SC TO-T

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE TO

TENDER OFFER STATEMENT UNDER

SECTION 14(D)(1) OR 13(E)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

Immune Design Corp.

(Name of Subject Company — Issuer)

 

 

CASCADE MERGER SUB INC.

MERCK SHARP & DOHME CORP.

(Names of Filing Persons — Offerors)

 

 

Common Stock, par value $0.001 per share

(Title of Class of Securities)

45252L103

(CUSIP Number of Class of Securities)

Geralyn S. Ritter

Senior Vice President and Corporate Secretary

Merck & Co., Inc.

2000 Galloping Hill Road

Kenilworth, NJ 07033

(908) 740-4000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)

 

 

Copy to:

Barbara L. Becker

Saee Muzumdar

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, NY 10166

(212) 351-4035

 

 

CALCULATION OF FILING FEE

 

Transaction Valuation*

 

Amount of Filing Fee**

$296,454,450.39

 

$35,930.28

*

Estimated solely for purposes of calculating the filing fee. The transaction value was determined by adding (1) 48,363,046 shares of common stock of Immune Design Corp. (“IMDZ”), par value $0.001 per share (the “Shares”), plus 635,165 Shares issuable upon the settlement of awards of time-vesting restricted stock units issued under IMDZ’s 2014 Omnibus Incentive Plan and 2008 Equity Incentive Plan, multiplied by the offer price of $5.85 per Share, (2) 5,007,902 Shares issuable pursuant to outstanding options, multiplied by $1.89, which is the offer price of $5.85 per Share minus the weighted average exercise price for such options of $3.96 per Share, and (3) 74,306 Shares subject to outstanding purchase rights under IMDZ’s 2014 Employee Stock Purchase Plan, multiplied by $4.71, which is the offer price of $5.85 per Share minus the exercise price for such Shares of $1.14 per Share. The calculation of the transaction value is based on information provided by IMDZ.

**

The filing fee was calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended and Fee Rate Advisory #1 for Fiscal Year 2019, issued August 24, 2018, by multiplying the transaction valuation by 0.0001212.

 

Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

Amount Previously Paid:

   Not applicable.   

Form or Registration No.:

   Not applicable.   

Filing Party:

   Not applicable.   

Date Filed:

   Not applicable.   

 

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes to designate any transactions to which this statement relates:

 

 

third party tender offer subject to Rule 14d-l

 

issuer tender offer subject to Rule 13e-4

 

going-private transaction subject to Rule 13e-3

 

amendment to Schedule 13D under Rule 13d-2

Check the following box if the filing is a final amendment reporting the results of the tender offer.  ☐

If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:

 

 

Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

 

 

Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

 

 

 


This Tender Offer Statement on Schedule TO (this Schedule TO”) relates to the offer by Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of Merck Sharp & Dohme Corp. (“Parent”), and an indirect subsidiary of Merck & Co., Inc. (“Merck”), to purchase all outstanding shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), for $5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 5, 2019 (together with any amendments and supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (together with any amendments and supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”), copies of which are attached hereto as Exhibits (a)(1)(A) and (a)(1)(B), respectively. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of February 20, 2019, by and among Parent, Purchaser and IMDZ, a copy of which is attached hereto as Exhibit (d) and is incorporated herein by reference with respect to Items 4 through 11 of this Schedule TO. Unless otherwise indicated, references to sections in this Schedule TO are references to sections of the Offer to Purchase.

Item 1.    Summary Term Sheet.

The information set forth in the section of the Offer to Purchase titled “Summary Term Sheet” is incorporated herein by reference.

Item 2.    Subject Company Information.

(a)    The name of the subject company and the issuer of the securities to which this Schedule TO relates is Immune Design Corp., a Delaware corporation. IMDZ’s principal executive offices are located at 1616 Eastlake Ave. E., Suite 310 Seattle, WA 98102. The telephone number of IMDZ’s principal executive offices is (206) 682-0645.

(b)    This Schedule TO relates to all of the outstanding Shares. IMDZ has advised Purchaser and Parent that, as of the close of business on March 1, 2019, the most recent practicable date, there were an aggregate of (i) 48,363,046 Shares issued and outstanding, (ii) 5,007,902 Shares underlying outstanding and unexercised stock options, (iii) 49,537 Shares subject to outstanding purchase rights under IMDZ’s 2014 Employee Stock Purchase Plan and (iv) 635,165 Shares issuable upon the settlement of awards of time-vesting restricted stock units issued under IMDZ’s 2014 Omnibus Incentive Plan and 2008 Equity Incentive Plan.

(c)    The information set forth in Section 6 — “Price Range of Shares” of the Offer to Purchase is incorporated herein by reference.

Item 3.    Identity and Background of Filing Person.

(a)-(c)    This Schedule TO is filed by Purchaser and Parent. The information set forth in Section 9 — “Certain Information Concerning Purchaser and Parent” in the Offer to Purchase and in Schedule I of the Offer to Purchase is incorporated herein by reference.

Item 4.    Terms of the Transaction.

(a)    The information set forth in the Offer to Purchase is incorporated herein by reference.

Item 5.    Past Contacts, Transactions, Negotiations and Agreements.

(a), (b)    The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet” and “Introduction,” and Section 9 — “Certain Information Concerning Purchaser and Parent,” Section 11 — “Contacts and Transactions with IMDZ; Background of the Offer,” Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights” and Section 13 — “The Transaction Documents” of the Offer to Purchase is incorporated herein by reference.


