would not reasonably be
expected to have, individually or in the aggregate, an Allergan
Material Adverse Effect with respect to each Title IV Plan: (A) no
reportable event (within the meaning of Section 4043 of ERISA)
has occurred within the last three years, or, to the knowledge of
Allergan, is expected to occur whether as a result of the
transactions contemplated by this Agreement or otherwise; (B) the
minimum funding standard under Section 430 of the Code has
been satisfied and no waiver of any minimum funding standard or
extension of any amortization periods has been requested or
granted; (C) all contributions required under Section 302 of
ERISA and Section 412 of the Code have been timely made; (D)
all amounts due to the Pension Benefit Guaranty Corporation
("PBGC") pursuant to Section 4007 of ERISA have been
timely paid; (E) with respect to each Title IV Plan for which there
has been a significant reduction in the rate of future benefit
accrual as referred to in Section 204(h) of ERISA, the
requirements of Section 204(h) of ERISA have been complied
with; (F) no liability under Title IV of ERISA has been incurred by
Allergan, its Subsidiaries or any ERISA Affiliate that has not been
satisfied in full; (G) there has been no event described in
Section 4062(e) of ERISA, and the transactions contemplated by
this Agreement will not result in any event described in
Section 4062(e) of ERISA; (H) to the knowledge of Allergan, no
event has occurred or circumstances exist that could result in a
liability under or with respect to Section 4069 of ERISA; and
(I) no notice of intent to terminate any Title IV Plan has been
filed and no amendment to treat a Title IV Plan as terminated has
been adopted and no proceeding has been commenced by the PBGC to
terminate any Title IV Plan.
(iii) Except as has not had
and would not reasonably be expected to have, individually or in
the aggregate, an Allergan Material Adverse Effect, each Allergan
Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has received a current favorable
determination from the Internal Revenue Service or may rely upon a
current opinion or advisory letter from the Internal Revenue
Service and, no circumstances exist that would reasonably be
expected to result in any such letter being revoked or not being
reissued.
(iv) Except as has not had
and would not reasonably be expected to have, individually or in
the aggregate, an Allergan Material Adverse Effect: (A) each
Allergan Benefit Plan has been established, maintained, funded, and
administered in accordance with its terms and in compliance with
all applicable Laws, including ERISA and the Code; (B) no Action
(other than routine claims for benefits) is pending or, to
Allergan's knowledge, is threatened against, with respect to any
Allergan Benefit Plan; (C) there has been no "prohibited
transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA and no breach of fiduciary duty (as
determined under ERISA) has occurred with respect to any Allergan
Benefit Plan; (D) all contributions (including all employer
contributions and employee salary reduction contributions),
distributions, reimbursements and premium payments that are due
have been timely made in accordance with the terms of the Allergan
Benefit Plan and the requirements of applicable Law; (E) all
Allergan Benefit Plans that are required to be funded are fully
funded, and amounts have been accrued for any unfunded Allergan
Benefit Plans to the extent required under applicable international
accounting standards; (F) no events have occurred with respect to
any Allergan Benefit Plan that would reasonably be expected to
result in the assessment of any excise Taxes or penalties against
Allergan or any of its Subsidiaries; and (G) neither Allergan nor
any of its Subsidiaries has incurred (whether or not assessed), or
is reasonably expected to incur or to be subject to, any Tax or
other penalty with respect to the reporting requirements under
Sections 6055 and 6056 of the Code, as applicable, or under
Section 4980B, 4980D or 4980H of the Code.
(v) With respect to each
Covered Individual, neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated
hereby could (either alone or together with any other event),
directly or indirectly: (A) result in any payment or benefit
(including any bonus, retention, severance, retirement or job
security payment or benefit or otherwise) or (B) accelerate the
time of payment or vesting or trigger any payment or obligation to
fund (through a grantor trust or otherwise) or otherwise set aside
assets to secure to any extent any compensation or benefits under,
or increase the amount payable or trigger any other obligation
under, any Allergan Benefit Plan or otherwise.
(vi) Neither the execution
and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in any amount paid or
payable by Allergan or any of its Subsidiaries that could,
individually or with any other such payment, be classified as an
"excess parachute payment" within the meaning of Section 280G
of the Code not deductible by Allergan or any of its Subsidiaries
under Section 280G of the Code or result in any excise Tax on
any Covered Individual under Section 4999 of the Code.
Neither Allergan nor any of its Subsidiaries has any obligation to
gross-up, indemnify or otherwise reimburse any Person for any Tax
incurred by such Person, including under Section 409A or 4999
of the Code.
(vii) Each Allergan Benefit
Plan that constitutes a "nonqualified deferred compensation plan"
(within the meaning of Section 409A of the Code) has been
operated and maintained, in form and operation, in all material
respects in accordance with all applicable requirements of
Section 409A of the Code and all applicable guidance of the
Department of Treasury and Internal Revenue Service. No amount
under any Allergan Benefit Plan is subject to the interest and
additional tax set forth under Section 409A(a)(1)(B) of the
Code.
(k) Absence of Certain Changes or Events.
(i) From the date of the
Allergan Balance Sheet through the date hereof, the business of
Allergan and its Subsidiaries has been conducted in all material
respects in the ordinary course of business consistent with past
practice.
(ii) Since the date of the
Allergan Balance Sheet until the date hereof, there has not been
any event, effect, development, occurrence or change that has had,
or would reasonably be expected to have, individually or in the
aggregate, an Allergan Material Adverse Effect.
(l) Investigations; Litigation. As of the date
hereof, there is no Action pending or, to the knowledge of
Allergan, threatened against or affecting Allergan, any of its
Subsidiaries, any present or former officers, directors or
employees of Allergan or any of its Subsidiaries in their
respective capacities as such, or any of the respective properties
or assets of Allergan or any of its Subsidiaries, before (or, in
the case of threatened Actions, that would be before) any
Governmental Entity (i) that has been or would reasonably be
expected to be, individually or in the aggregate, material to the
Allergan Group, taken as a whole or (ii) that would in any manner
challenge or seek to prevent, enjoin or alter any of the other
transactions contemplated hereby. As of the date hereof,
there is no Order outstanding or, to the knowledge of Allergan,
threatened against or affecting Allergan, any of its Subsidiaries,
any present or former officers, directors or employees of Allergan
or any of its Subsidiaries in their respective capacities as such,
or any of the respective properties or assets of any of Allergan or
any of its Subsidiaries, that has been or would reasonably be
expected to be, individually or in the aggregate, material to the
Allergan Group, taken as a whole or that would prevent, enjoin or
materially delay any of the other transactions contemplated
hereby.
(m) Information Supplied. The information relating to
Allergan and its Subsidiaries to be contained in the Scheme
Document, the Proxy Statement and any other documents filed or
furnished with or to the High Court, the SEC or pursuant to the Act
and the Takeover Rules in each case in connection with the
Acquisition will not, on the date the Scheme Document and the Proxy
Statement (and any amendment or supplement thereto) is first
proposed to Allergan Shareholders and at the time of the Court
Meeting, contain any untrue statement of any material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, at the time and
in light of the circumstances under which they were made, not false
or misleading. The Proxy Statement and any related documents
will comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations
promulgated thereunder. The parts of the Scheme Document and
any related documents for which the Allergan Directors are
responsible under the Takeover Rules and any related filings for
which the Allergan Directors are responsible under the Takeover
Rules will comply in all material respects as to form with the
requirements of the Takeover Rules and the Act.
Notwithstanding the foregoing provisions of this
Section 6.1(A)(m), no representation or warranty is made by
Allergan with respect to information or statements made or
incorporated by reference in the Scheme Document or the Proxy
Statement which were not supplied by or on behalf of Allergan.
(n) Regulatory Matters.
(i) Except for such failures
to hold, be valid and in full force and effect or be in compliance
with (as applicable) as have not been, and would not reasonably be
expected to be, individually or in the aggregate, material to the
Allergan Group, taken as a whole, (A) each of Allergan and its
Subsidiaries holds all Allergan Regulatory Permits; (B) all
Allergan Regulatory Permits are valid and in full force and effect;
and (C) since January 1, 2017,
Allergan and its Subsidiaries have been in compliance with the
terms of all Allergan Regulatory Permits. As of the date
hereof, there is no Action pending, or, to the knowledge of
Allergan, threatened that seeks, or, to the knowledge of Allergan,
any existing condition, situation or set of circumstances that
would reasonably be expected to result in, the revocation,
cancellation, termination, non-renewal or adverse modification of
any Allergan Regulatory Permit, except where such revocation,
cancellation, termination, non-renewal or adverse modification has
not been, and would not reasonably be expected to be, individually
or in the aggregate, material to the Allergan Group, taken as a
whole.
(ii) Neither Allergan nor any
of its Subsidiaries are party to any material corporate integrity
agreements, monitoring agreements, deferred prosecution agreements,
consent decrees, settlement orders, corrective action plans, or
similar agreements, obligations, or Orders with or imposed by any
Governmental Entity.
(iii) All pre-clinical and
clinical investigations in respect of an Allergan Product conducted
or sponsored by Allergan or any of its Subsidiaries are currently
being, and since January 1, 2017
until the date hereof have been, conducted in compliance with all
applicable Laws administered, issued or enforced by the applicable
Allergan Regulatory Agencies, including (A) FDA standards for the
design, conduct, performance, monitoring, auditing, recording,
analysis and reporting of clinical trials contained in Title 21
parts 50, 54, 56, 312, 314 and 320 of the Code of Federal
Regulations, and (B) any applicable international, federal, state
and provincial applicable Laws restricting the collection, use and
disclosure of individually identifiable health information and
personal information, except, in each case, for such noncompliance
that has not been, and would not reasonably be expected to be,
individually or in the aggregate, material to the Allergan Group,
taken as a whole.
(iv) Except as has not been,
and would not reasonably be expected to be, individually or in the
aggregate, material to the Allergan Group, since January 1, 2017 until the date hereof, neither
Allergan nor any of its Subsidiaries has received any written
notice from the FDA or any other Allergan Regulatory Agency which
would reasonably be expected to lead to the denial, limitation,
revocation, or rescission of any of Allergan Regulatory Permits or
of any application for marketing approval currently pending before
the FDA or such other Allergan Regulatory Agency.
(v) Since January 1, 2017 until the date hereof, all
reports, documents, claims, permits, notices, and other Filings
required to be filed, maintained or furnished to the FDA or any
other Allergan Regulatory Agency by Allergan or any of its
Subsidiaries have been so filed, maintained or furnished in
accordance with the applicable requirements related thereto, except
where failure to file, maintain or furnish such reports, documents,
claims, permits, notices, or Filings has not been, and would not
reasonably be expected to be, individually or in the aggregate,
material to the Allergan Group, taken as a whole. All such
reports, documents, claims, permits, notices, and Filings were true
and complete in all material respects on the date filed (or were
corrected in or supplemented by a subsequent Filing). Since
January 1, 2017, neither Allergan nor
any of its Subsidiaries, nor, to the knowledge of Allergan, any
officer, employee, agent or distributor of Allergan or any of its
Subsidiaries, has made an untrue statement of a material fact or a
fraudulent statement to the FDA or any other Allergan Regulatory
Agency, failed to disclose a material fact required to be disclosed
to the FDA or any other Allergan Regulatory Agency, or committed an
act, made a statement, or failed to make a statement, in each such
case, related to the business of Allergan or any of its
Subsidiaries, that, at the time such disclosure was made, would
reasonably be expected to provide a basis for the FDA to invoke its
policy respecting "Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities", set forth in 56 Fed. Reg. 46191
(September 10, 1991) or for any other
Allergan Regulatory Agency to invoke any similar policy, except for
any act or statement or failure to make a statement that has not
been, and would not reasonably be expected to be, individually or
in the aggregate, material to the Allergan Group, taken as a
whole.
(vi) Except as would not
reasonably be expected to be, individually or in the aggregate,
material to the Allergan Group, taken as a whole, since
January 1, 2017, neither Allergan nor
any of its Subsidiaries, nor any officer, director, "managing
employee" (as such term is defined in 42 C.F.R § 1001.2), employee,
or, to the knowledge of Allergan, agent or distributor of Allergan
or any of its Subsidiaries: (A) has been debarred or convicted of
any crime or engaged in any conduct for which debarment is mandated
by 21 U.S.C. § 335a(a) or any similar applicable Law or authorized
by 21 U.S.C. § 335a(b) or any similar applicable Law applicable in
other jurisdictions in which material quantities of any of the
Allergan Products are sold or intended by Allergan to be sold; or
(B) has been excluded from participation in any Governmental
Healthcare Program or convicted of any crime or engaged in any
conduct for which such Person could be excluded from participating
in any Governmental Healthcare Program under Section 1128 of
the Social Security Act of 1935, as amended, or any similar
applicable Law or program.
(vii) Except as has not been,
and would not reasonably be expected to be, individually or in the
aggregate, material to the Allergan Group, taken as a whole, each
Allergan Product is being or since January
1, 2017 has been developed, manufactured, stored,
distributed and marketed in compliance with all applicable Laws
administered, issued, or enforced by the applicable Allergan
Regulatory Agencies, including those relating to investigational
use, marketing approval, current good manufacturing practices,
packaging, labeling, advertising, record keeping, reporting, and
security. There is no Action pending or, to the knowledge of
Allergan, threatened, including any prosecution, injunction,
seizure, civil fine, debarment, suspension or recall, in each case
alleging any violation applicable to any Allergan Product by
Allergan or any of its Subsidiaries of any applicable Allergan
Regulatory Law, except as has not been, and would not reasonably be
expected to be, individually or in the aggregate, material to the
Allergan Group, taken as a whole.
(viii) Since January 1, 2017 until the date hereof, neither
Allergan nor any of its Subsidiaries have voluntarily or
involuntarily initiated, conducted or issued, or caused to be
initiated, conducted or issued, any material recall, field
corrections, market withdrawal or replacement, safety alert,
warning, "dear doctor" letter, investigator notice, or other notice
or action to wholesalers, distributors, retailers, healthcare
professionals or patients relating to an alleged lack of safety,
efficacy or regulatory compliance of any Allergan Product, other
than notices or actions that are not, individually or in the
aggregate, material to Allergan and its Subsidiaries, taken as a
whole. To the knowledge of Allergan, there are no facts as of
the date hereof with respect to any applicable Law of any
applicable Allergan Regulatory Agencies which are reasonably likely
to cause, and neither Allergan nor any of its Subsidiaries has
received any written notice from the FDA or any other Allergan
Regulatory Agency since January 1,
2017 until the date hereof regarding, (i) the recall, market
withdrawal or replacement of any Allergan Product sold or intended
to be sold by Allergan or its Subsidiaries (other than recalls,
withdrawals or replacements that are not material to Allergan or
its Subsidiaries, taken as a whole), (ii) a material change in the
marketing classification or a material change in the labeling of
any such Allergan Products, (iii) a termination or suspension of
the manufacturing, marketing, or distribution of such Allergan
Products, or (iv) a material negative change in reimbursement
status of an Allergan Product.
(ix) Since January 1, 2017, Allergan and its Subsidiaries
have been in compliance in all material respects with all
applicable Healthcare Laws. Allergan and its Subsidiaries maintain
a compliance program having the elements of an effective corporate
compliance and ethics program identified in U.S.S.G. § 8B2.1 in all
material respects. There are no outstanding compliance complaints
or reports, ongoing internal compliance investigations, or
outstanding compliance corrective actions, except where such
complaints, reports, investigations, or corrective actions have not
been, and would not reasonably be expected to be, individually or
in the aggregate, material to the Allergan Group, taken as a
whole.
(o) Tax Matters.
(i) Except as has not had and
would not reasonably be expected to have, individually or in the
aggregate, an Allergan Material Adverse Effect: (A) all Tax Returns
that are required to be filed by or with respect to Allergan or any
of its Subsidiaries have been timely filed (taking into account any
extension of time within which to file), and all such Tax Returns
are true, correct and complete; (B) Allergan and its Subsidiaries
have, within the time and manner prescribed by applicable Law, paid
all Taxes required to be paid by any of them, including any Taxes
required to be withheld from amounts owing to any employee,
creditor, or third party (in each case, whether or not shown on any
Tax Return), except with respect to matters being contested in good
faith through appropriate proceedings or for which adequate
reserves have been established in accordance with GAAP on the
financial statements of Allergan and its Subsidiaries; (C) all
Taxes due and payable by Allergan or any of its Subsidiaries have
been adequately provided for, in accordance with GAAP, in the
financial statements of Allergan and its Subsidiaries for all
periods ending on or before the date of such financial statements;
(D) during the last three years, no claim has been made in writing
by a Tax Authority in a jurisdiction where any of Allergan or its
Subsidiaries does not file Tax Returns that such Person is or may
be subject to taxation by that jurisdiction; (E) there are no liens
for Taxes upon any property or assets of Allergan or any of its
Subsidiaries, except for Permitted Liens; (F) no Tax Authority has
asserted, or threatened in writing to assert, a Tax liability in
connection with an audit or other administrative or court
proceeding involving Taxes of Allergan or any of its Subsidiaries;
and (G) neither Allergan or any of its Subsidiaries is a party to
any agreement or arrangement relating to the apportionment,
sharing, assignment or allocation of Taxes (other than (x) an
agreement or arrangement solely between or among Allergan and/or
one or more of its Subsidiaries or (y) customary Tax
indemnification provisions in ordinary course commercial agreements
that are not primarily related to Taxes), or has any liability for
Taxes of any Person (other than Allergan or any of its
Subsidiaries) under U.S. Treasury Regulation Section 1.1502-6
(or any similar provision of state, local or non-U.S. Law) or as a
transferee or successor.