Item 6.    Purposes of the Transaction and Plans or Proposals.

(a), (c)(1)-(7)    The information set forth in the sections of the Offer to Purchase titled “Summary Term Sheet” and “Introduction,” and Section 7 — “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations,” Section 11 — “Contacts and Transactions with IMDZ; Background of the Offer,” Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights” and Section 13 — “The Transaction Documents” of the Offer to Purchase is incorporated herein by reference.

Item 7.    Source and Amount of Funds or Other Consideration.

(a), (d)    The information set forth in Section 10 — “Source and Amount of Funds” of the Offer to Purchase is incorporated herein by reference.

(b)    Not applicable.

Item 8.    Interests in Securities of the Subject Company.

The information set forth in Section 9 — “Certain Information Concerning Purchaser and Parent,” Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights” and Section 13 — “The Transaction Documents” of the Offer to Purchase is incorporated herein by reference.

Item 9.    Persons/Assets Retained, Employed, Compensated or Used.

(a)    The information set forth in the section of the Offer to Purchase titled “Introduction” and Section 11 — “Contacts and Transactions with IMDZ; Background of the Offer” and Section 17 — “Fees and Expenses” of the Offer to Purchase is incorporated herein by reference.

Item 10.    Financial Statements.

Not applicable.

Item 11.    Additional Information.

(a)(1)    Except as disclosed in Items 1 through 10 above, there are no present or proposed material agreements, arrangements, understandings or relationships between (i) Parent, Purchaser, or any of their respective executive officers, directors, controlling persons or subsidiaries and (ii) IMDZ or any of its executive officers, directors, controlling persons or subsidiaries.

(a)(2)-(5)    The information set forth in the section of the Offer to Purchase titled “Summary Term Sheet” and Section 1 — “Terms of the Offer,” Section 7 — “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations,” Section 13 — “The Transaction Documents,” Section 15 — “ Conditions of the Offer” and Section 16 — “Certain Legal Matters; Regulatory Approvals” of the Offer to Purchase is incorporated herein by reference.

(c)    The information set forth in the Offer to Purchase and the Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)(A) and (a)(1)(B), respectively, to the extent not otherwise incorporated herein by reference, is incorporated herein by reference.


Item 12.    Exhibits.

 

Exhibit
No.

 

Description

(a)(1)(A)   Offer to Purchase, dated March 5, 2019
(a)(1)(B)   Letter of Transmittal
(a)(1)(C)   Notice of Guaranteed Delivery
(a)(1)(D)   Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(E)   Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
(a)(1)(F)   Summary Advertisement as published in the Wall Street Journal, dated March 5, 2019
(a)(2)   Not applicable
(a)(3)   Not applicable
(a)(4)   Not applicable
(a)(5)(A)   Joint Press Release issued by Merck & Co., Inc. and Immune Design Corp., dated as of February 21, 2019 (incorporated by reference from Exhibit 99.1 to Merck & Co., Inc.’s Schedule TO-C, filed on February 21, 2019)
(a)(5)(B)   Press Release issued by Merck & Co., Inc., dated as of March 5, 2019
(b)   Not applicable
(d)(1)   Agreement and Plan of Merger, dated as of February 20, 2019, by and among Immune Design Corp., Cascade Merger Sub Inc. and Merck Sharp & Dohme Corp.
(d)(2)  

Confidentiality Agreement, dated as of December 4, 2018, by and between Immune Design

Corp. and Merck Sharp & Dohme Corp.

(g)   Not applicable
(h)   Not applicable

Item 13.    Information Required by Schedule 13E-3.

Not applicable.


SIGNATURES

After due inquiry and to the best knowledge and belief of the undersigned, each of the undersigned certify that the information set forth in this statement is true, complete and correct.

 

Cascade Merger Sub Inc.

By:  

/s/ Faye C. Brown

  Name: Faye C. Brown
  Title:   Assistant Secretary

Merck Sharp & Dohme Corp.

By:  

/s/ Sunil A. Patel

  Name: Sunil A. Patel
  Title:   SVP, Corporate Development

Date: March 5, 2019

EX-99.(a)(1)(A)
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Exhibit (a)(1)(A)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

Immune Design Corp.

at

$5.85 Net Per Share

by

Cascade Merger Sub Inc.

a wholly owned subsidiary of

Merck Sharp & Dohme Corp. and Merck & Co., Inc.

 

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT ONE MINUTE FOLLOWING 11:59 PM, EASTERN TIME, ON APRIL 1, 2019, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation, is a wholly owned subsidiary of Merck Sharp & Dohme Corp., a New Jersey corporation (“Parent”), and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation. Purchaser is offering to purchase all outstanding shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), for $5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (together with any amendments or supplements hereto, the “Offer to Purchase”) and the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with this Offer to Purchase, the “Offer”). The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of February 20, 2019, by and among Purchaser, Parent and IMDZ (the “Merger Agreement”), which provides, among other things, that as soon as practicable following the consummation of the Offer, and without a vote of the stockholders of IMDZ in accordance with Section 251(h) of the General Corporation Law of the State of Delaware, as amended (the DGCL”), Purchaser will merge with and into IMDZ (the “Merger”), with IMDZ continuing as the surviving corporation and a wholly owned subsidiary of Parent. For the avoidance of doubt, references herein to the “Offer” refer to the Offer as it may be extended from time to time, unless indicated otherwise.

The board of directors of IMDZ has unanimously: (i) determined that the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, are advisable and fair to, and in the best interest of IMDZ and the IMDZ stockholders; (ii) agreed that the Merger shall be effected under Section 251(h) of the DGCL; (iii) approved the execution, delivery and performance by IMDZ of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

There is no financing condition to the Offer. However, the Offer is subject to various other conditions. A summary of the principal terms of the Offer appears on pages 1 through 7 of this Offer to Purchase. You should read this entire document carefully before deciding whether to tender your Shares in the Offer.

This transaction has not been approved or disapproved by the Securities and Exchange Commission (“SEC”) or any state securities commission, nor has the SEC or any state securities commission passed upon the fairness or merits of this transaction or upon the accuracy or adequacy of the information contained in this document. Any representation to the contrary is a criminal offense.

This Offer to Purchase and the related Letter of Transmittal contain important information, and you should carefully read both in their entirety before making a decision with respect to the Offer.

March 5, 2019


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IMPORTANT

If you desire to tender your Shares in the Offer, you must do one of the following prior to the expiration of the Offer:

 

   

If you hold your Shares through a broker, dealer, bank, trust company or other nominee, you must contact such person and give instructions that your Shares be tendered.

 

   

If you are a record holder (i.e., you hold certificates representing your Shares or hold your Shares in a book-entry/direct registration account maintained by IMDZ’s transfer agent (such Shares, “DRS Shares”), in each case in your name), you must complete and sign the enclosed Letter of Transmittal (or a manually signed facsimile thereof) according to its instructions and deliver it, together with any required signature guarantees, the certificates representing your Shares (except in the case of DRS Shares), and any other documents required by the Letter of Transmittal, to Computershare Trust Company, N.A., the depositary and paying agent for the Offer (the “Depositary & Paying Agent”), or tender your Shares by book-entry transfer. See Section 3 — “Procedure for Tendering Shares” of this Offer to Purchase for further details.

If you wish to tender your Shares in the Offer, but: (i) the certificates representing your Shares are not immediately available or cannot be delivered to the Depositary & Paying Agent prior to the expiration of the Offer; (ii) you cannot comply with the procedures for book-entry transfer prior to the expiration of the Offer; or (iii) your other required documents cannot be delivered to the Depositary & Paying Agent prior to the expiration of the Offer, you may still tender your Shares by complying with the guaranteed delivery procedures described in Section 3 — “Procedure for Tendering Shares” of this Offer to Purchase. Please call Broadridge Financial Solutions, the information agent for the Offer (the “Information Agent”), at (855) 793-5068 (toll free) or visit www.shareholder.broadridge.com for assistance.

* * *

Questions and requests for assistance may be directed to the Information Agent at its telephone number set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or from your broker, dealer, bank, trust company or other nominee. Copies of these materials may also be found at the website maintained by the SEC at www.sec.gov.


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TABLE OF CONTENTS

 

SUMMARY TERM SHEET

     1  

INTRODUCTION

     8  

THE OFFER

     10  

1.  Terms of the Offer

     10  

2.  Acceptance for Payment and Payment

     11  

3.  Procedure for Tendering Shares

     12  

4.  Withdrawal Rights

     15  

5.  Material U.S. Federal Income Tax Considerations

     16  

6.  Price Range of Shares

     18  

7.  Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations

     18  

8.  Certain Information Concerning IMDZ

     19  

9.  Certain Information Concerning Purchaser and Parent

     20  

10.  Source and Amount of Funds

     21  

11.  Contacts and Transactions with IMDZ; Background of the Offer

     22  

12.  Purpose of the Offer; Plans for IMDZ; Appraisal Rights

     23  

13.  The Transaction Documents

     25  

14.  Dividends and Distributions

     39  

15.  Conditions of the Offer

     39  

16.  Certain Legal Matters; Regulatory Approvals

     41  

17.  Fees and Expenses

     43  

18.  Miscellaneous

     44  

 

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SUMMARY TERM SHEET

Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation, is a wholly owned subsidiary of Merck Sharp & Dohme Corp. (“Parent”), a New Jersey corporation, and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation. Purchaser is offering to purchase all outstanding shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), for $5.85 per Share (the “Offer Price”), net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (together with any amendments or supplements hereto, the “Offer to Purchase”) and the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with this Offer to Purchase, the “Offer”). The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of February 20, 2019, by and among Parent, Purchaser and IMDZ (the “Merger Agreement”), which provides, among other things, that as soon as practicable following the consummation of the Offer, and without a vote of the stockholders of IMDZ in accordance with Section 251(h) of the General Corporation Law of the State of Delaware, as amended (the DGCL”), Purchaser will merge with and into IMDZ (the “Merger”), with IMDZ continuing as the surviving corporation and a wholly owned subsidiary of Parent. The following are answers to some questions that you, as a stockholder of IMDZ, may have about the Offer. We urge you to carefully read this Offer to Purchase and the accompanying Letter of Transmittal in their entirety because the information in this Summary Term Sheet is not complete and additional important information is contained in the remainder of this Offer to Purchase and the accompanying Letter of Transmittal. In this Offer to Purchase, unless the context otherwise requires, the terms “we,” “our” and “us” refer to Purchaser. For avoidance of doubt, references herein to the “Offer” refer to the Offer as it may be extended from time to time, unless indicated otherwise.

 

Securities Sought

All issued and outstanding shares of common stock, par value $0.001 per share, of Immune Design Corp.

 

Price Offered Per Share

$5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes

 

Scheduled Expiration of the Offer

One minute following 11:59 PM, Eastern Time, on April 1, 2019

 

Purchaser

Cascade Merger Sub Inc., a wholly owned subsidiary of Merck Sharp & Dohme Corp.