(ii) None of Allergan or any
of its Subsidiaries is or has been a party to any "listed
transaction," as defined in section 6707A(c)(2) of the Code
and Treasury Regulation Section 1.6011-4(b), or any similar
provision of state, local or non-U.S. Law.
(iii) Since January 1, 2017 to the date hereof, neither
Allergan nor any of its Subsidiaries has constituted a
"distributing corporation" or a "controlled corporation" (within
the meaning of Section 355(a)(l)(A) of the Code) in a
distribution of stock intended to qualify for tax-free treatment
under Section 355 of the Code (or any similar provision of
state, local, or non-U.S. Law).
(iv) Allergan is, and at all
times since its formation has been, properly treated as a foreign
corporation for U.S. federal income Tax purposes.
(v) As used in this
Agreement, (A) the term "Tax" (including the plural
form "Taxes" and, with correlative meaning, the terms
"Taxable" and "Taxation") means any and all
taxes (including customs duties or fines), fees, levies, imposts,
duties or other similar assessments in the nature of a tax, imposed
by or payable to any federal, state, provincial, local or non-U.S.
Tax Authority, and includes all U.S. federal, state, local and non-
U.S. gross or net income, gain, profits, windfall profits,
franchise, gross receipts, estimated, capital, documentary,
transfer, ad valorem, premium, environmental, customs duty, capital
stock, severances, stamp, payroll, sales, employment, unemployment
compensation, social security, disability, use, property, unclaimed
property, withholding or backup withholding, excise, production,
value added and occupancy taxes, together with all interest,
penalties and additions imposed with respect thereto, (B) the term
"Tax Return" means all returns and reports (including
elections, declarations, disclosures, schedules, estimates, claims
for refunds and information returns) filed or required to be filed
with a Tax Authority relating to Taxes, including all attachments
thereto and any amendments or supplements thereof and (C) the term
"Tax Authority" means any Governmental Entity
responsible for the assessment, collection or enforcement of laws
relating to Taxes (including the United States Internal Revenue
Service (the "IRS") and the Irish Revenue Commissioners and
any similar state, local, or non-U.S. revenue agency).
(p) Labor Matters.
(i) No member of the Allergan
Group is a party to, or bound by, any collective bargaining
agreement, Contract or other agreement or binding understanding
with a labor union, labor organization, works council, or similar
employee representative. No member of the Allergan Group is
or, since January 1, 2017, has been
subject to a labor dispute, strike or work stoppage except as has
not had and would not reasonably be expected to have, individually
or in the aggregate, an Allergan Material Adverse Effect. To
the knowledge of Allergan, there are and, since January 1, 2017, there have been no
organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened
involving employees of the Allergan Group, except for those the
formation of which has not had and would not reasonably be expected
to have, individually or in the aggregate, an Allergan Material
Adverse Effect.
(ii) The transactions
contemplated by this Agreement will not require the consent of, or
advance notification to, any works councils, unions or similar
labor organizations with respect to any employees of the Allergan
Group, except for where the failure to obtain any such consent or
make any such advance notifications (A) has not had and would not
reasonably be expected to have, individually or in the aggregate,
an Allergan Material Adverse Effect or (B) would not materially
delay or frustrate the consummation of the transactions
contemplated hereby (including the Acquisition).
(q) Intellectual Property.
(i) Except as has not been,
and would not reasonably be expected to be, individually or in the
aggregate, material to the Allergan Group, taken as a whole: (1)
none of the registrations (including patents, trademarks and
copyrights, and material domain name registrations) and
applications for registration for Owned Intellectual Property or
for material Licensed Intellectual Property that is exclusively
licensed to Allergan or any of its Subsidiaries (the "Allergan
Registered IP") has lapsed, expired, or been abandoned, and (2)
no Allergan Registered IP or other Allergan Intellectual Property
has been adjudged invalid or unenforceable, and, to the knowledge
of Allergan, all Allergan Intellectual Property is subsisting, and
no Allergan Registered IP is invalid or unenforceable.
(ii) Except for such failures
of each of the following clauses (i) through (iii) to be true and
correct as have not been, and would not reasonably be expected to
be, individually or in the aggregate, material to the Allergan
Group, taken as a whole, (i) Allergan and its Subsidiaries are the
sole and exclusive owners of all right, title and interest in and
to the Owned Intellectual Property and hold all of their right,
title and interest in and to all of the Owned Intellectual Property
free and clear of all Liens (other than non-exclusive licenses
granted by Allergan or one of its Subsidiaries in the ordinary
course of business and other Permitted Liens), (ii) to the
knowledge of Allergan, the Owned Intellectual Property and the
Licensed Intellectual Property include all of the Intellectual
Property necessary to, or used or held for use in, the conduct of
the respective businesses of Allergan and its Subsidiaries as
currently conducted, and (iii) to the knowledge of Allergan, there
exist no material restrictions on the use of any of the Owned
Intellectual Property.
(iii) Except for such
failures of each of the following clauses (i) through (iii) to be
true and correct as have not been, and would not reasonably be
expected to be, individually or in the aggregate, material to the
Allergan Group taken as a whole, (i) to the knowledge of Allergan,
neither Allergan nor any of its Subsidiaries nor the conduct of
their respective businesses has infringed, misappropriated, diluted
or otherwise violated any Intellectual Property rights of any Third
Party, (ii) there is no claim, action, suit, investigation or
proceeding pending or, to the knowledge of Allergan, threatened
against or affecting Allergan or any of its Subsidiaries (A)
alleging that Allergan or any of its Subsidiaries has infringed,
misappropriated, diluted or otherwise violated any Intellectual
Property rights of any Third Party or (B) based upon, or
challenging or seeking to deny or restrict, the rights of Allergan
or any of its Subsidiaries in any of Allergan Intellectual Property
(including any challenges to the validity, enforceability,
registerability, ownership or use of any Allergan Intellectual
Property, other than in the ordinary course of applying for patents
or trademarks), and (iii) to the knowledge of Allergan, no Third
Party has infringed, misappropriated, diluted or otherwise violated
any Allergan Intellectual Property.
(iv) Except as has not had
and would not reasonably be expected to have, individually or in
the aggregate, an Allergan Material Adverse Effect, (i) Allergan
and its Subsidiaries have provided reasonable notice of their
privacy and personal data collection and use policies on their
websites and other customer and public communications and Allergan
and its Subsidiaries have complied with such policies and all
applicable Laws relating to (A) the privacy of the users of
Allergan's and its Subsidiaries' respective products, services and
websites and (B) the collection, use, storage, processing or
disclosure of any personally-identifiable information (including
personal health information) and other data or information
collected, processed or stored by or on behalf of Allergan or any
of its Subsidiaries, (ii) there is no claim, action, suit,
investigation or proceeding pending or, to the knowledge of
Allergan, threatened against Allergan or any of its Subsidiaries
alleging any violation of such policies or applicable Laws, (iii)
neither this Agreement nor the consummation of the transactions
contemplated hereby (including the Acquisition) will violate any
such policy or applicable Laws, and (iv) Allergan and its
Subsidiaries have taken reasonable steps consistent with normal
industry practice to protect the types of information referred to
in this Section 6.1(A)(q)(iv) against loss and
unauthorized access, use, modification, disclosure or other misuse,
and, to the knowledge of Allergan, there has been no unauthorized
access, use, modification, disclosure or other misuse of such data
or information.
(v) Except as has not had and
would not reasonably be expected to have, individually or in the
aggregate, an Allergan Material Adverse Effect, (i) Allergan's IT
Assets operate in accordance with their specifications and related
documentation and perform in a manner that permits Allergan and its
Subsidiaries to conduct their respective businesses as currently
conducted, (ii) Allergan and its Subsidiaries take commercially
reasonable actions, consistent with current industry standards, to
protect the confidentiality, integrity and security of Allergan's
IT Assets (and all data and other information and transactions
stored or contained therein or processed or transmitted thereby)
against any unauthorized use, access, interruption, modification or
corruption, including the implementation of commercially reasonable
data backup, disaster avoidance and recovery procedures and
business continuity procedures, and (iii) there has been no
unauthorized use or access or security breaches, or interruption,
modification, loss or corruption of any of Allergan's IT Assets (or
any data or other information or transactions stored or contained
therein or processed or transmitted thereby).
(r) Real Property. Except as has not had and would
not reasonably be expected to have, individually or in the
aggregate, an Allergan Material Adverse Effect, (i) Allergan and
each of its Subsidiaries has good, valid and marketable fee simple
title to, or valid leasehold interests in, as the case may be, each
parcel of real property of Allergan or any of its Subsidiaries,
free and clear of all Liens, except for Permitted Liens, (ii) each
lease, sublease or license (each, a "Lease") under which
Allergan or any of its Subsidiaries leases, subleases or licenses
any real property is, subject to the Equitable Exceptions, a valid
and binding obligation of Allergan or a Subsidiary of Allergan (as
the case may be) and, to the knowledge of Allergan, each of the
other parties thereto, and in full force and effect and enforceable
in accordance with its terms against Allergan or its Subsidiaries
(as the case may be) and, to the knowledge of Allergan, each of the
other parties thereto (except for such Leases that are terminated
after the date of this Agreement in accordance with their
respective terms, other than as a result of a default or breach by
Allergan or any of its Subsidiaries of any of the provisions
thereof), (iii) neither Allergan nor any of its Subsidiaries, nor,
to the knowledge of Allergan, any of the other parties thereto has
violated or committed or failed to perform any act which (with or
without notice, lapse of time or both) would constitute a default
under any provision of any Lease, and (iv) neither Allergan nor any
of its Subsidiaries has received written notice that it has
violated or defaulted under any Lease.
(s) Required Vote of Allergan Shareholders. The
Allergan Shareholder Approval is the only vote of holders of Equity
Securities of Allergan which is required to consummate the
transactions contemplated hereby.
(t) Material Contracts.
(i) Section 6.1(A)(t)(i) of the Allergan Disclosure
Schedule sets forth a list as of the date of this Agreement of each
of the following Contracts (other than any Allergan Benefit Plan)
to which Allergan or any of its Subsidiaries is a party or by which
it is bound (each such Contract required to be so listed, and each
of the following types of Contracts (other than any Allergan
Benefit Plan) described below to which Allergan or any of its
Subsidiaries becomes a party or by which it otherwise becomes bound
after the date of this Agreement, an "Allergan Material
Contract"):
(A) each (i) acquisition or
divestiture Contract (including any Contracts pursuant to which any
member of the Allergan Group has transferred or agreed to transfer
ownership of any Intellectual Property) and (ii) license (including
any in-license or out-license and any sublicense), collaboration
agreement or similar or equivalent Contract, that, in the case of
each of clauses (i) and (ii), (x) has a maximum potential value (or
which otherwise requires the receipt or making of payments) in
excess of $100 million (including
pursuant to any "earn-out," contingent value rights, milestone
payments, license fees, royalty payments, development costs or
other contingent payment or value obligations), (y) involves the
issuance of any Equity Securities of Allergan or any of its
Subsidiaries to a Third Party following the date of this Agreement
or (z) grants to any Person (other than any member of the Allergan
Group) any right of first refusal, right of first negotiation,
right of first offer, option to purchase, option to license, or any
other similar rights with respect to any Allergan Product or any
material Intellectual Property of Allergan;
(B) any Contract with any
Governmental Entity that is material to Allergan and its
Subsidiaries, taken as a whole, and involving or that would
reasonably be expected to involve payments to or from any
Governmental Entity in an amount having a maximum potential value
in excess of $100 million;
(C) any Contract that (x)
limits or purports to limit, in any material respect, the freedom
of Allergan or any of its Subsidiaries to engage or compete in any
line of business or with any Person or in any area or that would so
limit or purport to limit, in any material respect, the freedom of
AbbVie or any of its Affiliates to take such actions after the
Effective Time, (y) contains exclusivity or "most favored nation"
obligations or restrictions that restrict or purport to restrict
Allergan or any of its Subsidiaries in any material respect or that
would so limit or purport to limit AbbVie or any of its Affiliates
after the Effective Time, (z) contains any other provisions
materially restricting or purporting to materially restrict the
ability of Allergan or any of its Subsidiaries to sell, market,
distribute, promote, manufacture, develop, commercialize, test or
research any Allergan Products through third parties or that would
so limit or purport to limit AbbVie or any of its Affiliates after
the Effective Time;
(D) any Contract relating to
third party indebtedness for borrowed money in excess of
$100 million (whether incurred,
assumed, guaranteed or secured by any asset) of Allergan or any of
its Subsidiaries;
(E) any Contract restricting
Allergan or any of its Subsidiaries from (x) the payment of
dividends (y) the making of distributions to shareholders or (z)
the ability to repurchase or redeem Equity Securities;
(F) any joint venture,
profit-sharing, partnership, collaboration, co-promotion,
commercialization, research, development or other similar
agreement, which is material to the Allergan Group, taken as a
whole;
(G) any Contracts or other
transactions with any (A) executive officer or director of
Allergan, or (B) affiliate (as such term is defined in Rule
12b-2 promulgated under the Exchange
Act) or "associates" (or members of any of their "immediate
family") (as such terms are respectively defined in Rule
12b-2 and Rule 16a-1 of the Exchange
Act) of any such executive officer, director or beneficial
owner;
(H) any Contract involving
the settlement of any Action or threatened Action (or series of
related Actions) (A) which (x) will involve payments by Allergan or
any of its Subsidiaries after the date hereof, or involved such
payments, in excess of $100 million
or (y) will impose, or imposed, materially burdensome monitoring or
reporting obligations by Allergan or any of its Subsidiaries
outside the ordinary course of business or material restrictions on
Allergan or any Subsidiary of Allergan (or, following the
Completion, on AbbVie or any Subsidiary of AbbVie) or (B) which
impose material restrictions on the use of any material
Intellectual Property other than, in the case of this clause (B),
the granting of non-exclusive licenses or sublicenses or the
granting of exclusive licenses in connection with the settlement of
ANDA-related litigation in the ordinary course of business;
(I) any stockholders,
investors rights, registration rights or similar agreements or
arrangements with respect to the Equity Securities of Allergan or
any of its Subsidiaries; and
(J) any other Contract
required to be filed by Allergan pursuant to Item 601(b)(10) of
Regulation S-K.
(ii) All of the Allergan
Material Contracts are, subject to the Equitable Exceptions, (A)
valid and binding obligations of Allergan or a Subsidiary of
Allergan (as the case may be) and, to the knowledge of Allergan,
each of the other parties thereto, and (B) in full force and effect
and enforceable in accordance with their respective terms against
Allergan or its Subsidiaries (as the case may be) and, to the
knowledge of Allergan, each of the other parties thereto, in each
case of (A) and (B), except for such Allergan Material Contracts
that are terminated after the date of this Agreement in accordance
with their respective terms, other than as a result of a default or
breach by Allergan or any of its Subsidiaries of any of the
provisions thereof, and except where the failure to be valid and
binding obligations and in full force and effect and enforceable
has not had and would not reasonably be expected to have,
individually or in the aggregate, an Allergan Material Adverse
Effect. To the knowledge of Allergan, as of the date hereof,
no Person is seeking to terminate or challenging the validity or
enforceability of any Allergan Material Contract, except such
terminations or challenges which have not had and would not
reasonably be expected to have, individually or in the aggregate,
an Allergan Material Adverse Effect. Neither Allergan nor any
of its Subsidiaries, nor, as of the date hereof, to the knowledge
of Allergan, any of the other parties thereto has violated any
provision of, or committed or failed to perform any act which (with
or without notice, lapse of time or both) would constitute a
default under any provision of, and as of the date hereof neither
Allergan nor any of its Subsidiaries has received written notice
that it has violated or defaulted under, any Allergan Material
Contract, except for those violations and defaults (or potential
defaults) which have not had and would not reasonably be expected
to have, individually or in the aggregate, an Allergan Material
Adverse Effect. Allergan has made available to AbbVie true
and complete copies of each Allergan Material Contract as in effect
as of the date hereof.
(u) Insurance. Allergan and its Subsidiaries maintain
insurance coverage with reputable insurers in such amounts and
covering such risks as Allergan reasonably believes, based on past
experience, is adequate for the businesses and operations of
Allergan and its Subsidiaries (taking into account the cost and
availability of such insurance). Except as has not had and
would not reasonably be expected to have, individually or in the
aggregate, an Allergan Material Adverse Effect, (i) all insurance
policies and fidelity bonds for which Allergan or any of its
Subsidiaries is a policyholder or which cover the business,
operations, employees, officers, directors or assets of Allergan or
any of its Subsidiaries as of the date hereof (the "Allergan
Insurance Policies") (A) are sufficient for compliance by
Allergan and its Subsidiaries with all Allergan Material Contracts,
and (B) will not terminate or lapse by their terms by reason of the
consummation of the transactions contemplated hereby (including the
Acquisition) and (ii) the execution, delivery and performance of
this Agreement and the consummation of the transactions
contemplated hereby (including the Acquisition) do not and will not
constitute a default under, or cause or permit the termination,
cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which Allergan or any of
its Subsidiaries is entitled under, any provision of the Allergan
Insurance Policies.
(v) Opinion of Financial Advisor. The Allergan Board
has received the opinion of J.P. Morgan Securities LLC, financial
advisor to Allergan, to the effect that, as of the date of such
opinion and based upon and subject to the various assumptions,
limitations, qualifications and other matters set forth therein,
the Scheme Consideration to be paid to the Allergan Shareholders
pursuant to this Agreement is fair, from a financial point of view,
to such holders. A written copy of such opinion will be
delivered promptly to AbbVie after the date hereof for
informational purposes only.
(w) Finders or Brokers. Except for J.P. Morgan
Securities LLC, there is no investment banker, broker or finder who
might be entitled to any fee or commission from Allergan or any of
its Affiliates in connection with the transactions contemplated by
this Agreement.