Who is offering to purchase my Shares?

The Offer is being made by Purchaser, a Delaware corporation recently formed for the purpose of making this Offer. We are a wholly owned subsidiary of Merck Sharp & Dohme Corp., which in turn, is a wholly owned subsidiary of Merck & Co., Inc. See the “Introduction” to this Offer to Purchase and Section 9 — “Certain Information Concerning Purchaser and Parent.”

What are you offering to purchase in the Offer?

We are offering to purchase all of the outstanding Shares of IMDZ not already owned by Purchaser or Parent. See the “Introduction” to this Offer to Purchase and Section 1 — “Terms of the Offer.”

How much are you offering to pay for my Shares and what is the form of payment?

We are offering to pay you $5.85 per Share, net to you in cash, without interest and less any applicable withholding taxes. If you are the record holder of your Shares (i.e., you hold certificates representing your Shares or hold your Shares in a book-entry/direct registration account maintained by IMDZ’s transfer agent (such

 

1


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Shares, “DRS Shares”), in each case in your name) and you directly tender your Shares to us in the Offer, you will not have to pay brokerage fees or similar expenses. If you own Shares through a broker, dealer, bank, trust company or other nominee, and such person tenders Shares on your behalf, your broker, dealer, bank, trust company or other nominee may charge you a fee for doing so. You should consult your broker, dealer, bank, trust company or other nominee to determine whether any charges will apply. See the “Introduction” to this Offer to Purchase.

How will you pay for Shares accepted in the Offer?

Parent will provide us with sufficient funds to pay for all Shares accepted for payment in the Offer. We will need approximately $300,400,000 to purchase all Shares validly tendered and not withdrawn in the Offer and to pay the consideration in connection with the Merger, which is expected to follow the successful completion of the Offer, and to pay related fees and expenses. The funds to pay for all Shares accepted for payment in the Offer and the consideration in connection with the Merger are expected to come from Parent’s available cash and cash equivalents on hand. Consummation of the Offer is not subject to any financing condition. See Section 10 —“Source and Amount of Funds.”

Is your financial condition relevant to my decision to tender my Shares in the Offer?

No. We do not believe that our financial condition is relevant to your decision to tender Shares in the Offer because the Offer is being made for all outstanding Shares, the form of payment consists solely of cash, and the Offer is not subject to any financing condition. We have sufficient funds, including by receipt of funds from Parent, to pay for all Shares tendered and accepted for payment in the Offer and to provide funding for the Merger that is expected to follow the Offer. See Section 10 — “Source and Amount of Funds.”

Will I have to pay any fees or commissions?

If you are the record owner of your Shares and you tender your Shares pursuant to the Offer, you will not have to pay brokerage fees or similar expenses. If you own your Shares through a broker or other nominee, your broker or nominee may charge you a fee for tendering Shares on your behalf. You should consult your broker or nominee to determine whether any charges will apply. See the “Introduction” to this Offer to Purchase.

What are the most significant conditions to the Offer?

The Offer is conditioned upon, among other things:

 

   

there being validly tendered and not withdrawn prior to the expiration of the Offer, a number of Shares that, together with the Shares then owned by Parent or any of its wholly owned subsidiaries (including Purchaser) (but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been received, as defined by Section 251(h)(6) of the DGCL), would represent one more than 50% of the total number of Shares that are then outstanding (the “Minimum Condition”); and

 

   

any consent, approval or clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended has been obtained, has been received or has terminated or expired, as the case may be (the “HSR Condition”).

Other conditions of the Offer are described in Section 15 — “Conditions of the Offer.” We can waive certain conditions to the Offer without the consent of IMDZ. We cannot, however, amend or waive the Minimum Condition without the consent of IMDZ. See also Section 16 — “Certain Legal Matters; Regulatory Approvals.” Consummation of the Offer is not subject to any financing condition.

 

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Is there an agreement governing the Offer?

Yes. IMDZ, Parent and Purchaser have entered into the Merger Agreement. The Merger Agreement provides, among other things, for the terms and conditions of the Offer and, following consummation of the Offer, the Merger. See the “Introduction” to this Offer to Purchase and Section 13 — “The Transaction Documents — The Merger Agreement.”

What does the board of directors of IMDZ (the “IMDZ Board”) recommend regarding the Offer?

The IMDZ Board unanimously:

 

   

determined that the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, are advisable and fair to, and in the best interest of IMDZ and the IMDZ stockholders;

 

   

agreed that the Merger shall be effected under Section 251(h) of the DGCL;

 

   

approved the execution, delivery and performance by IMDZ of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and

 

   

resolved to recommend that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

The factors considered by the IMDZ Board in making the determinations and recommendations described above and other matters relied upon by the IMDZ Board are described in IMDZ’s Solicitation/Recommendation Statement on Schedule 14D-9 (as defined below), which will be filed with the Securities and Exchange Commission (the “SEC”) and is being mailed to IMDZ stockholders, together with this Offer to Purchase. IMDZ stockholders are urged to carefully read IMDZ’s Solicitation/Recommendation Statement on Schedule 14D-9 in its entirety.

See Section 11 — “Contacts and Transactions with IMDZ; Background of the Offer — Acquisition Discussions.”

Have any IMDZ stockholders entered into agreements with you or your affiliates requiring them to tender their Shares in the Offer?

No.

How long do I have to tender my Shares in the Offer?

You may tender your Shares in the Offer until the Offer expires. The Offer is scheduled to expire at one minute following 11:59 PM, Eastern Time, on April 1, 2019. See Section 1 — “Terms of the Offer.” If you cannot deliver everything required to make a valid tender of your Shares to Computershare Trust Company, N.A., the depositary and paying agent for the Offer (the “Depositary & Paying Agent”), or comply with the procedures for book-entry transfer, prior to such time, you may be able to use the guaranteed delivery procedures, which are described in Section 3 — “Procedure for Tendering Shares.” In addition, if we extend the Offer as described below under “Introduction” to this Offer to Purchase, you will have an additional opportunity to tender your Shares. Please be aware that if your Shares are held by a broker, dealer, bank, trust company or other nominee, they may require advance notification before the expiration of the Offer.

When and how will I be paid for my tendered Shares?

Subject to the terms and conditions of the Offer, we will accept for payment and pay for all validly tendered and not properly withdrawn Shares promptly after the later of the expiration of the Offer and the satisfaction or

 

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waiver of the conditions to the Offer set forth in Section 15 — “Conditions of the Offer.” We can waive certain conditions to the Offer without the consent of IMDZ. We cannot, however, amend or waive the Minimum Condition without the consent of IMDZ.

We will pay for your validly tendered and not properly withdrawn Shares by depositing the purchase price with the Depositary & Paying Agent, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. In all cases, payment for tendered Shares will be made only after timely receipt by the Depositary & Paying Agent of certificates representing such Shares (except in the case of tendered DRS Shares) or a confirmation of a book-entry transfer of such Shares as described in Section 3 — “Procedure for Tendering Shares,” a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) and any other required documents for such Shares to be validly tendered.

Can the Offer be extended and, if so, under what circumstances?

Yes. Our ability to extend the Offer is subject to the terms of the Merger Agreement and applicable law. If, at the scheduled expiration of the Offer or the expiration of any extension of the Offer as described below, any condition to the Offer has not been satisfied or waived by Parent or us, and if the Merger Agreement has not been terminated pursuant to its terms, we may extend the Offer for successive periods of up to 10 business days per extension. We are obligated to extend the Offer (i) for successive periods of up to 10 business days per extension if the HSR Condition has not been satisfied, (ii) upon the request of IMDZ if any condition to the Offer (other than the Minimum Condition) has not been satisfied or waived by Parent or us for an additional period specified by IMDZ of up to 10 business days per extension, and (iii) upon the request of IMDZ if the Minimum Condition has not been satisfied, but all other conditions to the Offer have been satisfied or waived, on up to three occasions for an additional period specified by IMDZ of up to 10 business days per extension. In addition, if the Merger Agreement has not been terminated pursuant to its terms, we will extend the Offer for any period or periods of time required by any applicable law or any applicable rules, regulations, interpretations or positions of the SEC, its staff, or Nasdaq (as defined below). We will not be obligated to extend the Offer beyond the earliest to occur of (the “Extension Deadline”) (1) the valid termination of the Merger Agreement pursuant to its terms or (2) the first business day immediately following June 20, 2019. We will not be permitted to extend the Offer beyond the Extension Deadline without IMDZ’s prior written consent. See Section 1 — “Terms of the Offer,” Section 13 — “The Transaction Documents — The Merger Agreement — Extension of the Offer,” and Section 16 — “Certain Legal Matters; Regulatory Approvals.”

How will I be notified if the Offer is extended?

If we extend the Offer, we will inform the Depositary & Paying Agent of that fact and will make a public announcement of the extension, no later than the earlier of (i) 9:00 a.m., Eastern Time, or (ii) the first opening of the Nasdaq Global Market (“Nasdaq”), on the next business day after the day on which the Offer or any extension thereof was scheduled to expire.

Will you provide a subsequent offering period?

No. We do not anticipate a subsequent offering period following expiration of the Offer as we anticipate the Merger will be completed immediately following the acceptance of Shares for purchase in the Offer.

How do I tender my Shares?

If you desire to tender your Shares in the Offer, you must do one of the following prior to the expiration of the Offer:

 

   

If you hold your Shares through a broker, dealer, bank, trust company or other nominee, you must contact such person and give instructions that your Shares be tendered.

 

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If you are a record holder (i.e., you hold certificates representing your Shares or DRS Shares, in each case in your name), you must complete and sign the enclosed Letter of Transmittal (or a manually signed facsimile thereof) according to its instructions and deliver it, together with any required signature guarantees, the certificates representing your Shares (except in the case of DRS Shares) and any other documents required by the Letter of Transmittal, to the Depositary & Paying Agent or tender your Shares by book-entry transfer. See Section 3 — “Procedure for Tendering Shares” for further details.

If you wish to tender your Shares in the Offer, but (i) the certificates representing your Shares are not immediately available or cannot be delivered to the Depositary & Paying Agent prior to the expiration of the Offer, (ii) you cannot comply with the procedures for book-entry transfer prior to the expiration of the Offer or (iii) your other required documents cannot be delivered to the Depositary & Paying Agent prior to the expiration of the Offer, you may still tender your Shares by complying with the guaranteed delivery procedures described in Section 3 — “Procedure for Tendering Shares.”

Until what time can I withdraw tendered Shares?

You can withdraw some or all of the Shares that you previously tendered in the Offer at any time prior to the expiration of the Offer. Once we accept your tendered Shares for payment upon expiration of the Offer, however, you will no longer be able to withdraw them. See Section 4 — “Withdrawal Rights.”