(x) FCPA and Anti-Corruption.
(i) Except as has not been
and would not reasonably be expected to be, individually or in the
aggregate, material to the Allergan Group, taken as a whole,
neither Allergan nor any of its Subsidiaries, nor any director,
manager or employee of Allergan or any its Subsidiary has, since
January 1, 2014 in connection with
the business of Allergan or any of its Subsidiaries, itself or, to
the Allergan's knowledge, any of its agents, representatives, sales
intermediaries, or any other third party, in each case, acting on
behalf of Allergan or any Subsidiary of Allergan, taken any action
in violation of the FCPA or other applicable Bribery Legislation
(in each case to the extent applicable).
(ii) Neither Allergan nor any
of its Subsidiaries nor, to the knowledge of Allergan, any
director, manager or employee of Allergan or any Allergan
Subsidiary, are, or since January 1,
2014 have been, subject to any actual or pending or, to the
knowledge of Allergan, threatened civil, criminal, or
administrative actions, suits, demands, claims, hearings, notices
of violation, investigations, proceedings, demand letters,
settlements, or enforcement actions, or made any voluntary
disclosures to any Governmental Entity, involving Allergan or any
of its Subsidiaries in any way relating to applicable Bribery
Legislation, including the FCPA.
(iii) Allergan and each of
its Subsidiaries has made and kept books and records, accounts and
other records, which, in reasonable detail, accurately and fairly
reflect in all material respects the transactions and dispositions
of the assets of Allergan and each of its Subsidiaries as required
by the FCPA.
(iv) Allergan and each of its
Subsidiaries has instituted policies and procedures reasonably
designed to ensure compliance with the FCPA and other applicable
Bribery Legislation and maintain such policies and procedures in
force.
(v) To the knowledge of
Allergan, no officer, director, or employee of Allergan or any of
its Subsidiaries is a Government Official.
(vi) Except for such failures
of each of the following clauses (A) through (C) to be true and
correct as has not been and would not reasonably be expected to be,
individually or in the aggregate, material to the Allergan Group,
taken as a whole, none of Allergan or any of its Subsidiaries, nor
any of their respective directors, managers or employees (A) is a
Sanctioned Person, (B) has, since January 1,
2014, engaged in, has any plan or commitment to engage in,
direct or indirect dealings with any Sanctioned Person or in any
Sanctioned Country on behalf of Allergan or any of its Subsidiaries
in violation of applicable Sanctions Law or (C) has, since
January 1, 2014, violated, or engaged
in any conduct sanctionable under, any Sanctions Law, nor to the
knowledge of Allergan, been the subject of an investigation or
allegation of such a violation or sanctionable conduct.
(y) Takeover Statutes. No "fair price,"
"moratorium," "control share acquisition" or other similar
anti-takeover statute or regulation or any anti-takeover provision
in the Allergan Memorandum and Articles of Association is, or at
the Effective Time will be, applicable to AbbVie or any of its
respective Subsidiaries, the Acquisition or the Scheme.
(z) Transactions with Affiliates. To the knowledge of
Allergan and as of the date of this Agreement, since January 1, 2017, there have been no transactions,
or series of related transactions, agreements, arrangements or
understandings in effect, nor are there any currently proposed
transactions, or series of related transactions, agreements,
arrangements or understandings, that would be required to be
disclosed under Item 404 of Regulation S-K that have not been
otherwise disclosed in the Allergan SEC Documents filed prior to
the date hereof.
(aa) No Ownership of AbbVie Shares. Neither Allergan
nor any of its Subsidiaries beneficially owns, directly or
indirectly, any AbbVie Shares or other securities convertible into,
exchangeable for or exercisable for AbbVie Shares, and neither
Allergan nor any of its Subsidiaries has any rights to acquire any
AbbVie Shares (other than any such securities owned by Allergan or
any of its Subsidiaries in a fiduciary, representative or other
capacity on behalf of other Persons, whether or not held in a
separate account). There are no voting trusts or other
agreements or understandings to which Allergan or any of its
Subsidiaries is a party with respect to the voting of the capital
or capital stock or other Equity Securities of Allergan or any of
its Subsidiaries.
(B) No Other Representations. Except for the
representations and warranties made by Allergan in
Section 6.1(A) (as qualified by the applicable items
disclosed in the Allergan Disclosure Schedule in accordance with
Section 10.8 and the introduction to this Section 6.1),
neither Allergan nor any other Person makes or has made any
representation or warranty, expressed or implied, at law or in
equity, with respect to or on behalf of Allergan or its
Subsidiaries, their businesses, operations, assets, liabilities,
financial condition, results of operations, future operating or
financial results, estimates, projections, forecasts, plans or
prospects (including the reasonableness of the assumptions
underlying such estimates, projections, forecasts, plans or
prospects) or the accuracy or completeness of any information
regarding Allergan or its Subsidiaries or any other matter
furnished or provided to AbbVie or made available to AbbVie in any
"data rooms," "virtual data rooms," management presentations or in
any other form in expectation of, or in connection with, this
Agreement or the transactions contemplated hereby (including the
Acquisition). Allergan and its Subsidiaries disclaim any
other representations or warranties, whether made by Allergan or
any of its Subsidiaries or any of their respective Affiliates or
Representatives. AbbVie acknowledges and agrees that, except
for the representations and warranties made by Allergan in
Section 6.1(A) (as qualified by the applicable items disclosed
in the Allergan Disclosure Schedule in accordance with
Section 10.8 and the introduction to Section 6.1(A)),
neither Allergan nor any other Person is making or has made any
representations or warranty, expressed or implied, at law or in
equity, with respect to or on behalf of Allergan or its
Subsidiaries, their businesses, operations, assets, liabilities,
financial condition, results of operations, future operating or
financial results, estimates, projections, forecasts, plans or
prospects (including the reasonableness of the assumptions
underlying such estimates, projections, forecasts, plans or
prospects) or the accuracy or completeness of any information
regarding Allergan or its Subsidiaries or any other matter
furnished or provided to AbbVie or made available to AbbVie in any
"data rooms," "virtual data rooms," management presentations or in
any other form in expectation of, or in connection with, this
Agreement, or the transactions contemplated hereby or
thereby. AbbVie specifically disclaims that it is relying
upon or has relied upon any such other representations or
warranties that may have been made by any Person, and acknowledges
and agrees that Allergan and its Affiliates have specifically
disclaimed and do hereby specifically disclaim any such other
representations and warranties. Nothing in this Section 6.1(B)
shall be construed as a waiver (or an admission of non-reliance
with respect to) any claims based on fraud.
Section 6.2 AbbVie Representations and
Warranties. (A) Subject to Section 10.8 and except
as disclosed (i) in any publicly available AbbVie SEC Document
filed prior to the date hereof, or (ii) in the disclosure schedule
delivered by AbbVie to Allergan immediately prior to the execution
of this Agreement (the "AbbVie Disclosure Schedule"), each
of AbbVie and Acquirer Sub jointly and severally represent and
warrant to Allergan as follows:
(a) Qualification, Organization, Subsidiaries, etc.
Each AbbVie Party is a legal entity duly organized, validly
existing and in good standing under the laws of the of its
jurisdiction of organization. Each AbbVie Party has all
requisite corporate power and authority required to own or lease
all of its properties or assets and to carry on its business as now
conducted. Each AbbVie Party is duly qualified to do business
and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where
failure to be so qualified or in good standing has not had and
would not reasonably be expected to have, individually or in the
aggregate, an AbbVie Material Adverse Effect. Prior to the date of
this Agreement, AbbVie has made available to Allergan true and
complete copies of the Organizational Documents of each of AbbVie
and Acquirer Sub, in each case, as in effect on the date of this
Agreement.
(b) Capital Stock.
(i) The authorized capital stock
of AbbVie consists of 4,000,000,000 AbbVie Shares and 200,000,000
AbbVie Preferred Shares. As of June
21, 2019 (the "AbbVie Capitalization Date"), there
were outstanding (A) (x) 1,478,365,231 AbbVie Shares and (y) no
AbbVie Preferred Shares, (B) options to purchase AbbVie Shares
("AbbVie Options") with respect to an aggregate of 6,848,750
AbbVie Shares (of which, AbbVie Options with respect to 5,011,093
AbbVie Shares were exercisable), (C) 8,190,538 restricted stock
units ("AbbVie Restricted Stock Units"), (D) no restricted
stock awards ("AbbVie RSAs"), and (E) 2,400,713 performance based
awards ("AbbVie Performance Awards") (together with AbbVie
Options, AbbVie Restricted Stock Units, AbbVie RSAs and any other
equity or equity-linked awards granted after June 21, 2019, "AbbVie Equity
Awards"). The AbbVie Shares to be issued as part of the
Scheme Consideration have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will have
been validly issued and will be fully paid and nonassessable and
the issuance thereof will be free of preemptive rights.
Except as set forth in this Section 6.2(A)(b)(i) and for
changes since the AbbVie Capitalization Date resulting from the
exercise or vesting and settlement of AbbVie Equity Awards
outstanding on such date (in accordance with their existing terms
in effect as of the date hereof) or issued as set forth in
Section 6.2(A)(b)(i) of the AbbVie Disclosure Schedule, there
are no issued, reserved for issuance or outstanding Equity
Securities of AbbVie. There are no outstanding bonds,
debentures, notes or other indebtedness of AbbVie having the right
to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of
AbbVie have the right to vote. As of the date of this
Agreement, there are no outstanding obligations of AbbVie or any of
its Subsidiaries to repurchase, redeem or otherwise acquire any
Equity Securities of AbbVie or its Subsidiaries.
(ii) All of the issued and
outstanding Equity Securities of Acquirer Sub is, and at the
Effective Time will be, owned, directly or indirectly, by AbbVie,
and there are no other Equity Securities of Acquirer Sub.
Acquirer Sub has not held any assets, engaged in any activities or
conducted any business prior to the date of this Agreement and has
no, and prior to the Effective Time will have no, assets,
liabilities or obligations of any nature other than those incident
to its formation and pursuant to this Agreement and the Acquisition
and the other transactions contemplated by this Agreement.
(c) Corporate Authority Relative to this Agreement; No
Violation.
(i) Each of AbbVie and
Acquirer Sub has all requisite corporate power and authority to
enter into this Agreement and, with respect to AbbVie, the Expenses
Reimbursement Agreement and to consummate the transactions
contemplated hereby and thereby, including the Acquisition.
The execution and delivery of this Agreement and the Expenses
Reimbursement Agreement and the consummation of the transactions
contemplated hereby (including the Acquisition) and thereby have
been duly and validly authorized by the AbbVie Board and, except
for the filing of the required documents in connection with the
Scheme with, and to receipt of the required approval of the Scheme
by, the High Court, no other corporate proceedings on the part of
AbbVie or Acquirer Sub are necessary to authorize the consummation
of the transactions contemplated hereby (including the Acquisition)
and pursuant to the Expenses Reimbursement Agreement. This
Agreement has been duly and validly executed and delivered by
AbbVie and Acquirer Sub and, assuming this Agreement constitutes
the valid and binding agreement of Allergan, constitutes the valid
and binding agreement of AbbVie and Acquirer Sub, enforceable
against AbbVie and Acquirer Sub in accordance with its terms,
subject to the Equitable Exceptions.
(ii) The execution, delivery
and performance by AbbVie and Acquirer Sub of this Agreement and
the Expenses Reimbursement Agreement (in the case of AbbVie and the
consummation by AbbVie and Acquirer Sub of the transactions
contemplated hereby (including the Acquisition) and thereby require
no action by or in respect of, Clearances of, or Filings with, any
Governmental Entity other than (A) compliance with the provisions
of the Act, (B) compliance with the Takeover Panel Act and the
Takeover Rules, (C) compliance with any applicable requirements of
the HSR Act, (D) compliance with and Filings under any Antitrust
Laws of any non-U.S. jurisdictions, (E) compliance with any
applicable requirements of the Securities Act, the Exchange Act and
any other applicable U.S. state or federal securities laws or
pursuant to the rules of the NYSE, and (F) any other actions,
Clearances or Filings the absence of which has not had and would
not reasonably be expected to have, individually or in the
aggregate, an AbbVie Material Adverse Effect.
(iii) Assuming compliance
with the Scheme, the Act and any directions or orders of the High
Court, the execution, delivery and performance by AbbVie and
Acquirer Sub of this Agreement and the Expenses Reimbursement
Agreement (in the case of AbbVie) and the consummation of the
transactions contemplated hereby (including the Acquisition) and
thereby do not and will not (A) contravene, conflict with, or
result in any violation or breach of any provision of the
Organizational Documents of AbbVie or Acquirer Sub, (B) assuming
compliance with the matters referred to in
Section 6.2(A)(c)(ii), contravene, conflict with or result in
any violation or breach of any provision of any applicable Law, (C)
assuming compliance with the matters referred to in
Section 6.2(A)(c)(ii), require any Clearance or other action
by any Person under, constitute a default, or an event that, with
or without notice or lapse of time or both, would constitute a
default, under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss
of any benefit to which AbbVie or any of its Subsidiaries is
entitled under, any provision of any AbbVie Permit or any Contract
binding upon AbbVie or any of its Subsidiaries or any Clearance
(including Clearances required by Contract) affecting, or relating
in any way to, the assets or business of AbbVie and its
Subsidiaries, (D) result in the creation or imposition of any Lien
on any asset of AbbVie or any of its Subsidiaries, except, in the
case of each of clauses (B) through (D), as has not had and would
not reasonably be expected to have, individually or in the
aggregate, an AbbVie Material Adverse Effect.
(d) Reports.
(i) AbbVie has timely filed
with or furnished to the SEC all reports, schedules, forms,
statements, prospectuses, registration statements and other
documents required to be filed with or furnished to the SEC by
AbbVie since January 1, 2017
(collectively, together with any exhibits and schedules thereto and
other information incorporated therein, the "AbbVie SEC
Documents"). No Subsidiary of AbbVie is required to file
any report, schedule, form, statement, prospectus, registration
statement or other document with the SEC.
(ii) As of its filing date
(or, if amended or superseded by a filing prior to the date of this
Agreement, on the date of such amended or superseding filing), each
AbbVie SEC Document filed or furnished prior to the date of
this Agreement did not, and each AbbVie SEC Document filed or
furnished subsequent to the date of this Agreement will not,
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made,
not misleading.
(iii) AbbVie is, and since
January 1, 2017 has been, in
compliance in all material respects with (A) the applicable
provisions of the Sarbanes-Oxley Act and (B) the applicable listing
and corporate governance rules and regulations of NYSE.
(iv) AbbVie and its
Subsidiaries have established and maintain disclosure controls and
procedures (as defined in Rule 13a-15 under the Exchange
Act). Such disclosure controls and procedures are designed to
ensure that material information relating to AbbVie, including its
consolidated Subsidiaries, is made known to AbbVie's principal
executive officer and its principal financial officer by others
within those entities, including during the periods in which the
periodic reports required under the Exchange Act are being
prepared. Except as has not been and would not reasonably be
expected to be, individually or in the aggregate, material to the
AbbVie Group, taken as a whole, such disclosure controls and
procedures are effective in timely alerting AbbVie's principal
executive officer and principal financial officer to material
information required to be included in AbbVie's periodic and
current reports required under the Exchange Act.
(v) AbbVie and its
Subsidiaries have established and maintain a system of internal
controls designed to provide reasonable assurance regarding the
reliability of AbbVie's financial reporting and the preparation of
AbbVie's financial statements for external purposes in accordance
with GAAP. AbbVie's principal executive officer and principal
financial officer have disclosed, based on their most recent
evaluation of such internal controls prior to the date of this
Agreement, to AbbVie's auditors and the audit committee of the
AbbVie Board (A) all significant deficiencies and material
weaknesses in the design or operation of internal controls which
are reasonably likely to adversely affect AbbVie's ability to
record, process, summarize and report financial information and (B)
any fraud, whether or not material, that involves management or
other employees who have a significant role in internal
controls.
(e) No Undisclosed Liabilities. There are no
liabilities or obligations of AbbVie or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, that would be required by
GAAP to be reflected on the consolidated balance sheet of AbbVie
and its Subsidiaries, other than (i) liabilities or obligations
disclosed and provided for in AbbVie's consolidated balance sheet
(or the notes thereto) as of March 31,
2019 (the "AbbVie Balance Sheet"), (ii) liabilities
or obligations incurred in the ordinary course of business
consistent with past practice since the date of the AbbVie Balance
Sheet, (iii) liabilities arising in connection with the
transactions contemplated hereby, and (iv) other liabilities or
obligations that have not had and would not reasonably be expected
to have, individually or in the aggregate, an AbbVie Material
Adverse Effect. There are no off-balance sheet arrangements
of any type pursuant to any off-balance sheet arrangement required
to be disclosed pursuant to Item 303(a)(4) of Regulation S-K
promulgated under the Securities Act that have not been so
described in the AbbVie SEC Documents.
(f) Financial Statements. The audited consolidated
financial statements and unaudited condensed consolidated interim
financial statements of AbbVie included or incorporated by
reference in the AbbVie SEC Documents present fairly in all
material respects, in conformity with GAAP applied on a consistent
basis during the periods presented (except as may be indicated in
the notes thereto), the consolidated financial position of AbbVie
and its Subsidiaries as of the dates thereof and their consolidated
results of operations and cash flows for the periods then ended
(subject to normal and recurring year-end audit adjustments in the
case of any unaudited interim financial statements). Such
consolidated financial statements have been prepared in all
material respects from the books and records of AbbVie and its
Subsidiaries.