How do I withdraw tendered Shares?

To withdraw your previously tendered Shares, you must deliver a written notice of withdrawal (or a facsimile) containing the required information to the Depositary & Paying Agent while you have the right to withdraw the Shares. If you tendered Shares by giving instructions to a broker, dealer, bank, trust company or other nominee, you must instruct such person to arrange to withdraw the Shares. See Section 4 — “Withdrawal Rights.”

Will the Merger follow the Offer if all Shares are not tendered in the Offer?

Yes. If we consummate the Offer, and accordingly acquire that number of Shares that, when added to the Shares then-owned beneficially by Parent and Purchaser and their respective subsidiaries, represents at least one Share more than 50% of the total number of Shares then outstanding, then, in accordance with the terms of the Merger Agreement, we will complete the Merger without a vote of the stockholders of IMDZ pursuant to Section 251(h) of the DGCL. Following consummation of the Merger, IMDZ will become a wholly owned subsidiary of Parent, and each remaining Share (other than any Shares held by Parent, Purchaser, any other subsidiary of Parent or IMDZ and any Shares held by any IMDZ stockholders who validly exercise their appraisal rights in connection with the Merger as described in Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights”) will be automatically converted into the right to receive the Offer Price, payable net to the holder in cash, without interest and less any applicable withholding taxes (the “Merger Consideration”). See the “Introduction” to this Offer to Purchase, Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights” and Section 13 — “The Transaction Documents — The Merger Agreement — The Merger.”

If I do not tender my Shares, how will they be affected by the Offer?

If the Merger is consummated, IMDZ stockholders who do not tender their Shares in the Offer (other than those who properly exercise their appraisal rights in connection with the Merger) will receive cash in an amount per Share equal to the Offer Price. Therefore, if the Merger is consummated, the only difference between tendering and not tendering your Shares is that tendering IMDZ stockholders will be paid earlier. See Section 7 — “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations.”

 

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Are appraisal rights available in either the Offer or the Merger?

Appraisal rights will not be available to you in connection with the Offer. However, you will be entitled to appraisal rights in connection with the Merger with respect to any Shares not tendered in the Offer, subject to and in accordance with the DGCL. Stockholders must properly perfect their right to seek appraisal under the DGCL in connection with the Merger in order to exercise appraisal rights. See Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights — Appraisal Rights.”

What will happen to my IMDZ stock options in the Offer?

The Offer is being made for Shares only and is not being made for any stock options to purchase Shares that were granted under any IMDZ stock option plans, whether vested or unvested (each such stock option, a “IMDZ Option”). Each IMDZ Option that is outstanding immediately prior to the Merger Effective Time will automatically accelerate and become fully vested and exercisable effective immediately prior to the Merger Effective Time, contingent upon the Merger Effective Time. As of the effective time of the Merger (the “Merger Effective Time”), by virtue of the Merger and without any further action on the part of the holders thereof, Parent, Purchaser or IMDZ, each unexpired and unexercised IMDZ Option, whether or not then exercisable or vested, that is outstanding immediately prior to the Merger Effective Time will be cancelled and converted into the right to receive an amount in cash equal to the product of (i) the total number of Shares subject to such IMDZ Option immediately prior to the Merger Effective Time, multiplied by (ii) the excess, if any, of (x) the Merger Consideration over (y) the exercise price payable per Share under such IMDZ Option, without interest and less any applicable withholding taxes. If the exercise price per Share under any IMDZ Option is equal to or greater than the Merger Consideration, then such IMDZ Option will be cancelled without any payment being made in respect of such IMDZ Option. See Section 13 — “The Transaction Documents — The Merger Agreement — Treatment of IMDZ Stock Options; Stock Plans.”

What will happen to my IMDZ restricted stock units in the Offer?

The Offer is being made for Shares only and is not being made for any restricted stock units granted under an IMDZ equity plan (each such award, a “IMDZ RSU”). Each IMDZ RSU that is outstanding as of immediately prior to the Merger Effective Time will automatically accelerate and become fully vested effective immediately prior to the Merger Effective Time, contingent upon the Merger Effective Time. As of the Merger Effective Time, by virtue of the Merger and without any further action on the part of the holders thereof, Parent, Purchaser or IMDZ, each IMDZ RSU will be automatically cancelled and converted into the right to receive the Merger Consideration in respect of each Share subject to such IMDZ RSU, less any applicable withholding taxes.

What will happen to my purchase rights under the IMDZ Employee Stock Purchase Plan in the Offer?

The Offer is being made for Shares only and is not being made for any options granted under the IMDZ 2014 Employee Stock Purchase Plan (the “ESPP”). Rather, (i) no new “offering period” will commence under the ESPP, (ii) payroll withholdings may not be increased under the ESPP for the current offering period, and (iii) the current offering period will terminate as of the Merger Effective Time. Upon the Merger Effective Time, employees’ accumulated contributions under the ESPP will be used to purchase Shares under the ESPP, and the Merger Consideration will be paid with respect to such Shares, less any applicable withholding taxes.

If the Offer is completed, will IMDZ continue as a public company?

If the Offer is completed, we will complete the Merger pursuant to Section 251(h) of the DGCL as soon as practicable following our acceptance for payment of Shares in the Offer. After completion of the Merger, Parent will own all of the outstanding capital stock of IMDZ, IMDZ will be delisted from Nasdaq and deregistered from the Exchange Act, and IMDZ will no longer be a public company. See Section 7 — “Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations.”

 

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What is the market value of my Shares as of a recent date?

On February 20, 2019, the last full trading day before we announced the Offer and the possible subsequent Merger, the closing price of the Shares reported on Nasdaq was $1.42 per Share. On March 4, 2019, the last full trading day before the date of this Offer to Purchase, the closing price of a Share on Nasdaq was $5.83. You should obtain current market quotations for Shares before deciding whether to tender your Shares in the Offer.

What are the federal income tax consequences of tendering my Shares pursuant to the Offer, or receiving payment for my Shares pursuant to the Merger?

In general, the tender of Shares for cash pursuant to the Offer, or the exchange of Shares for cash pursuant to the Merger, will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. You should consult your tax advisor about the tax consequences to you of tendering your Shares pursuant to the Offer, or exchanging your Shares for cash pursuant to the Merger, in light of your particular circumstances. See Section 5 — “Material U.S. Federal Income Tax Considerations.”

Whom can I talk to if I have questions about the Offer?

You can call the Information Agent (855) 793-5068 (toll free).

 

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To the Stockholders of Immune Design Corp.:

INTRODUCTION

Cascade Merger Sub Inc. (“Purchaser” “we,” “our” or “us”), a Delaware corporation, is a wholly owned subsidiary of Merck Sharp & Dohme Corp. (“Parent”), a New Jersey corporation, and an indirect subsidiary of Merck & Co. Inc., a New Jersey corporation. Purchaser is offering to purchase all outstanding shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), for $5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in this Offer to Purchase (together with any amendments or supplements hereto, this “Offer to Purchase”) and the accompanying Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with this Offer to Purchase, the “Offer”). For the avoidance of doubt, references herein to the “Offer” refer to the Offer as it may be extended from time to time, unless indicated otherwise.

You will not be required to pay brokerage fees, commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the sale of Shares pursuant to the Offer. However, you may be subject to U.S. federal backup withholding at the applicable statutory rate on the gross proceeds payable to you. See Section 3 — “Procedure for Tendering Shares — U.S. Federal Income Tax – Backup Withholding.” Stockholders with Shares held in street name by a broker, dealer, bank, trust company or other nominee should consult with their nominee to determine if they will be charged any transaction fees. We will pay all charges and expenses of Computershare Trust Company, N.A. (the “Depositary & Paying Agent”) and Broadridge Financial Solutions (the “Information Agent”) incurred in connection with the Offer. See Section 17 — “Fees and Expenses.”

We are making the Offer pursuant to an Agreement and Plan of Merger, dated as of February 20, 2019, by and among Parent, Purchaser and IMDZ (the “Merger Agreement”). The Merger Agreement provides, among other things, that as soon as practicable after the completion of the Offer and the satisfaction or waiver of all of the conditions to the Merger (as defined below), Purchaser will be merged with and into IMDZ (the “Merger”) without a vote of the stockholders of IMDZ in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with IMDZ continuing as the surviving corporation and a wholly owned subsidiary of Parent (the “Surviving Corporation”). At the effective time of the Merger (the “Merger Effective Time”), each outstanding Share (other than any Shares held by Parent, Purchaser, any other subsidiary of Parent and any Shares held by any IMDZ stockholders who validly exercise their appraisal rights in connection with the Merger as described in Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights”) will be automatically converted into the right to receive the Offer Price, net to the holder in cash, without interest and less any applicable withholding taxes. The Offer is subject to the satisfaction or waiver of certain conditions described in Section 15 — “Conditions of the Offer.” We can waive certain conditions to the Offer without the consent of IMDZ. We cannot, however, amend or waive the Minimum Condition (as defined below) without the consent of IMDZ. Section 13 — “The Transaction Documents — The Merger Agreement” contains a more detailed description of the Merger Agreement. Section 5 — “Material U.S. Federal Income Tax Considerations” describes certain material U.S. federal income tax consequences of the Offer and the Merger.

The board of directors of IMDZ (the “IMDZ Board”) has unanimously: (i) determined that the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, are advisable and fair to, and in the best interest of IMDZ and the IMDZ stockholders; (ii) agreed that the Merger shall be effected under Section 251(h) of the DGCL; (iii) approved the execution, delivery and performance by IMDZ of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

 

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The factors considered by the IMDZ Board in making the determinations and recommendations described above and other matters relied upon by the IMDZ Board are described in IMDZ’s Solicitation/Recommendation Statement on Schedule 14D-9, which will be filed with the Securities and Exchange Commission (the “SEC”) and is being mailed to IMDZ stockholders, together with this Offer to Purchase. IMDZ stockholders are urged to carefully read IMDZ’s Solicitation/Recommendation Statement on Schedule 14D-9.

The Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn prior to the expiration of the Offer, a number of Shares that, together with the Shares then owned by Parent or any of its wholly owned subsidiaries (including Purchaser) (but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been received, as defined by Section 251(h)(6) of the DGCL) would represent one more than 50% of the total number of Shares then outstanding (the “Minimum Condition”); and (ii) the expiration or termination, at or prior to the expiration of the Offer, of any applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the regulations promulgated thereunder (collectively, the “HSR Act”) (the “HSR Condition”). See Section 15 — “Conditions of the Offer” and Section 16 — “Certain Legal Matters; Regulatory Approvals — Antitrust Compliance.”

According to IMDZ, as of March 1, 2019, there were an aggregate of 48,363,046 Shares issued and outstanding. Accordingly, we anticipate that the Minimum Condition would be satisfied if approximately 24,181,524 Shares are validly tendered pursuant to the Offer and not withdrawn.