(g) Compliance with Law; Permits. AbbVie and each of
its Subsidiaries are, and since January 1,
2017 have been, in compliance with all applicable Laws,
except for failures to comply that have not had and would not
reasonably be expected to have, individually or in the aggregate,
an AbbVie Material Adverse Effect.
(h) Absence of Certain Changes or Events. From
March 31, 2019 through the date
hereof, there has not been any event, effect, development,
occurrence or change that has had, or would reasonably be expected
to have, individually or in the aggregate, an AbbVie Material
Adverse Effect.
(i) Investigations; Litigation. As of the date
hereof, there is no Action pending or, to the knowledge of AbbVie,
threatened against or affecting AbbVie, any of its Subsidiaries,
any present or former officers, directors or employees of AbbVie or
any of its Subsidiaries in their respective capacities as such, or
any of the respective properties or assets of AbbVie or any of its
Subsidiaries, before (or, in the case of threatened Actions, that
would be before) any Governmental Entity (i) that has been or would
reasonably be expected to have, individually or in the aggregate,
an AbbVie Material Adverse Effect or (ii) that would in any manner
challenge or seek to prevent, enjoin or alter any of the other
transactions contemplated hereby. As of the date hereof,
there is no Order outstanding or, to the knowledge of AbbVie,
threatened against or affecting AbbVie, any of its Subsidiaries,
any present or former officers, directors or employees of AbbVie or
any of its Subsidiaries in their respective capacities as such, or
any of the respective properties or assets of any of AbbVie or any
of its Subsidiaries, that has been or would reasonably be expected
to have, individually or in the aggregate, an AbbVie Material
Adverse Effect.
(j) Information Supplied. The information provided by
and relating to AbbVie and its Subsidiaries to be contained in the
Scheme Document, the Proxy Statement and any other documents filed
or furnished with or to the High Court, the SEC or pursuant to the
Act and the Takeover Rules in each case in connection with the
Acquisition will not, on the date the Scheme Document and the Proxy
Statement (and any amendment or supplement thereto) is first
proposed to Allergan Shareholders and at the time of the Court
Meeting, contain any untrue statement of any material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, at the time and
in light of the circumstances under which they were made, not false
or misleading.
(k) Opinion of Financial Advisor. The AbbVie Board has
received the opinion of Morgan Stanley & Co. LLC, financial
advisor to AbbVie, to the effect that, as of the date of such
opinion and based upon and subject to the various assumptions,
limitations, qualifications and other matters set forth therein,
the Scheme Consideration to be paid to the Allergan Shareholders
pursuant to this Agreement is fair, from a financial point of view,
to AbbVie.
(l) Financing. At the Effective Time, AbbVie and
Acquirer Sub will have sufficient cash, available lines of credit
or other sources of immediately available and cleared funds to
enable AbbVie and Acquirer Sub to make all required payments
payable at the Effective Time in connection with the transactions
contemplated under this Agreement, including the payment of
expenses and fees. Notwithstanding anything contained in this
Agreement to the contrary, the obligations of the AbbVie Parties
under this Agreement, including their obligations to consummate the
Completion, are not conditioned in any manner upon the AbbVie
Parties obtaining the Financing or any other financing.
(B) No Other Representations. Except for the
representations and warranties made by AbbVie in
Section 6.2(A) (as qualified by the applicable items
disclosed in the AbbVie Disclosure Schedule in accordance with
Section 10.8 and the introduction to Section 6.2(A)),
neither AbbVie nor any other Person makes or has made any
representation or warranty, expressed or implied, at law or in
equity, with respect to or on behalf of AbbVie or its Subsidiaries,
their businesses, operations, assets, liabilities, financial
condition, results of operations, future operating or financial
results, estimates, projections, forecasts, plans or prospects
(including the reasonableness of the assumptions underlying such
estimates, projections, forecasts, plans or prospects) or the
accuracy or completeness of any information regarding AbbVie or its
Subsidiaries or any other matter furnished or provided to Allergan
or made available to Allergan in any "data rooms," "virtual data
rooms," management presentations or in any other form in
expectation of, or in connection with, this Agreement or the
transactions contemplated hereby (including the Acquisition).
AbbVie and its Subsidiaries disclaim any other representations or
warranties, whether made by AbbVie or any of its Subsidiaries or
any of their respective Affiliates or Representatives.
Allergan acknowledges and agrees that, except for the
representations and warranties made by AbbVie in
Section 6.2(A) (as qualified by the applicable items disclosed
in the AbbVie Disclosure Schedule in accordance with
Section 10.8 and the introduction to Section 6.2(A)),
neither AbbVie nor any other Person is making or has made any
representations or warranty, expressed or implied, at law or in
equity, with respect to or on behalf of AbbVie or its Subsidiaries,
their businesses, operations, assets, liabilities, financial
condition, results of operations, future operating or financial
results, estimates, projections, forecasts, plans or prospects
(including the reasonableness of the assumptions underlying such
estimates, projections, forecasts, plans or prospects) or the
accuracy or completeness of any information regarding AbbVie or its
Subsidiaries or any other matter furnished or provided to Allergan
or made available to Allergan in any "data rooms," "virtual data
rooms," management presentations or in any other form in
expectation of, or in connection with, this Agreement, or the
transactions contemplated hereby or thereby. Allergan
specifically disclaims that it is relying upon or has relied upon
any such other representations or warranties that may have been
made by any Person, and acknowledges and agrees that AbbVie and its
Affiliates have specifically disclaimed and do hereby specifically
disclaim any such other representations and warranties. Nothing in
this Section 6.2(B) shall be construed as a waiver (or an
admission of non-reliance with respect to) any claims based on
fraud.
ARTICLE 7
ADDITIONAL AGREEMENTS
Section 7.1 Access to Information;
Confidentiality; Notices of Certain Events.
(a) Upon reasonable notice, Allergan shall, and shall cause
its Subsidiaries to, afford to AbbVie, its Subsidiaries and its and
their respective Representatives and Financing Sources, reasonable
access during normal business hours, during the period from the
date of this Agreement to the earlier of Completion and the date,
if any, on which the Agreement is validly terminated pursuant to
and in accordance with Article 9, to (i) its and its
Subsidiaries' properties, contracts, commitments and books and
records and (ii) all other information not made available pursuant
to clause (i) of this Section 7.1(a) concerning its and
its Subsidiaries' businesses, properties and personnel as AbbVie
may reasonably request (in the case of each of clause (i) and (ii),
in a manner so as to not unreasonably interfere with the normal
business operations of Allergan or any of its Subsidiaries).
During such period described in the immediately preceding sentence,
upon reasonable notice and subject to applicable Law and during
normal business hours, Allergan shall instruct its pertinent
Representatives to reasonably cooperate with AbbVie in its review
of any such information provided or made available pursuant to the
immediately preceding sentence. No information or knowledge
obtained in any review or investigation pursuant to this
Section 7.1 shall affect or be deemed to modify any
representation or warranty made by Allergan pursuant to this
Agreement.
(b) Without limiting the generality of Section 7.1(a),
during the period from the date of this Agreement to the earlier of
the Completion and the date, if any, on which the Agreement is
validly terminated pursuant to and in accordance with
Article 9, Allergan agrees to, and to cause its Subsidiaries
to, (i) reasonably assist and reasonably cooperate with AbbVie and
its Subsidiaries to facilitate the post-Completion integration of
Allergan and its Subsidiaries with AbbVie and its Subsidiaries
(including, at the request of AbbVie from time to time, reasonably
assisting and cooperating with AbbVie and its Subsidiaries in the
planning and development of a post-Completion integration plan),
and (ii) provide reasonable access to key personnel identified by
AbbVie to facilitate AbbVie's efforts with respect to the
post-Completion retention of such key personnel.
(c) Notwithstanding anything to the contrary in this
Section 7.1 or Section 7.2, neither Allergan nor any
of its respective Subsidiaries shall be required to provide access
to, disclose information to or assist or cooperate with AbbVie, in
each case if and to the extent such access, disclosure, assistance
or cooperation (i) would, as reasonably determined based on the
advice of outside counsel, jeopardize any attorney-client privilege
with respect to such information, or (ii) would contravene any
applicable Law or Contract to which Allergan or any of its
Subsidiaries is subject or bound; provided that Allergan
shall, and shall cause its Subsidiaries to, use reasonable best
efforts to make appropriate substitute disclosure arrangements
under circumstances in which such restrictions apply (including
redacting such information (A) to remove references concerning
valuation of Allergan and its Subsidiaries, taken as a whole, (B)
as necessary to comply with any Contract in effect on the date
hereof or after the date hereof or with applicable Law and (C) as
necessary to address reasonable attorney-client, work-product or
other privilege or confidentiality concerns, or entering into a
joint defense or other arrangement) and to provide such information
as to the applicable matter as can be conveyed. Each of
Allergan and AbbVie may, as each deems advisable and necessary,
reasonably designate any competitively sensitive material provided
to the other under this Section 7.1 or Section 7.2 as
"Outside Counsel Only Material." Such materials and the
information contained therein shall be given only to the outside
counsel of the recipient and, subject to any additional
confidentiality or joint defense agreement the parties may mutually
propose and enter into, will not be disclosed by such outside
counsel to employees, officers or directors of the recipient unless
express permission is obtained in advance from the source of the
materials (Allergan or AbbVie, as the case may be) or its legal
counsel.
(d) Each Party shall promptly notify and provide copies to the
other Party of the occurrence of any event which would or would
reasonably be expected to (A) prevent or materially delay the
consummation of the Scheme, the Acquisition or the other
transactions contemplated hereby or (B) result in the failure of
any Condition; provided, that the delivery of any notice pursuant
to this Section 7.1(d) shall not in and of itself (i)
affect or be deemed to modify any representation, warranty,
covenant, right, remedy, or condition to any obligation of
any Party hereunder or (ii) update any section of Allergan
Disclosure Schedule or AbbVie Disclosure Schedule. A failure
of either Party to provide information pursuant to this
Section 7.1(d) shall not constitute a breach for purposes of
any Condition.
(e) To the extent permitted by applicable Law and without
limiting Allergan's obligations pursuant to any other provision of
this Agreement, with respect to the Actions set forth on
Section 7.1(e) of the Allergan Disclosure Schedule,
Allergan shall (i) keep AbbVie reasonably informed (on a timely
basis) regarding any material developments with respect to such
Actions following the date hereof and provide such additional
information with respect to such Actions as AbbVie may reasonably
request and (ii) consult and cooperate with AbbVie, and consider in
good faith AbbVie's views, as to the strategy, defense and
settlement discussions with respect to such Actions. Allergan and
AbbVie will operate under this Section 7.1(e) pursuant to a
common interest agreement, whereby any information shared pursuant
to the foregoing sentence remains subject to the protection of the
attorney-client privilege, attorney work product doctrine, common
interest privilege, joint defense privilege and any and all other
applicable rights, privileges, protections or immunities.
(f) Until the earlier of Completion and the date, if any,
on which the Agreement is validly terminated pursuant to and in
accordance with Article 9, Allergan shall, to the extent
permitted by applicable Law, (i) promptly provide AbbVie with a
copy of all material written correspondence received after the date
hereof from the FDA or any similar Governmental Entity concerning
any Allergan Product set forth on Section 7.1(f) of the
Allergan Disclosure Schedule regarding the (i) withdrawal,
suspension, termination, placement on inactive status (including
any clinical hold) or revocation of any approval for such Allergan
Product, (ii) prohibition or suspension of the supply of such
Allergan Product, or (iii) new or expanded investigation, review or
inquiry concerning the safety of such Allergan Product.
(g) The Parties hereby agree that all information provided to
them or their respective Representatives pursuant to this Agreement
shall be subject to the Confidentiality Agreement.
Section 7.2 Consents and Regulatory
Approvals.
(a) The terms of the Acquisition at the date of publication
of the Scheme Document shall be set out in the Rule 2.5
Announcement and the Scheme Document, to the extent required by
applicable Law.
(b) Subject to the terms and conditions of this Agreement,
including Section 7.2(c), each Party shall, and each shall cause
its Subsidiaries to, use their respective 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, to the extent
permitted by applicable Law, to achieve satisfaction of the
Conditions and to consummate the Acquisition and the other
transactions contemplated hereby as promptly as reasonably
practicable (and, in each case, no later than the End Date),
including using reasonable best efforts to (x) prepare and file as
promptly as reasonably practicable with any Governmental Entity or
other third party all documentation to effect all Filings (and
thereafter make any other required or appropriate submissions) as
are necessary, proper or advisable to consummate the Acquisition
and the other transactions contemplated hereby, including Allergan
and AbbVie each making (A) as promptly as reasonably practicable,
but in no event later than 30 days after the date hereof (unless
the Parties mutually agree otherwise), an appropriate Filing of a
notification and report form pursuant to the HSR Act with the
Federal Trade Commission and the Antitrust Division of the United
States Department of Justice with respect to the Acquisition and
the other transactions contemplated hereby and requesting early
termination of the waiting period under the HSR Act and (B) as
promptly as reasonably practicable, any other Filing that is
required and advisable under any other Antitrust Law or foreign
investment Law, including making all required Filings under the
Antitrust Laws in the jurisdictions listed on Section
7.2(b) of the Allergan Disclosure Schedule, (y) obtain prior
to the End Date, and thereafter maintain, all Clearances required
to be obtained from any Governmental Entity that are necessary and
advisable to consummate the Acquisition or other transactions
contemplated hereby, and complying with the terms and conditions of
each Clearance (including by supplying as promptly as reasonably
practicable any additional information and documentary material
that may be requested pursuant to the HSR Act or other applicable
Antitrust Law or foreign investment Law), and (z) cooperate with
the other Parties in their efforts to comply with their obligations
under this Agreement, including in seeking to obtain any required
Clearances, including defending (but without any obligation to
commence) any Action commenced by any Governmental Entity in
connection with the transactions contemplated hereby. In
parallel with informal engagement with the European Commission
prior to submission of a formal filing for Clearance of the
Acquisition under the EC Merger Regulation ("Pre-Notification"),
AbbVie shall also promptly engage with the relevant United Kingdom
Governmental Entity (the "CMA"), including by submitting a briefing
paper (which may be a copy of the first draft filing to the
European Commission during Pre-Notification) regarding the
Acquisition to the CMA within five (5) Business Days of submission
of a first draft filing to the European Commission during
Pre-Notification, and by responding promptly and with due
consideration to all requests for information from, or for meetings
with, the CMA.
(c) Notwithstanding Section 7.2(b) or anything else in
this Agreement to the contrary, nothing in this Agreement or
otherwise shall obligate or otherwise require AbbVie, Acquirer Sub
or any of their respective Subsidiaries to propose, agree to,
commit to or effect any action (or refrain or cause to refrain from
taking any action) (including, in each case, any divestiture, hold
separate arrangement, licensing of rights, and/or termination,
assignment, novation or modification of Contracts (or portions
thereof) or other business relationships), restriction, commitment,
condition, contingency, contribution, cost, expense, liability,
limitation, loss, obligation, payment, requirement or term, with
respect to any asset, operation, division, business, product line
or business relationship of AbbVie, Allergan or any of their
respective Subsidiaries, in each case as a condition to, or in
connection with, (i) the expiration or termination of any
applicable waiting period relating to the Acquisition under the HSR
Act, (ii) obtaining any Clearance under any other applicable
Antitrust Laws or foreign investment Laws or (iii) obtaining any
other Clearance from a Governmental Entity or otherwise; provided,
however, that AbbVie shall, and shall cause its Subsidiaries to, if
necessary to resolve, avoid or eliminate impediments or
objections, if any, that may be asserted with respect to the
Acquisition under any Antitrust Law or foreign investment Law
commit to or effect (x) a divestiture, sale or license of (or
subjecting to any hold-separate order) the assets and business
relationships of the Allergan Group relating to the Allergan
Products listed on Schedule 7.2(c) of the Allergan Disclosure
Schedule (the "Specified Products"), and (y) such other
actions (including any divestiture, sale or license of (or
subjecting to any hold-separate order)), with respect to any asset,
operation, division, business, product line or business
relationship of the Allergan Group (and not, for clarity, of AbbVie
or any of its Subsidiaries) as would not, individually or in the
aggregate, have (if effected) a material impact (with materiality
measured relative to a company of the size and scale of the
Allergan Group) on the condition (financial or otherwise),
properties, assets, liabilities, business or results of operations
of AbbVie and its Subsidiaries (including Allergan and its
Subsidiaries) following Completion (provided, that, for clarity,
the impact of the actions contemplated by the foregoing clause (x)
shall not be taken into account in assessing any impact under this
clause (y)). Notwithstanding anything in this Section 7.2 to
the contrary, in no event shall (A) AbbVie or any of its
Subsidiaries or Allergan or any of its Subsidiaries be required to
agree to take or enter into any action (or refrain from taking any
action) which is not conditioned upon, and shall only become
effective from and after, the Completion Date, or (B) subject to
the last sentence of Section 7.2(d), Allergan or any of its
Subsidiaries agree to any obligation, restriction, requirement,
limitation, qualification, condition, remedy or other action
relating to Clearances under any Antitrust Law or foreign
investment Law required to be obtained by the Parties or their
respective Subsidiaries in connection with the Acquisition without
the prior written consent of AbbVie, but, if requested by AbbVie in
writing, Allergan shall, and shall cause its Subsidiaries to,
subject to the foregoing clause (A) of this Section 7.2(c), take
any such actions to obtain any of the governmental approvals
described in this Section 7.2(c).
(d) Subject to the last sentence of this Section 7.2(d),
AbbVie shall have the right to (i) direct, devise and implement the
strategy for obtaining any necessary approval of, for responding to
any request from, inquiry or investigation by (including directing
the timing, nature and substance of all such responses), and shall
have the right to lead all meetings and communications (including
any negotiations) with, any Governmental Entity that has authority
to enforce any Antitrust Law and (ii) control the defense and
settlement of any Action brought by or before any Governmental
Entity that has authority to enforce any Antitrust Law; provided,
however, that AbbVie shall consult with Allergan and consider in
good faith the views and comments of Allergan in connection with
the foregoing. AbbVie shall be permitted to pull and refile,
on one or more occasions, any filing made under the HSR Act, or any
other Antitrust Law, or (without limiting AbbVie's required efforts
to consummate the Acquisition as promptly as reasonably practicable
as otherwise set forth in this Section 7.2) enter into a timing
agreement with any Governmental Entity in relation to any Antitrust
Law, in connection with the Acquisition or any of the other
transactions contemplated hereby, provided, that, without the prior
written consent of Allergan, no pull and refile shall occur after
October 31, 2019. Without
limiting AbbVie's rights with respect to overall strategy and
control as set forth in the remainder of this Section 7.2(d), with
respect to Specified Products the Parties agree to and shall comply
with the provisions set forth on Section 7.2(d) of the Allergan
Disclosure Schedule.
(e) To the extent permitted by applicable Law, Allergan and
AbbVie shall, as promptly as reasonably practicable, (i) upon
request from a Governmental Entity, furnish to such Governmental
Entity, any information or documentation concerning themselves,
their Subsidiaries, directors, officers and stockholders
information or documentation concerning the Acquisition, the Scheme
and the other transactions contemplated hereby and such other
matters as may be requested and (ii) make available their
respective Representatives to, upon reasonable request, any
Governmental Entity, in the case of each of clauses (i) and (ii),
in connection with (A) the preparation of any Filing made by or on
their behalf to any Governmental Entity in connection with the
Acquisition, the Scheme or any of the other transactions
contemplated hereby or (B) any Governmental Entity investigation,
review or approval process.
(f) Subject to Section 7.2(d), applicable Laws relating to
the sharing of information and the terms and conditions of the
Confidentiality Agreement and all other agreements entered into by
the Parties, and subject to the proviso at the end of this Section
7.2(f), each of Allergan and AbbVie shall, and each shall cause its
Subsidiaries to: (i) (A) as far in advance as reasonably
practicable, notify the other party of, and provide the other party
with an opportunity to consult with respect to, any Filing or
material or substantive communication or inquiry it or any of its
Subsidiaries intends to make with any Governmental Entity relating
to the matters that are the subject of this Agreement, (B) prior to
submitting any such Filing or making any such communication or
inquiry, the submitting or making party shall provide the other
party and its counsel a reasonable opportunity to review, and shall
consider in good faith the comments of the other party and such
other party's Representatives in connection with any such Filing,
communication or inquiry (except HSR filings), and (C) promptly
following the submission of such Filing (except HSR filings) or
making of such communication or inquiry, provide the other party
with a copy of any such Filing or, if in written form, a
summary of any communication or inquiry; (ii) as promptly as
reasonably practicable following receipt, furnish the other party
with a copy of any Filing (except HSR filings) or, if in written
form, material or substantive communication or inquiry, it or any
of its Subsidiaries receives from any Governmental Entity relating
to matters that are the subject of this Agreement; and (iii)
coordinate and reasonably cooperate with the other party in
exchanging such information and provide such other assistance as
the other party may reasonably request in connection with this
Section 7.2. Subject to Section 7.2(d), none of Allergan,
AbbVie or their respective Representatives shall agree to
participate in any material or substantive meeting or conference
(including by telephone) with any Governmental Entity, or any
member of the staff of any Governmental Entity, in respect of any
Filing, Action (including the settlement of any investigation) or
other inquiry regarding the Acquisition or the Scheme unless it
consults with the other party in advance and, to the extent
permitted by such Governmental Entity, allows the other party to
participate.
(g) In the event that the latest date on which the High
Court and/or the Panel would permit Completion to occur is prior to
the End Date, the Parties shall use their respective reasonable
best efforts to obtain consent of the High Court and/or the Panel,
as applicable, to an extension of such latest date (but not beyond
the End Date). If (i) the High Court and/or the Panel require
the lapsing of the Scheme prior to the End Date, or (ii) Condition
1 fails to be satisfied, the Parties shall (unless and until this
Agreement is validly terminated pursuant to and in accordance with
Article 9) take all reasonable actions required in order to
re-initiate the Scheme process as promptly as reasonably
practicable (it being understood that no such lapsing described in
subclause (i) or (ii) shall, in and of itself, result in a
termination of, or otherwise affect any rights or obligations of
any Party under, this Agreement).
Section 7.3 Directors' and Officers'
Indemnification and Insurance.
(a) For a period of not less than six years from the
Effective Date, AbbVie shall cause Allergan or any applicable
Subsidiary thereof (collectively, the "D&O Indemnifying
Parties"), to the fullest extent each such D&O Indemnifying
Party is so authorized or permitted by applicable Law, as now or
hereafter in effect, to: (i) indemnify and hold harmless each
person who is at the date hereof, was previously, or during the
period from the date hereof through the date of the Effective Time,
serving as a director or officer of Allergan or any of its
Subsidiaries, or at the request or for the benefit of Allergan or
any of its Subsidiaries as a director, trustee or officer of any
other entity or any benefit plan maintained by Allergan or any of
its Subsidiaries (collectively, the "D&O Indemnified
Parties"), as in effect as of the date of this Agreement, in
connection with any D&O Claim and any losses, claims, damages,
liabilities, Claim Expenses, judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and
other charges paid or payable in connection with or in respect of
any thereof) relating to or resulting from such D&O Claim; and
(ii) promptly advance to such D&O Indemnified Party any Claim
Expenses incurred in defending, serving as a witness with respect
to or otherwise participating with respect to any D&O Claim in
advance of the final disposition of such D&O Claim, including
payment on behalf of or advancement to the D&O Indemnified
Party of any Claim Expenses incurred by such D&O Indemnified
Party in connection with enforcing any rights with respect to such
indemnification and/or advancement, in each case without the
requirement of any bond or other security, but subject to the
D&O Indemnifying Party's receipt of a written undertaking by or
on behalf of such D&O Indemnified Party to repay such Claim
Expenses if it is ultimately determined under applicable Law that
such D&O Indemnified Party is not entitled to be
indemnified. All rights to indemnification and advancement
conferred hereunder shall continue as to a Person who has ceased to
be a director or officer of Allergan or any of its Subsidiaries
after the date hereof and shall inure to the benefit of such
Person's heirs, successors, executors and personal and legal
representatives. As used in this Section 7.3: (x) the
term "D&O Claim" means any threatened, asserted,
pending or completed Action, whether instituted by any Governmental
Entity or any other Person, arising out of or pertaining to acts or
omissions occurring at or prior to the Effective Time that
relate to such D&O Indemnified Party's duties or service (A) as
a director or officer of Allergan or the applicable Subsidiary
thereof at or prior to the Effective Time (including with respect
to any acts, facts, events or omissions occurring in connection
with the approval of this Agreement, the Scheme, the Acquisition
and the consummation of the other transactions contemplated hereby
(including the Acquisition), including the consideration and
approval thereof and the process undertaken in connection
therewith) or (B) as a director, trustee or officer of any other
entity or any benefit plan maintained by Allergan or any of its
Subsidiaries (for which such D&O Indemnified Party is or was
serving at the request or for the benefit of Allergan or any of its
Subsidiaries) at or prior to the Effective Time; and (y) the term
"Claim Expenses" means reasonable out-of-pocket
attorneys' fees and all other reasonable out-of-pocket costs,
expenses and obligations (including experts' fees, travel expenses,
court costs, retainers, transcript fees, duplicating, printing and
binding costs, as well as telecommunications, postage and courier
charges) paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on
appeal), or preparing to investigate, defend, be a witness in or
participate in any D&O Claim for which indemnification is
authorized pursuant to this Section 7.3(a), including any
action relating to a claim for indemnification or advancement
brought by a D&O Indemnified Party.
(b) For a period of not less than six years from the
Effective Date, AbbVie shall cause the organizational documents of
Allergan to contain provisions no less favorable with respect to
indemnification, advancement of expenses and limitations on
liability of directors and officers than are set forth in the
Organizational Documents of Allergan as of the date of this
Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of at least six years from the
Effective Date in any manner that would adversely affect the rights
thereunder of any D&O Indemnified Party, unless any
modification or amendment is required by applicable Law (but then
only to the extent required by applicable Law). At Allergan's
option and expense, prior to the Effective Time, Allergan may
purchase (and pay in full the aggregate premium for) a six-year
prepaid "tail" insurance policy (which policy by its express terms
shall survive the Acquisition) of at least the same coverage and
amounts and containing terms and conditions that are no less
favorable to the directors and officers of Allergan or any of its
Subsidiaries as Allergan's and its Subsidiaries' existing
directors' and officers' insurance policy or policies with a claims
period of six years from the Effective Time for D&O Claims
arising from facts, acts, events or omissions that occurred on or
prior to the Effective Time; provided that the premium for
such tail policy shall not exceed three hundred percent (300%) of
the annual amount currently paid by Allergan and its Subsidiaries
for such insurance (such amount being the "Maximum
Premium"). If Allergan fails to obtain such tail policy
prior to the Effective Time, AbbVie shall obtain such a tail
policy; provided, however, that the premium for such tail policy
shall not be required to exceed the Maximum Premium; provided,
further, that if such tail policy cannot be obtained or can be
obtained only by paying a premium in excess of the Maximum Premium,
AbbVie shall only be required to obtain as much coverage as can be
obtained by paying a premium equal to the Maximum Premium.
AbbVie and Allergan shall cause any such policy (whether obtained
by AbbVie or Allergan) to be maintained in full force and effect,
for its full term, and AbbVie shall, following the Effective Time,
cause Allergan to honor all its obligations thereunder.
(c) If AbbVie or Allergan or any of their respective
successors or assigns (i) consolidates with or merges with or into
any other Person and shall not be the continuing or surviving
company, partnership or other Person of such consolidation or
merger or (ii) liquidates, dissolves or winds-up, or transfers or
conveys all or substantially all of its properties and assets to
any Person, then, and in each such case, proper provision shall be
made so that the successors and assigns of AbbVie or Allergan, as
applicable, assume the obligations set forth in this
Section 7.3.
(d) The provisions of this Section 7.3 are
intended to be for the express benefit of, and shall be enforceable
by, each D&O Indemnified Party (who are intended to be third
party beneficiaries of this Section 7.3), his or her heirs and
his or her personal Representatives, shall be binding on all
successors and assigns of AbbVie, and following the Effective Time,
Allergan. The exculpation and indemnification provided for by
this Section 7.3 shall not be deemed to be exclusive of
any other rights to which a D&O Indemnified Party is
entitled, pursuant to applicable Law or Contract made available to
AbbVie prior to the date hereof.
Section 7.4 Employment and Benefit
Matters.
(a) From the date of Completion through the earlier of (i)
the second anniversary of the Effective Time, and (ii) December 31, 2021 (or, if shorter, the period of
employment of the relevant Allergan Employee) (the "Benefits
Continuation Period"), Acquirer Sub shall provide, and AbbVie
shall cause Acquirer Sub to provide, to (i) each Allergan Employee
a base salary that is no less favorable than the base salary
provided to such Allergan Employee immediately prior to the
Effective Time, (ii) each Allergan Employee a target annual cash
bonus opportunity that is no less favorable than the target annual
cash bonus opportunity provided to such Allergan Employee
immediately prior to the Effective Time, (iii) an Allergan
Employee who is eligible to be selected to receive an annual
equity compensation opportunity (inclusive of dividend equivalent
rights) as of immediately prior to the Effective Time, pursuant to
the ordinary course practices of Allerganas in effect of, and
disclosed to AbbVie prior to, the date hereof, shall continue to be
eligible to be selected to receive an annual equity compensation
opportunity, with a target grant date value that is no less
favorable than the target grant date value of the annual equity
compensation opportunity (inclusive of dividend equivalent rights)
applicable to his or her global grade level, as reflected in the
"2019 Long-Term Incentive Targets" schedule provided to AbbVie
prior to the date hereof), and AbbVie shall make such grants at the
same rate of participation per global grade level as disclosed to
AbbVie prior to the date hereof and with the form of the equity
compensation opportunity to be determined in AbbVie's sole
discretion, and (iv) to the Allergan Employees as a group, employee
benefits that are, in the aggregate, no less favorable than the
employee benefits provided to the Allergan Employees under the
Allergan Benefit Plans as in effect immediately prior to the
Effective Time; provided, that for purposes of determining whether
such employee benefits are no less favorable in the aggregate, any
defined benefit pension plan benefits, nonqualified deferred
compensation, subsidized retiree health or welfare benefits,
post-termination health or welfare benefits, and retention or
change in control payments or awards shall not be taken into
account.
(b) In addition, Acquirer Sub shall provide, and AbbVie
shall cause Acquirer Sub to provide, to each Allergan Employee who
experiences a termination of employment during the Benefits
Continuation Period, severance benefits that are no less favorable
than the severance benefits to which such Allergan Employee would
have been entitled upon such a termination of employment under any
Allergan Benefit Plan that is a severance plan, policy, program,
agreement or arrangement and set forth on Section 7.4(b) of the
Allergan Disclosure Schedule (collectively, the "Severance
Arrangements") and in which such Allergan Employee was eligible
to participate as of immediately prior to the Effective Time, but
only to the extent such Severance Arrangements are set forth on
Section 7.4(b) of the Allergan Disclosure Schedule and were
furnished to the Buyer prior to the date hereof. For purposes
of determining compliance with this Section 7.4(b), only the
existing terms of the Severance Arrangements will be taken into
account, and any modifications to the Severance Arrangements that
are effective after the date hereof but prior to the Effective Time
(and are made without AbbVie's advance written consent) will be
disregarded. Notwithstanding anything to the contrary in the
foregoing, for each Allergan Employee who is eligible to
participate in the Severance Arrangements marked with an asterisk
(*) on Section 7.4(b) of the Allergan Disclosure Schedule as of
immediately prior to the Effective Time, the protected period under
this Section 7.4(b) shall apply to a termination of employment that
occurs during the two-year period immediately following the
Effective Time.
(c) For purposes of vesting, eligibility to participate and
determining level of benefits under the employee benefit plans of
AbbVie providing benefits to any Allergan Employees (the
"New Plans"), each Allergan Employee shall be credited with
his or her years of service with the Allergan Group and its
predecessors before the Effective Time, to the same extent and for
the same purpose as such Allergan Employee was entitled, before the
Effective Time, to credit for such service under the corresponding
Allergan Benefit Plan in which such Allergan Employee participated
or was eligible to participate immediately prior to the Effective
Time, provided that the foregoing shall not apply with respect
to (A) any defined benefit pension plan or any retiree or
post-termination health or welfare benefits, (B) any benefit plan
that is frozen or for which participation is limited to a
grandfathered population, (C) any cash- or equity-based
compensation arrangements, or (E) to the extent that its
application would result in a duplication of benefits or
compensation with respect to the same period of service, and
provided further that such service shall only be credited to the
extent service with AbbVie is credited for similarly situated
employees of the AbbVie Group under the New Plans. In
addition, and without limiting the generality of the foregoing, (A)
each Allergan Employee shall be immediately eligible to
participate, without any waiting time, in any and all New Plans to
the extent coverage under such New Plan is replacing comparable
coverage under an Allergan Benefit Plan in which such Allergan
Employee had already satisfied any such waiting period and
participated immediately before the Effective Time (such plans,
collectively, the "Old Plans"), and (B) for purposes of each
New Plan providing medical, dental, pharmaceutical and/or vision
benefits to any Allergan Employee, AbbVie shall use its reasonable
best efforts to cause (1) all pre-existing condition exclusions and
actively-at-work requirements of such New Plan to be waived for
such employee and his or her covered dependents, unless and to the
extent the individual, immediately prior to entry in the New Plans,
was subject to such conditions under the comparable Old Plans, and
(2) any eligible expenses incurred by such employee and his or her
covered dependents during the portion of the plan year of the Old
Plan ending on the date such employee's participation in the
corresponding New Plan begins to be taken into account under such
New Plan for purposes of satisfying all deductible, coinsurance and
maximum out-of-pocket requirements applicable to such employee and
his or her covered dependents for the applicable plan year as if
such amounts had been paid in accordance with such New Plan.
(d) AbbVie hereby acknowledges that a "change of control"
(or similar phrase) within the meaning of any Allergan Benefit Plan
will occur at or prior to the Effective Time, as applicable.
(e) AbbVie and Allergan shall cooperate in respect of
consultation obligations and similar notice and bargaining
obligations owed to any employees or consultants of Allergan or any
Subsidiary of Allergan, or any of their respective bargaining
representatives, in accordance with all applicable Laws and works
council or other bargaining agreements, if any. Allergan
shall satisfy all such obligations prior to the Effective Time.
(f) AbbVie and Allergan agree to the additional matters set
forth in Section 7.4(f) of the Allergan Disclosure
Schedule.
(g) Nothing contained in this
Section 7.4 (whether express or implied) shall (i) create
or confer any rights, remedies or claims upon any employee of
Allergan or any of its Affiliates or any right of employment or
engagement or continued employment or engagement or any particular
term or condition of employment or engagement for any Allergan
Employee or any other Person, (ii) be considered or deemed to
establish, amend, or modify any Allergan Benefit Plan or any other
benefit or compensation plan, program, policy, agreement,
arrangement, or Contract, (iii) prohibit or limit the ability of
AbbVie or any of its Affiliates to amend, modify or terminate any
benefit or compensation plan, program, policy, agreement,
arrangement, or contract at any time assumed, established,
sponsored or maintained by any of them or (iv) confer any rights or
benefits (including any third-party beneficiary rights) on any
Person other than the Parties.
Section 7.5 Stock Exchange Listing; Stock Exchange
Delisting.
(a) AbbVie shall take all necessary action to cause all of
the Share Consideration to be issued in the Acquisition to be
approved for listing on the NYSE, subject only to official notice
of issuance, prior to the Effective Date.
(b) Prior to the Effective Time, each of the Parties shall
cooperate with the other Party in taking, or causing to be taken,
all actions, and do or cause to be done all things, necessary,
proper or advisable on its part under applicable Laws and rules and
policies of the NYSE to enable the de-listing of Allergan Shares
from the NYSE and the deregistration of Allergan Shares and other
securities of Allergan under the Exchange Act as promptly as
practicable after the Effective Time; provided that such
delisting and deregistration shall not be effective until after the
Effective Time.
Section 7.6 AbbVie Board of Directors.
AbbVie shall take all necessary action to cause, effective at the
Effective Time, (a) the number of members of the AbbVie Board to be
increased by two and (b) the vacancies created by the foregoing
clause (a) to be filled by two individuals, to be designated by
mutual agreement of AbbVie and Allergan prior to the Effective
Time, who are each serving as a director of Allergan immediately
prior to the Effective Time, and who are independent with respect
to AbbVie.
Section 7.7 Financing.
(a) From and after the date hereof until the earlier of the
Completion and the valid termination of this Agreement pursuant to
and in accordance with Article 9, in a timely manner so as not
to delay the Completion, the AbbVie Parties shall use their
reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable to consummate, no later than the
date the Completion is required to occur pursuant to this
Agreement, the Financing and obtain the proceeds thereof. The
AbbVie Parties shall keep Allergan informed on a reasonably current
basis of the status of their efforts to arrange the Financing,
including providing Allergan with (i) copies of all executed credit
agreements and indentures and any amendments, modifications,
replacements or waivers thereto (or notice that such documents have
been publicly filed) and (ii) prompt written notice of (A) the
receipt of any notice or other communication from any Financing
Source with respect to such Financing Source's failure or
anticipated failure to fund its commitments under any definitive
agreements relating to the Financing, (B) any material breach or
material default by any party to such definitive agreements of
which any AbbVie Party obtains knowledge, (C) any actual or, to the
knowledge of any AbbVie Party, threatened in writing, withdrawal,
repudiation, or termination of any of such definitive agreements,
or (D) any material dispute or disagreement between or among any
parties to such definitive agreements with respect to the
obligations to fund the Financing or the amount of the Financing to
be funded under such definitive agreements at the Completion;
provided that in no event will the AbbVie Parties be under any
obligation to disclose any information that is subject to
attorney-client or similar privilege (provided that the AbbVie
Parties shall use their respective reasonable best efforts to cause
any such information to be disclosed in a manner that would not
result in the loss of any such privilege).
(b) Notwithstanding anything contained in this Agreement to
the contrary, the AbbVie Parties expressly acknowledge and agree
that their obligations under this Agreement, including their
obligations to consummate the Completion, are not conditioned in
any manner upon the AbbVie Parties obtaining the Financing or any
other financing.
Section 7.8 Section 16 Matters.
Prior to the Effective Time, AbbVie and Allergan shall take all
such steps as may be required (to the extent permitted under
applicable Law) to cause any dispositions of Allergan Shares
(including derivative securities with respect to Allergan Shares)
or acquisitions of AbbVie Shares (including derivative securities
with respect to AbbVie Shares) resulting from the transactions
contemplated by this Agreement by each individual who is subject to
the reporting requirements of Section 16(a) of the Exchange
Act with respect to Allergan, or will become subject to such
reporting requirements with respect to AbbVie, to be exempt under
Rule 16b-3 promulgated under the
Exchange Act.
Section 7.9 Financing Cooperation.
(a) Until the earlier of the Completion and the valid
termination of this Agreement pursuant to and in accordance with
Article 9, Allergan shall use its reasonable best efforts, and
shall cause each of its Subsidiaries to use its reasonable best
efforts, and shall use its reasonable best efforts to cause its and
their respective officers, employees and advisors and other
Representatives, including legal and accounting advisors, to use
their reasonable best efforts, to provide to AbbVie and its
Subsidiaries such assistance as may be reasonably requested by
AbbVie in writing that is customary in connection with the
arranging, obtaining and syndication of the Financing, including
using reasonable best efforts with respect to:
(i) participating in and
assisting with the due diligence, syndication or other marketing of
the Financing, including using reasonable best efforts with respect
to (A) the participation by members of management of Allergan with
appropriate seniority in a reasonable number of meetings,
presentations, road shows, drafting sessions, due diligence
sessions and sessions with prospective lenders, investors and
rating agencies, at times and at locations reasonably acceptable to
Allergan and upon reasonable notice, (B) assisting with AbbVie's
preparation of customary materials for registration statements,
offering documents, private placement memoranda, bank information
memoranda, prospectuses, rating agency presentations and similar
documents required in connection with the Financing (collectively,
"Marketing Material") and due diligence sessions related
thereto, (C) delivering and consenting to the inclusion or
incorporation in any SEC filing related to the Financing of the
historical audited consolidated financial statements and unaudited
consolidated interim financial statements of Allergan included or
incorporated by reference into the Allergan SEC Documents (the
"Historical Financial Statements") and (D) delivering
customary authorization letters, management representation letters,
confirmations, and undertakings in connection with the Marketing
Material (in each case, as applicable, subject to customary
confidentiality provisions and disclaimers);
(ii) timely furnishing AbbVie
and its Financing Sources with historical financial and other
customary information (collectively, the "Financing
Information") with respect to Allergan and its Subsidiaries as
is reasonably requested by AbbVie or its Financing Sources and
customarily required in Marketing Material for Financings of the
applicable type, including all Historical Financial Statements and
other customary information with respect to Allergan and its
Subsidiaries (A) of the type that would be required by Regulation
S-X and Regulation S-K under the Securities Act if the Financing
were incurred by AbbVie and registered on Form S-3 under the
Securities Act, including audit reports of annual financial
statements to the extent so required (which audit reports shall not
be subject to any "going concern" qualifications), or (B)
reasonably necessary to permit AbbVie to prepare pro forma
financial statements customary for Financings of the applicable
type;
(iii) providing to AbbVie's
legal counsel and its independent auditors such customary documents
and other customary information relating to Allergan and its
Subsidiaries as may be reasonably requested in connection with
their delivery of any customary negative assurance opinions and
customary comfort letters relating to the Financing;
(iv) causing Allergan's
independent auditors to provide customary cooperation with the
Financing;
(v) obtaining the consents of
Allergan's independent auditors to use their audit reports on the
audited Historical Financial Statements of Allergan and to
references to such independent auditors as experts in any Marketing
Material and registration statements and related government filings
filed or used in connection with the Financing;
(vi) obtaining Allergan's
independent auditors' customary comfort letters and assistance with
the accounting due diligence activities of the Financing
Sources;
(vii) causing the Financing
to benefit from the existing lender relationships of Allergan and
its Subsidiaries;
(viii) providing documents
reasonably requested by AbbVie or the Financing Sources relating to
the repayment or refinancing of any indebtedness for borrowed money
of Allergan or any of its Subsidiaries to be repaid or refinanced
on the Completion Date and the release of related liens and/or
guarantees (if any) effected thereby, including customary payoff
letters and (to the extent required) evidence that notice of any
such repayment has been timely delivered to the holders of such
indebtedness, in each case in accordance with the terms of the
definitive documents governing such indebtedness (provided that any
such notice or payoff letter shall be expressly conditioned on the
Completion);
(ix) procuring consents to
the reasonable use of all of Allergan's logos in connection with
the Financing (provided that such logos are used solely in a
manner that is not intended to and is not reasonably likely to harm
or disparage Allergan or its Subsidiaries or the reputation or
goodwill of Allergan or any of its Subsidiaries); and
(x) providing at least three (3) Business Days in advance
of the Completion Date such documentation and other information
about Allergan and its Subsidiaries as is reasonably requested in
writing by AbbVie at least ten (10) Business Days in advance of the
Completion Date in connection with the Financing that relates to
applicable "know your customer" and anti-money laundering rules and
regulations, including without limitation, the USA PATRIOT ACT.
Notwithstanding anything to the contrary in this
Section 7.9(a) or Section 7.9(b) below, (A) none of
Allergan nor any of its Subsidiaries shall be required to take or
permit the taking of any action pursuant to this
Section 7.9(a) or Section 7.9(b) below to (i) pay any
commitment or other fee or incur any liability (other than
thirdÂparty costs and expenses that are to be promptly reimbursed
by AbbVie upon request by Allergan pursuant to
Section 7.9(c)), (ii) execute or deliver any definitive
financing documents or any other agreement, certificate, document
or instrument, or agree to any change to or modification of any
existing agreement, certificate, document or instrument, in each
case that would be effective prior to the Completion Date or would
be effective if the Completion does not occur (except (x) to the
extent required by Section 7.9(b), applicable Allergan
Supplemental Indentures, (y) customary officers' certificates
relating to the execution thereof that would not conflict with
applicable Law and would be accurate in light of the facts and
circumstances at the time delivered and (z) the authorization
letter and management representation letters delivered pursuant to
the clause (i)(D) above), (iii) provide access to or disclose
information that Allergan or any of its Subsidiaries reasonably
determines would jeopardize any attorney-client privilege of
Allergan or any of its Subsidiaries (provided that Allergan shall,
and shall cause its Subsidiaries to, use their respective
reasonable best efforts to cause any such information to be
disclosed in a manner that would not result in the loss of any such
privilege), (iv) deliver or cause its Representatives to deliver
any legal opinion or negative assurance letter (except, in
connection with the entry into an Allergan Supplemental Indenture
required by Section 7.9(b), Allergan shall, and shall cause
its Subsidiaries to, use their respective reasonable best efforts
to cause counsel to Allergan or its Subsidiaries, as applicable, to
deliver a customary opinion of counsel to the trustee under the
applicable Indenture that the Allergan Supplemental Indenture
amends if such trustee requires an opinion of counsel to Allergan
in connection therewith (provided that such opinions would not
conflict with applicable Law and would be accurate in light of the
facts and circumstances at the time delivered)), (v) be an issuer
or other obligor with respect to the Financing prior to the
Completion, (vi) commence any Allergan Note Offers and Consent
Solicitations or (vii) prepare any pro forma financial information
or projections, (B) none of the Allergan Board, officers of
Allergan, or directors and officers of the Subsidiaries of Allergan
shall be required to adopt resolutions or consents approving the
agreements, documents or instruments pursuant to which the
Financing is obtained or any Allergan Note Offers and Consent
Solicitations is consummated (except the execution and delivery of
any applicable Allergan Supplemental Indentures), and (C) neither
Allergan nor any of its Subsidiaries shall be required to take or
permit the taking of any action that would (i) interfere
unreasonably with the business or operations of Allergan or its
Subsidiaries, (ii) cause any representation or warranty in this
Agreement to be breached by Allergan or any of its Subsidiaries
(unless waived by AbbVie), (iii) cause any director, officer or
employee or shareholder of Allergan or any of its Subsidiaries to
incur any personal liability or (iv) result in a material violation
or breach of, or a default under, any material Contract to which
Allergan or any of its Subsidiaries is a party, the Organizational
Documents of Allergan or its Subsidiaries or any applicable Law.
AbbVie shall cause all non-public or other confidential information
provided by or on behalf of Allergan or any of its Subsidiaries or
Representatives pursuant to this Section 7.9 to be kept
confidential in accordance with the Confidentiality Agreement;
provided, that Allergan acknowledges and agrees that the
confidentiality undertakings that will be obtained in connection
with syndication of the Financing will be in a form customary for
use in the syndication of acquisition-related debt during a
takeover offer period in compliance with the requirements of the
Panel and the Takeover Rules.
(b) Cooperation as to Certain Indebtedness. AbbVie or
one or more of its Subsidiaries may (i) commence any of the
following: (A) one or more offers to purchase any or all of
the outstanding debt issued under the Indentures for cash (the
"Offers to Purchase"); or (B) one or more offers to
exchange any or all of the outstanding debt issued under the
Indentures for securities issued by AbbVie or any of its Affiliates
(the "Offers to Exchange"); and (ii) solicit the
consent of the holders of debt issued under the Indentures
regarding certain proposed amendments to the applicable Indenture
(the "Consent Solicitations" and, together with the
Offers to Purchase and Offers to Exchange, if any, the "Allergan
Note Offers and Consent Solicitations"); provided that the
closing of any such transaction shall not be consummated until the
Completion and any such transaction shall be funded using
consideration provided by AbbVie. Any Allergan Note Offers
and Consent Solicitations shall be made on such terms and
conditions (including price to be paid and conditionality) as are
proposed by AbbVie and which are permitted by the terms of the
applicable Indenture and applicable Laws, including SEC rules and
regulations. AbbVie shall consult with Allergan regarding the
material terms and conditions of any Allergan Note Offers and
Consent Solicitations, including the timing and commencement of any
Allergan Note Offers and Consent Solicitations and any tender
deadlines. AbbVie shall have provided Allergan with the
necessary offer to purchase, offer to exchange, consent
solicitation statement, letter of transmittal, press release, if
any, in connection therewith, and each other document relevant to
the transaction that will be distributed by AbbVie in the
applicable Allergan Note Offers and Consent Solicitations
(collectively, the "Debt Offer Documents") a reasonable
period of time in advance of commencing the applicable Allergan
Note Offers and Consent Solicitations to allow Allergan and its
counsel to review and comment on such Debt Offer Documents, and
AbbVie shall give reasonable and good faith consideration to any
comments made or input provided by Allergan and its legal
counsel. Subject to the receipt of the requisite holder
consents, in connection with any or all of the Consent
Solicitations, Allergan shall execute a supplemental indenture to
the applicable Indenture in accordance with the terms thereof
amending the terms and provisions of such Indenture as described in
the applicable Debt Offer Documents in a form as reasonably
requested by AbbVie (each, an "Allergan Supplemental
Indenture"); provided that the amendments effected by such
supplemental indenture shall not become operative until the
Completion. Subject to the second paragraph of
Section 7.9(a) above, until the earlier of the Completion and
the valid termination of this Agreement pursuant to and in
accordance with Article 9 Allergan shall use its reasonable
best efforts, and shall cause each of its Subsidiaries to use its
reasonable best efforts, and shall use its reasonable best efforts
to cause its and their respective Representatives to use their
reasonable best efforts, to provide all reasonable and customary
cooperation as may be reasonably requested by AbbVie in writing to
assist AbbVie in connection with any Allergan Note Offers and
Consent Solicitations (including upon AbbVie's written request,
using reasonable best efforts to cause Allergan's independent
accountants to provide customary consents for use of their reports
to the extent required in connection with any Allergan Note Offers
and Consent Solicitations). The dealer manager, solicitation
agent, information agent, depositary or other agent retained in
connection with any Allergan Note Offers and Consent Solicitations
will be selected and retained by AbbVie, and their fees and
out-of-pocket expenses will be paid directly by AbbVie. If,
at any time prior to the completion of the Allergan Note Offers and
Consent Solicitations, Allergan or any of its Subsidiaries, on the
one hand, or AbbVie or any of its Subsidiaries, on the other hand,
discovers any information that should be set forth in an amendment
or supplement to the Debt Offer Documents, so that the Debt Offer
Documents shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
circumstances under which they are made, not misleading, such party
that discovers such information shall use reasonable best efforts
to promptly notify the other Party, and an appropriate amendment or
supplement prepared by AbbVie describing such information shall be
disseminated to the holders of the applicable notes, debentures or
other debt securities of Allergan or its Subsidiaries outstanding
under the applicable Indenture. The consummation of any or
all of the Allergan Note Offers and Consent Solicitations shall not
be a condition to Completion.
(c) AbbVie shall, promptly upon request by Allergan,
reimburse Allergan for all reasonable and documented third-party
out-of-pocket costs and expenses (including attorneys' fees)
incurred by Allergan or its Subsidiaries in connection with the
cooperation, and shall indemnify and hold harmless Allergan, its
Subsidiaries and their respective Representatives from and against
any and all liabilities, losses, damages, claims, expenses
(including attorneys' fees), interest, judgments and penalties
suffered or incurred by them, in connection with this
Section 7.9 (other than to the extent resulting from (x)
information provided by Allergan or its Subsidiaries in writing in
accordance with the terms hereof to the extent such information, as
provided, is inaccurate or misleading or (y) Allergan's or its
Subsidiaries' or Representatives' willful misconduct or gross
negligence, as determined by a final non-appealable judgment of a
court of competent jurisdiction), in each case whether or not the
Completion is consummated or this Agreement is terminated.
Section 7.10 Transaction Litigation.
Subject to the last sentence of this Section 7.10, each of
Allergan and AbbVie shall promptly notify the other of any
stockholder Actions (including derivative claims) commenced against
it, its Subsidiaries and/or its or its Subsidiaries' respective
directors or officers relating to this Agreement or any of the
transactions contemplated hereby or any matters relating thereto
(collectively, "Transaction Litigation") and shall keep the
other Party informed regarding any Transaction Litigation.
Other than with respect to any Transaction Litigation where the
Parties are adverse to each other, each of Allergan and AbbVie
shall reasonably cooperate with the other in the defense or
settlement of any Transaction Litigation, and shall give the other
Party the opportunity to consult with it regarding the defense and
settlement of such Transaction Litigation and shall consider in
good faith the other Party's advice with respect to such
Transaction Litigation, and Allergan shall give AbbVie the
opportunity to participate in (but not control), at AbbVie's
expense, the defense and settlement of such Transaction
Litigation. Prior to the Effective Time, other than with
respect to Transaction Litigation where the Parties are adverse to
each other, neither Allergan nor any of its Subsidiaries shall
settle or offer to settle any Transaction Litigation without the
prior written consent of AbbVie (which consent shall not be
unreasonably withheld, conditioned or delayed).
Notwithstanding anything to the contrary in this Section 7.10,
in the event of any conflict with any other covenant or agreement
contained in Section 7.2 that expressly addresses the subject
matter of this Section 7.10, Section 7.2 shall govern and
control.
Section 7.11 Dividends. Each of Allergan
and AbbVie shall coordinate with the other on the payment of
dividends with respect to Allergan Shares and AbbVie Shares, and
the declaration and setting of record dates and payment dates
relating thereto, in respect of any calendar quarter so that
Allergan Shareholders do not receive dividends on both the Allergan
Shares and AbbVie Shares received in the Acquisition in respect of
the same calendar quarter or fail to receive a dividend on either
Allergan Shares or AbbVie Shares received in the Acquisition in
respect of any calendar quarter.
Section 7.12 State Takeover Statutes. Each of
AbbVie and Allergan shall (a) take all action necessary so that no
"moratorium," "control share acquisition," "fair price,"
"supermajority," "affiliate transaction" or "business combination"
statute or regulation or other similar state anti-takeover Law, or
any similar provision of the Organizational Documents of Allergan
or the Organizational Documents of AbbVie, as applicable, is or
becomes applicable to the Scheme, the Acquisition or any of the
other transactions contemplated hereby, and (b) if any such Law or
provision is or becomes applicable to the Scheme, the Acquisition
or any other transactions contemplated hereby, cooperate and grant
such approvals and take such actions as are reasonably necessary so
that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of such Law on
the Scheme, the Acquisition or the other transactions contemplated
hereby.
Section 7.13 Acquirer Sub. Until the
Effective Time, AbbVie shall at all times be the direct or indirect
owner of all of the outstanding shares of capital stock of Acquirer
Sub. AbbVie shall take all action necessary to cause Acquirer
Sub to perform its obligations under this Agreement and to
consummate the Acquisition on the terms and subject to the
conditions set forth in this Agreement.
ARTICLE 8
COMPLETION OF ACQUISITION AND MERGER
Section 8.1 Completion.
(a) Completion Date. Completion shall take place at
9:00 a.m., New York City time, on a
date to be selected by AbbVie in consultation with Allergan as
promptly as reasonably practicable following, but not later than
the third Business Day (or such shorter period of time as remains
before 5:00 p.m., New York City time,
on the End Date) after, the satisfaction or, in the sole discretion
of the applicable Party, waiver (where applicable) of all of the
Conditions ("Completion Date") (other than those Conditions that by
their nature are to be satisfied at the Completion Date, but
subject to the satisfaction or waiver of such Conditions at the
Completion Date) with the exception of Condition 2(iv) (but subject
(where applicable) to the satisfaction or waiver (where applicable)
of such Condition) or at such other date and/or time as may be
mutually agreed to by AbbVie and Allergan in writing, it being
agreed that, only if reasonably practicable, Completion shall take
place on the date that Condition 2(iii) is satisfied.
Completion shall take place at the offices of Kirkland & Ellis
LLP, 601 Lexington Avenue, New York, New York 10022, or at such
other place as may be mutually agreed to by AbbVie and Allergan in
writing.
(b) On or prior to Completion:
(i) Allergan shall cause a
meeting of the Allergan Board (or a duly authorized committee
thereof) to be held at which resolutions are passed (conditional on
registration of the Court Order with the Registrar of Companies
occurring and effective as of the Effective Time) approving:
(A) the allotment and issue
to Acquirer Sub (and/or its respective nominee) in accordance with
the Scheme of the number of new shares in the capital of Allergan
provided for in the Scheme;
(B) the removal of the
directors of Allergan as AbbVie shall determine; and
(C) the appointment of such
persons as AbbVie may nominate as the directors of Allergan.
(ii) Allergan shall deliver to
AbbVie statements of Allergan Finco Inc., a Delaware corporation,
and Allergan Pharma Inc., a Delaware corporation, which meet the
requirements of Treasury Regulation Section 1.897‑2(h)(1)(i),
dated within 30 days prior to the Completion Date, in form and
substance reasonably acceptable to AbbVie.
(c) On or substantially concurrently with the Completion
and subject to and in accordance with the terms and conditions of
the Scheme:
(i) in respect of each
Allergan Share subject to the Scheme, AbbVie shall pay or cause to
be paid the Cash Consideration to the applicable Allergan
Shareholder (and/or their nominees);
(ii) AbbVie shall issue and
deliver or cause to be delivered 0.8660 (as it may be adjusted
pursuant to Section 8.1(c)(v), the "Exchange Ratio") of
an AbbVie Share (the "Share Consideration" and,
together with the Cash Consideration and any cash in lieu of
Fractional Entitlements due to an Allergan Shareholder, the
"Scheme Consideration") to the applicable Allergan
Shareholder (and/or their nominees), which Share Consideration
shall be duly authorized, validly issued, fully paid and
non-assessable and free of Liens (other than any restrictions
imposed by applicable Law) and pre-emptive rights; provided,
however, that no fractions of AbbVie Shares ("Fractional
Entitlements") shall be issued by AbbVie to the Allergan
Shareholders under this Section 8.1(c)(ii), and all Fractional
Entitlements that would otherwise have been due to any Allergan
Shareholders shall be aggregated and sold in the market by the
Exchange Agent with the net proceeds of any such sale distributed
pro rata to such Allergan Shareholders in accordance with the
Fractional Entitlements to which they would otherwise have been
entitled;
(iii) Allergan shall deliver
to AbbVie:
(A) a certified copy of the
resolutions referred to in Section 8.1(b)(i);
(B) letters of resignation
from the directors that are removed from Allergan in accordance
with Section 8.1(b)(i)(B) (each such letter to contain an
acknowledgement that such resignation is without any claim or right
of action of any nature whatsoever outstanding against Allergan or
the Allergan Group or any of their officers or employees for breach
of contract, compensation for loss of office, redundancy or unfair
dismissal or on any other grounds whatsoever in respect of the
removal); and
(C) share certificates in
respect of the aggregate number of shares in the capital of
Allergan to be issued to AbbVie (and/or its nominee) in accordance
with the Scheme;
(iv) Allergan shall cause an
office copy of the Court Order and a copy of the minute required by
Section 86 of the Act to be filed with the Companies
Registration Office and obtain from the Registrar of Companies a
Certificate of Registration in relation to the reduction of share
capital involved in the Scheme, each of which (in the case of such
Court Order, minute and Certificate of Registration) shall be
provided by Allergan to AbbVie immediately following Allergan's
receipt thereof; and
(v) if the Acquisition would
otherwise result in the issuance of AbbVie Shares in excess of
19.99% of the AbbVie Shares outstanding immediately prior to the
Completion (as reasonably determined by AbbVie) (the "Share
Cap"), the Exchange Ratio shall be reduced by the smallest
number (rounded to the nearest 0.0001) that causes the total number
of AbbVie Shares issuable in the Acquisition to not exceed the
Share Cap (the "Exchange Ratio Modification Number"), and
the Cash Consideration shall be increased by an amount in cash
equal to (x) the Exchange Ratio Modification Number multiplied by
(y) the VWAP of the AbbVie Shares.
(d) Exchange of Allergan Shares.
(i) Exchange Agent. At
or immediately following the Completion, AbbVie shall deposit, or
cause to be deposited, with the Exchange Agent, for the benefit of
the Allergan Shareholders, (A) certificates or, at AbbVie's option,
evidence of shares in book-entry form representing the aggregate
Share Consideration, (B) cash in an amount equal to the aggregate
amount of Cash Consideration and (C) cash in an amount equal to the
aggregate amount of cash in lieu of Fractional Entitlements due to
the Allergan Shareholders. All shares and cash deposited with
the Exchange Agent pursuant to the preceding sentence shall
hereinafter be referred to as the "Allergan Exchange
Fund".
(ii) Exchange
Procedures. As promptly as reasonably practicable after the
Effective Time, and in any event within five Business Days after
the Effective Time, AbbVie shall cause the Exchange Agent to mail
to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented Allergan Shares
and each holder of record of non-certificated Allergan Shares
represented by book-entry shares that is entitled to receive the
Scheme Consideration pursuant to Section 8.1(c)(i) a
letter of transmittal and instructions for use in receiving payment
of the Scheme Consideration. Each holder of record of such
Allergan Shares shall be entitled to receive promptly following the
Effective Time: (a) the amount of cash payable in respect of the
Cash Consideration that such holder has the right to receive
pursuant to Section 8.1(c)(i)plus the amount of any cash
payable in lieu of any Fractional Entitlements that such holder has
the right to receive pursuant to Section 8.1(c)(ii) and (b)
that number of AbbVie Shares into which such holder's Allergan
Shares were converted pursuant to Section 8.1(c)(ii). No
interest shall be paid or shall accrue for the benefit of holders
of the Allergan Shares on the Scheme Consideration payable in
respect of the Allergan Shares.
(iii) Termination of Allergan
Exchange Fund. Any portion of the Exchange Fund which has not
been transferred to the holders of Allergan Shares within twelve
months of the Completion Date shall be delivered to AbbVie or its
designee(s) promptly upon demand by AbbVie, it being understood
that no such delivery shall affect any legal right that an Allergan
Shareholder may have to receive the Scheme Consideration.
(iv) No Liability. None
of AbbVie, Acquirer Sub, Allergan or the Exchange Agent or any of
their respective Affiliates, directors, officers, employees and
agents shall be liable to any person in respect of any Scheme
Consideration (or dividends or distributions with respect thereto)
from the Allergan Exchange Fund delivered to a public official
pursuant to any applicable abandoned property, escheat or similar
Law.
(v) Withholding.
Notwithstanding anything herein to the contrary, AbbVie, Allergan,
the Exchange Agent and their respective Affiliates shall be
entitled to deduct and withhold from any amount payable pursuant to
this Agreement to any Person who was a holder of an Allergan Share
subject to the Scheme such amounts as AbbVie, Allergan, the
Exchange Agent or such Affiliate is required to deduct and withhold
with respect to the making of such payment under the Code or any
other provision of federal, state, local or non-U.S. Tax
law. To the extent that amounts are so withheld and timely
paid over to the appropriate Tax Authority, such withheld amounts
shall be treated for all purposes of this Agreement as having been
paid to the Person to whom such consideration would otherwise have
been paid.
ARTICLE 9
TERMINATION
Section 9.1 Termination.
(a) This Agreement may be terminated and the Acquisition
and the other transactions contemplated hereby may be abandoned at
any time prior to the Effective Time, notwithstanding receipt of
the Allergan Shareholder Approval (except in the case of
Section 9.1(a)(ii)(B) or
Section 9.1(a)(iii)(B)):
(i) by either Allergan or
AbbVie:
(A) if the Court Meeting or
the EGM shall have been completed and the Court Meeting Resolution
or the Required EGM Resolutions, as applicable, shall not have been
approved by the requisite majorities; or
(B) if the Effective Time
shall not have occurred by 5:00 p.m.,
New York City time, on the End Date, provided that the right
to terminate this Agreement pursuant to this
Section 9.1(a)(i)(B) shall not be available to a Party whose
breach of any provision of this Agreement shall have been the
primary cause of the failure of the Effective Time to have occurred
by such time;
(C) if the High Court shall
decline or refuse to sanction the Scheme, unless both Parties agree
in writing that the decision of the High Court shall be appealed
(it being agreed that Allergan shall make such an appeal if
requested to do so in writing by AbbVie and the counsel appointed
by AbbVie and by Allergan agree that doing so is a reasonable
course of action);
(D) if there shall be in
effect any (x) Law other than an order, writ, decree, judgment or
injunction described in clause (y) (whether or not final or
appealable) (excluding any such Antitrust Law of any jurisdiction
that is not a jurisdiction listed on Section 7.2(b) of the
Allergan Disclosure Schedule) in any jurisdiction of competent
authority or (y) final and non-appealable order, writ, decree,
judgment, or injunction issued, promulgated, made, rendered or
entered into by any court or other tribunal of competent
jurisdiction, that, in the case of each of clauses (x) and (y),
permanently restrains, enjoins, makes illegal or otherwise
prohibits the consummation of the Acquisition; provided that the
right to terminate this Agreement pursuant to this Section
9.1(a)(i)(D) shall not be available to any Party whose breach of
any provision of this Agreement shall have been the primary cause
of such Law, order, writ, decree, judgment, or injunction;
(ii) by Allergan:
(A) if any AbbVie Party shall
have breached or failed to perform in any material respect any of
its covenants or other agreements contained in this Agreement or if
any of its representations or warranties set forth in this
Agreement are inaccurate, which breach, failure to perform or
inaccuracy (1) would result in a failure of Condition 5(ii) or
5(iii) and (2) is not reasonably capable of being cured by the End
Date or, if curable, is not cured by the earlier of (x) the End
Date and (y) 30 days following written notice by Allergan
thereof;
(B) prior to obtaining the
Allergan Shareholder Approval, if (1) in accordance with Section
5.3, the Allergan Board shall have authorized Allergan to terminate
this Agreement under this Section 9.1(a)(ii)(B) in
response to an Allergan Superior Proposal and (2) substantially
concurrently with such termination, a definitive agreement
providing for the consummation of such Allergan Superior Proposal
is duly executed and delivered by all parties thereto and, prior to
or substantially concurrently with such termination, Allergan pays
AbbVie any amounts due under the Expenses Reimbursement Agreement
(it being understood that, without limiting Allergan's obligations
under the Expenses Reimbursement Agreement, only such costs and
expenses for which AbbVie shall have submitted to Allergan in
writing a request for such amounts and written invoices or written
documentation supporting such request prior to such termination in
accordance with the Expenses Reimbursement Agreement shall be due
substantially concurrently with such termination);
(iii) by AbbVie:
(A) if Allergan shall have
breached or failed to perform in any material respect any of its
covenants or other agreements contained in this Agreement or if any
of its representations or warranties set forth in this Agreement
are inaccurate, which breach, failure to perform or inaccuracy (1)
would result in a failure of Condition 4(ii) or 4(iii) and (2) is
not reasonably capable of being cured by the End Date or, if
curable, is not cured by the earlier of (x) the End Date and (y) 30
days following written notice by AbbVie thereof;
(B) if, prior to the receipt
of the Allergan Shareholder Approval, an Allergan Change of
Recommendation shall have occurred; and
(iv) by mutual written
consent of Allergan and AbbVie.
(b) The valid termination of this Agreement pursuant to and
in accordance with Section 9.1(a) shall not give rise to
any liability of the Parties except as provided in the Expenses
Reimbursement Agreement, in the proviso to Section 9.1(c) and
in Section 9.2. Section 7.9(c) and Article 10 (other
than Section 10.1 and 10.12) of this Agreement shall survive,
and continue in full force and effect, notwithstanding its
termination.
(c) Subject to the proviso in this Section 9.1(c),
upon valid termination of this Agreement pursuant to and in
accordance with this Article 9, neither Party nor any of its
Affiliates or its and their Representatives or shareholders shall
have any liability in connection with this Agreement or the
Acquisition, other than the obligation of Allergan (if applicable)
to pay the AbbVie Reimbursement Payments pursuant to the Expenses
Reimbursement Agreement) and the obligation of AbbVie (if
applicable) to pay Allergan the Reverse Termination Payment;
provided, however, that nothing herein shall release any Party from
liability (including any monetary damages or other appropriate
remedy) for Willful Breach or for fraud or as provided for in the
Confidentiality Agreement.
(d) For clarity, termination of this Agreement shall be
without prejudice to the provisions of the Expenses Reimbursement
Agreement.
Section 9.2 Certain Effects of Termination.
(a) In the event of a Specified Termination, then AbbVie
shall pay to Allergan $1,250,000,000
(the "Reverse Termination Payment") in cleared, immediately
available funds within three (3) Business Days thereafter;
provided, that Allergan shall not be entitled to receive the
Reverse Termination Payment if Allergan's breach of this Agreement
shall have been the primary cause of such Specified
Termination.
(b) "Specified Termination" means a valid
termination of this Agreement pursuant to:
(i) Section 9.1(a)(i)(B) if, on the date of such
termination, each of the Conditions has been satisfied (other than
any of Conditions 3(ii), 3(iii), 3(iv), 3(v) or 3(vi)(d) (which
failure to be satisfied, in the case of each of Conditions 3(v) and
3(vi)(d), results pursuant to or in connection with an Antitrust
Law in any jurisdiction listed on Section 7.2(b) of the Allergan
Disclosure Schedule), or any Condition that by its nature can only
be satisfied on the Sanction Date); or
(ii) Section 9.1(a)(i)(D) pursuant to or in
connection with an Antitrust Law in any jurisdiction listed on
Section 7.2(b) of the Allergan Disclosure Schedule.
(c) Each of the Parties acknowledges that the agreements
contained in this Section 9.2 are an integral part of the
Acquisition and that the Reverse Termination Payment is not a
penalty, but rather is a reasonable amount that will compensate
Allergan in the circumstances in which such payment is payable for
the efforts and resources expended and opportunities foregone while
negotiating this Agreement and in reliance on this Agreement and on
the expectation of the consummation of the Acquisition, which
amount would otherwise be impossible to calculate with precision.
In addition, if AbbVie fails to pay in a timely manner the Reverse
Termination Payment, then AbbVie shall reimburse Allergan for its
reasonable costs and expenses (including disbursements and fees of
counsel) incurred in connection with any Action to obtain such
payment, together with interest on the Reverse Termination Payment
from and including the date payment of such amount was due to but
excluding the date of actual payment at the prime rate set forth in
The Wall Street Journal in effect on the date such payment was
required to be made plus 2%.
ARTICLE 10
GENERAL
Section 10.1 Announcements. Subject to
the requirements of applicable Law or the applicable rules of any
securities exchange or Governmental Entity (including the Panel),
the Parties shall consult with each other as to the terms of, the
timing of and the manner of publication of any formal public
announcement which either Party may make primarily regarding the
Acquisition, the Scheme or this Agreement. AbbVie and
Allergan shall each give the other a reasonable opportunity to
review and comment upon any such public announcement and shall not
issue any such public announcement prior to such consultation,
except as may be required by applicable Law or the applicable rules
of any securities exchange or Governmental Entity (including the
Panel). For clarity, the provisions of this Section 10.1
do not apply to any announcement, document or publication in
connection with an Allergan Alternative Proposal, Allergan Superior
Proposal or an Allergan Change of Recommendation or any amendment
to the terms of the Scheme proposed by AbbVie that would effect an
increase in the Scheme Consideration whether before or after an
Allergan Change of Recommendation.
Section 10.2 Notices.
(a) Any notice or other document to be served under
this Agreement may be delivered by overnight delivery service (with
proof of service) or hand delivery, or sent in writing (including
facsimile or email transmission, the receipt of which is
confirmed), to the Party to be served as follows:
(i) if to AbbVie, to:
AbbVie Inc.
1 North Waukegan Road
North Chicago, Illinois 60064-6400
Attention: Laura J. Schumacher, Vice Chairman, External Affairs and
Chief Legal Officer
Facsimile: (847) 935-3294
with copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Email:
eric.schiele@kirkland.com, jonathan.davis@kirkland.com
Fax: (212) 446-4900
Attention: Eric Schiele, P.C., Jonathan L. Davis, P.C.
and
McCann FitzGerald
Riverside One, Sir John Rogerson's Quay
Dublin 2, D02 X576, Ireland
Email:
stephen.fitzsimons@mccannfitzgerald.com, david.byers@mccannfitzgerald.com
Fax: (+353) 1 829 0010
Attention: Stephen FitzSimons, David Byers
(ii) if to Allergan, to:
Allergan plc
Clonshaugh Business and Technology Park,
Coolock, Dublin, D17 E400, Ireland
Fax: (862) 261-8223
Attention: Executive Vice President, Chief Legal Officer and
Corporate Secretary
with copy to:
Allergan plc
5 Giralda Farms
Madison, New Jersey 07940
Fax: (862) 261-8223
Attention: Executive Vice President, Chief Legal Officer and
Corporate Secretary
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Fax: (212) 403-2000
Email: ARBrownstein@wlrk.com, IKirman@wlrk.com, ETetelbaum@wlrk.com
Attention: Andrew R. Brownstein, Esq., Igor Kirman,
Esq., Elina Tetelbaum, Esq.
and
Arthur Cox
Ten Earlsfort Terrace
D02 T380, Dublin, Ireland
Fax: (+353) 1 920 1020
Email:
geoff.moore@arthurcox.com, cian.mccourt@arthurcox.com, john.barrett@arthurcox.com
Attention: Geoff Moore, Cian McCourt, John Barrett
or such other postal or email address or fax number as it may
have notified to the other Party in writing in accordance with the
provisions of this Section 10.2.
(iii) All such notices, requests and other communications
shall be deemed received on the date of receipt by the recipient
thereof if received prior to 5:00
p.m. (addressee's local time) on a Business Day.
Otherwise, any such notice, request or communication shall be
deemed to have been received on the next succeeding Business
Day.
Section 10.3 Assignment. Neither Party shall
assign all or any part of its rights or obligations under this
Agreement without the prior written consent of the other Party;
provided that AbbVie may assign any or all of its rights and
obligations hereunder, in whole or from time to time in part, to
one or more of its Subsidiaries and Acquirer Sub may assign its
rights and obligations hereunder, in whole or from time to time in
part, to any other wholly owned Subsidiary of AbbVie (provided,
that the prior consent in writing has been obtained from the Panel
in respect of each such assignment), but no such assignment shall
relieve AbbVie or Acquirer Sub, as applicable, of its obligations
hereunder.
Section 10.4 Counterparts. This Agreement
may be executed in any number of counterparts, all of which, taken
together, shall constitute one and the same agreement, and each
Party may enter into this Agreement by executing a counterpart and
delivering it to the other Party (by hand delivery, facsimile
process, e-mail or otherwise).
Section 10.5 Amendment. No amendment of
this Agreement shall be binding unless the same shall be evidenced
in writing duly executed by each of the Parties, except that,
following approval by the Allergan Shareholders, there shall be no
amendment to the provisions hereof which by applicable Law would
require further approval by the Allergan Shareholders without such
further approval nor shall there be any amendment or change not
permitted under applicable Law. Notwithstanding anything to
the contrary herein, this Section 10.5, Sections 10.13(c)
and 10.13(d), Section 10.14 and Section 10.15 may not be
amended, supplemented, waived or otherwise modified in any manner
adverse to the Financing Sources without the prior written consent
of such Financing Sources party to any definitive agreement
relating to the Financing (it being expressly agreed that the
Financing Sources in their capacities as such shall be third party
beneficiaries of this Section 10.5 and shall be entitled to
the protections of the provisions contained in this
Section 10.5 as if they were a party to this Agreement).
Section 10.6 Entire Agreement. This
Agreement, together with the Confidentiality Agreement, the
Expenses Reimbursement Agreement, the Rule 2.5 Announcement and any
documents delivered by AbbVie and Allergan in connection herewith
(including the AbbVie Disclosure Schedule and the Allergan
Disclosure Schedule), constitutes the entire agreement and
supersedes all prior agreements and understandings, both written
and oral, between AbbVie and Allergan with respect to the subject
matter hereof, it being understood that the Confidentiality
Agreement shall survive the execution and delivery of this
Agreement.
Section 10.7 Inadequacy of Damages. The Parties
acknowledge and agree that irreparable harm would occur and that
the Parties would not have any adequate remedy at Law (i) for any
breach of any of the provisions of this Agreement or (ii) in the
event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is
accordingly agreed that, except where this Agreement is validly
terminated in accordance with Section 9.1, the Parties shall
be entitled to seek an injunction or injunctions to prevent
breaches or threatened breaches of this Agreement and to
specifically enforce the terms and provisions of this Agreement,
without proof of actual damages, and each Party further agrees to
waive any requirement for the securing or posting of any bond in
connection with such remedy. Subject to Section 9.1(c),
the Parties further agree that (x) by seeking the remedies provided
for in this Section 10.7, a Party shall not in any respect
waive its right to seek any other form of relief that may be
available to a Party under this Agreement and (y) nothing contained
in this Section 10.7 shall require any Party to institute any
proceeding for (or limit any party's right to institute any
proceeding for) specific performance under this Section 10.7
before exercising any termination right under Section 9.1 (and
pursuing damages after such termination), nor shall the
commencement of any action pursuant to this Section 10.7 or
anything contained in this Section 10.7 restrict or limit any
Party's right to terminate this Agreement in accordance with the
terms of Section 9.1 or pursue any other remedies under this
Agreement that may be available then or thereafter.
Section 10.8 Disclosure Schedule References and SEC
Document References.
(a) The Parties agree that each section or subsection of
the Allergan Disclosure Schedule or the AbbVie Disclosure Schedule,
as applicable, shall be deemed to qualify the corresponding section
or subsection of this Agreement, irrespective of whether or not any
particular section or subsection of this Agreement specifically
refers to the Allergan Disclosure Schedule or the AbbVie Disclosure
Schedule, as applicable. The Parties further agree that
(other than with respect to any items disclosed in Section
6.1(A)(k) of the Allergan Disclosure Schedule or Section
6.2(A)(h) of the AbbVie Disclosure Schedule, for which an explicit
reference in any other section shall be required in order to apply
to such other section) disclosure of any item, matter or event in
any particular section or subsection of either the Allergan
Disclosure Schedule or the AbbVie Disclosure Schedule shall be
deemed disclosure with respect to any other section or subsection
of the Allergan Disclosure Schedule or the AbbVie Disclosure
Schedule, as applicable, to which the relevance of such disclosure
would be reasonably apparent on its face, notwithstanding the
omission of a cross-reference to such other section or
subsections.
(b) The Parties agree that in no event shall any disclosure
contained in any part of any Allergan SEC Document or AbbVie SEC
Document entitled "Risk Factors", "Forward-Looking Statements",
"Cautionary Statement Regarding Forward-Looking Statements",
"Special Note Regarding Forward Looking Statements" or "Note
Regarding Forward Looking Statements" or any other disclosures in
any Allergan SEC Document or AbbVie SEC Document that are
cautionary, predictive or forward-looking in nature be deemed to be
an exception to (or a disclosure for purposes of or otherwise
qualify) any representations and warranties of any Party contained
in this Agreement.
Section 10.9 Remedies and Waivers. No
delay or omission by either Party in exercising any right, power or
remedy provided by Law or under this Agreement shall affect that
right, power or remedy or operate as a waiver of it. The
exercise or partial exercise of any right, power or remedy provided
by Law or under this Agreement shall not preclude any other or
further exercise of it or the exercise of any other right, power or
remedy.
Section 10.10 Severability.
(a) If any term, provision, covenant or condition of this
Agreement or the Acquisition is held by a court of competent
jurisdiction or other Governmental Entity to be invalid, void or
unenforceable, the Parties shall negotiate in good faith to modify
this Agreement or, as appropriate, the terms and conditions of this
Agreement and the Acquisition, so as to effect the original intent
of the Parties as closely as possible in an equitable manner in
order that the transactions contemplated hereby may be consummated
as originally contemplated to the fullest extent possible in
accordance with applicable Law.
(b) If at any time any provision of this Agreement is or
becomes illegal, invalid or unenforceable in any respect under the
Law of any jurisdiction, that shall not affect or impair (i) the
legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or (ii) the legality, validity
or enforceability under the Law of any other jurisdiction of that
or any other provision of this Agreement.
Section 10.11 No Partnership and No
Agency.
(a) Nothing in this Agreement and no action taken by the
Parties pursuant to this Agreement shall constitute, or be deemed
to constitute, a partnership, association, joint venture or other
co-operative entity between any of the Parties.
(b) Nothing in this Agreement and no action taken by the
Parties pursuant to this Agreement shall constitute, or be deemed
to constitute, either Party the agent of the other Party for any
purpose. No Party has, pursuant to this Agreement, any
authority or power to bind or to contract in the name of the other
Party to this Agreement.
Section 10.12 Costs and Expenses.
Except as otherwise provided in this Agreement (including
Section 7.9 hereof) and the Expenses Reimbursement Agreement,
all costs and expenses incurred in connection with this Agreement
shall be paid by the Party incurring such cost or expense, except
that (a) the Panel's document review fees shall be borne by AbbVie,
(b) the costs associated with the filing, printing, publication and
proposing of the Rule 2.5 Announcement shall be borne one hundred
percent (100%) by AbbVie, (c) the costs associated with the filing,
printing, publication and proposing of the Scheme Document, Proxy
Statement and any other materials required to be proposed to
Allergan Shareholders pursuant SEC rules, the Act or the Takeover
Rules shall be borne one hundred percent (100%) by Allergan, (d)
the filing fees incurred in connection with notifications with any
Governmental Entities under any Antitrust Laws, shall be borne one
hundred percent (100%) by AbbVie and (e) the cost incurred in
connection with soliciting proxies in connection with the Court
Meeting and the EGM shall be borne one hundred percent (100%) by
Allergan.
Section 10.13 Governing Law and
Jurisdiction.
(a) This Agreement and all Actions based upon, arising out
of or related to this Agreement or the transactions contemplated
hereby shall be governed by, and construed in accordance with, the
Laws of the State of Delaware; provided, however, that the
Acquisition and the Scheme and matters related thereto (including
matters related to the Takeover Rules) shall, to the extent
required by the Laws of Ireland, and the interpretation of the
duties of directors of Allergan shall, be governed by, and
construed in accordance with, the Laws of Ireland.
(b) Each of the Parties irrevocably agrees that the state
and federal courts sitting in the State of Delaware, and any
appellate courts therefrom, are to have exclusive jurisdiction to
settle any Action based upon, arising out of or related to this
Agreement or the transactions contemplated hereby and, for such
purposes, irrevocably submits to the exclusive jurisdiction of such
courts and waives, to the fullest extent permitted by Law, any
objection which any of them may now or hereafter have to the laying
of venue of, and the defense of an inconvenient forum to the
maintenance of, any such Action in any such court. Any Action
based upon, arising out of or related to this Agreement or the
transactions contemplated hereby shall therefore be brought in the
state and federal courts sitting in the State of Delaware, and any
appellate courts therefrom. Notwithstanding the forgoing, the
Scheme and matters related to the sanction thereof shall be subject
to the jurisdiction of the High Court and any appellate courts
therefrom.
(c) Each of the Parties acknowledges and irrevocably agrees
(i) that any Action (whether at Law, in equity, in contract,
in tort or otherwise) arising out of, or in any way relating to,
the Financing or the performance of services thereunder or related
thereto against or by any Financing Source in its capacity as such
shall be subject to the exclusive jurisdiction of any state or
federal court sitting in the Borough of Manhattan, New York, New
York, and any appellate court therefrom, and each Party hereto
submits for itself and its property with respect to any such Action
to the exclusive jurisdiction of such courts, (ii) not to
bring or permit any of its Affiliates to bring or support anyone
else in bringing any such Action in any other court, (iii) to
waive and hereby waive, to the fullest extent permitted by Law, any
objection which any of them may now or hereafter have to the laying
of venue of, and the defense of an inconvenient forum to the
maintenance of, any such Action in any such court, (iv) that a
final judgment in any such Action shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law and (v) that any such Action
shall be governed by, and construed in accordance with, the Laws of
the State of New York (it being expressly agreed that the Financing
Sources in their capacities as such shall be third party
beneficiaries of this Section 10.13(c) and shall be
entitled to enforce the provisions contained in this
Section 10.13(c) as if they were a party to this
Agreement).
(d) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE FINANCING, OR THE
PERFORMANCE OF SERVICES THEREUNDER OR RELATED THERETO (INCLUDING
ANY ACTION, PROCEEDING OR COUNTERCLAIM), INCLUDING IN ANY ACTION
AGAINST OR BY ANY FINANCING SOURCE IN ITS CAPACITY AS SUCH,
INCLUDING ANY ACTION DESCRIBED IN SECTION 10.13(C)(I) IN
ANY SUCH COURT DESCRIBED IN SECTION 10.13(C)(I) (IT BEING
EXPRESSLY AGREED THAT THE FINANCING SOURCES IN THEIR CAPACITIES AS
SUCH SHALL BE THIRD PARTY BENEFICIARIES OF THIS
Section 10.13(d) AND SHALL BE ENTITLED TO ENFORCE THE
PROVISIONS CONTAINED IN THIS Section 10.13(d) AS IF THEY WERE
A PARTY TO THIS AGREEMENT).
Section 10.14 Third Party
Beneficiaries.
Except:
(a) as provided in Section 7.3;
(b) as provided in Section 7.9(c);
(c) as provided in Section 10.5;
(d) as provided in Section 10.13(c);
(e) as provided in Section 10.13(d);
(f) as provided in this Section 10.14; and
(g) as provided in Section 10.15
this Agreement is not intended to confer upon any person other
than Allergan and the AbbVie Parties any rights or remedies under
or by reason of this Agreement.
Section 10.15 Waiver of Claims Against
Financing Sources. Without limiting in any respect the
liabilities of the Financing Sources to AbbVie or its Affiliates,
or the remedies of AbbVie or its Affiliates against the Financing
Sources under any other agreement to which they are both parties,
none of the Financing Sources shall have any liability to the
Parties or their Affiliates relating to or arising out of this
Agreement, whether at Law or equity, in contract, in tort or
otherwise, and neither the Parties nor any of their Affiliates will
have any rights or claims against the Financing Sources under this
Agreement. Notwithstanding anything herein to the contrary,
in no event shall Allergan or its Affiliates be entitled to seek
the remedy of specific performance of this Agreement against any of
the Financing Sources (it being expressly agreed that the Financing
Sources in their capacities as such shall be third party
beneficiaries of this Section 10.15 and shall be entitled to
enforce the provisions contained in this Section 10.15 as if
they were a party to this Agreement).
Section 10.16 Non Survival of
Representations and Warranties. The representations,
warranties, covenants and agreements contained in this Agreement
and in any certificate or other writing delivered pursuant hereto
shall not survive the Effective Time or the valid termination of
this Agreement pursuant to and in accordance with Article 9,
except that (i) Section 7.3 and Article 8 shall survive
the Effective Time, and (ii) Section 7.9(c),
Sections 9.1(b)-(d) and this Article 10 shall survive the
valid termination of this Agreement pursuant to and in accordance
with Article 9.
IN WITNESS
whereof the Parties have entered into this Agreement on the date
specified above.
GIVEN under the common seal
of ALLERGAN PLC
/s/ A. Robert D.
Bailey
Name: A. Robert D. Bailey
Title: EVP and Chief Legal Officer and Corporate Secretary
IN WITNESS
whereof the Parties have entered into this Agreement on the date
specified above.
SIGNED for and on behalf of
ABBVIE INC. by its authorized signatory:
/s/ Robert A.
Michael
Name: Robert A. Michael
Title: Senior Vice President, Chief Financial Officer
IN WITNESS whereof the Parties have entered into this
Agreement on the date specified above.
SIGNED for and on behalf of
VENICE SUBSIDIARY, LLC by its authorized signatory:
/s/ Scott T.
Reents
Name: Scott T. Reents
Title: Vice President
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