This Offer to Purchase does not constitute a solicitation of proxies, and Purchaser is not soliciting proxies in connection with the Offer or the Merger. If the Minimum Condition is satisfied and Purchaser consummates the Offer, Purchaser will consummate the Merger pursuant to Section 251(h) of the DGCL without the approval of the stockholders of IMDZ. See Section 13 — “The Transaction Documents — The Merger Agreement — Short-Form Merger Procedure.” The Offer is conditioned upon the fulfillment of the conditions described in Section 15 — “Conditions of the Offer.” We can waive certain conditions to the Offer without the consent of IMDZ. We cannot, however, amend or waive the Minimum Condition without the consent of IMDZ. The Offer will expire at one minute following 11:59 PM, Eastern Time, on April 1, 2019, unless we extend the Offer.

 

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THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION, AND YOU SHOULD CAREFULLY READ BOTH IN THEIR ENTIRETY BEFORE YOU MAKE A DECISION WITH RESPECT TO THE OFFER.

THE OFFER

 

1.

Terms of the Offer. Upon the terms and subject to the conditions set forth in the Offer and the Merger Agreement, we will accept for payment (the time of such acceptance is referred to herein as the “Offer Acceptance Time”) and thereafter pay the Offer Price for all Shares that are validly tendered and not properly withdrawn in accordance with the procedures set forth in Section 3 — “Procedure for Tendering Shares” prior to the Expiration Date. “Expiration Date” means one minute following 11:59 PM, Eastern Time, on April 1, 2019, unless extended, in which event “Expiration Date” means the latest time and date at which the Offer, as so extended, will expire.

The Offer is subject to the conditions set forth in Section 15 — “Conditions of the Offer,” which include, among other things, satisfaction of the Minimum Condition and the HSR Condition. We can waive certain conditions of the Offer without the consent of IMDZ. We cannot, however, amend or waive the Minimum Condition without the consent of IMDZ. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), we will purchase, as promptly as practicable after the expiration of the Offer, all Shares validly tendered and not withdrawn prior to the Expiration Date. If, on any scheduled Expiration Date, any condition to the Offer has not been satisfied or waived by Parent or us, and if the Merger Agreement has not been terminated pursuant to its terms, we may extend the Offer for successive periods of up to 10 business days per extension. We are obligated to extend the Offer (i) for successive periods of up to 10 business days per extension if the HSR Condition has not been satisfied, (ii) upon the request of IMDZ, if any condition to the Offer (other than the Minimum Condition) has not been satisfied or waived by Parent or us for an additional period specified by IMDZ of up to 10 business days per extension, and (iii) upon the request of IMDZ, if the Minimum Condition has not been satisfied, but all other conditions to the Offer have been satisfied or waived, on up to three occasions for an additional period specified by IMDZ of up to 10 business days per extension. In addition, if the Merger Agreement has not been terminated pursuant to its terms, we will extend the Offer for any period or periods of time required by any applicable law or any applicable rules, regulations, interpretations or positions of the SEC, its staff or Nasdaq. We will not be obligated to extend the Offer beyond the earliest to occur of (the “Extension Deadline”) (1) the valid termination of the Merger Agreement pursuant to its terms or (2) the first business day immediately following June 20, 2019 (the “End Date”). We will not be permitted to extend the Offer beyond the Extension Deadline without IMDZ’s prior written consent. During any extension of the Offer, all Shares previously validly tendered and not withdrawn will remain subject to the Offer and subject to your right to withdraw such Shares. See Section 4 — “Withdrawal Rights.”

We also reserve the right to waive, in whole or in part, any of the conditions to the Offer and to change the Offer Price; provided, however, that unless otherwise contemplated by the Merger Agreement or we receive IMDZ’s written consent, we cannot (i) decrease the Offer Price, (ii) change the form of consideration payable in the Offer (other than by adding consideration), (iii) decrease the maximum number of Shares sought to be purchased in the Offer, (iv) amend or modify any of the other conditions to the Offer set forth in Section 15 — “Conditions of the Offer” in a manner that adversely affects, or would reasonably be expected to adversely affect, any holder of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or delay the consummation of the Offer or prevent, delay or impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other transactions contemplated by the Merger Agreement, (v) waive or change the Minimum Condition, (vi) extend or otherwise change the expiration date of the Offer other than in accordance with the Merger Agreement or (vii) provide any “subsequent offering period” within the meaning of Rule 14d-11 promulgated under the Exchange Act.

 

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If we make a material change in the terms of the Offer or waive a material condition to the Offer, we will extend the Offer and disseminate additional tender offer materials to the extent required by applicable law. The minimum period during which a tender offer must remain open following material changes in the terms of the Offer, other than a change in price, a change in percentage of securities sought or a change in the dealer’s soliciting fee, depends upon the facts and circumstances, including the materiality of the changes. In a published release, the SEC has stated that in its view an offer must remain open for a minimum period of time following a material change in the terms of such offer and that the waiver of a condition such as the Minimum Condition is a material change in the terms of an offer. The release states that an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders and that if material changes are made with respect to information that approaches the significance of price and the percentage of securities sought or a change in the dealer’s soliciting fee, a minimum of 10 business days is generally required to allow adequate dissemination and investor response. Accordingly, if, prior to the Expiration Date, we increase the consideration to be paid for Shares in the Offer, and if the Offer is scheduled to expire at any time before the expiration of a period of 10 business days from, and including, the date that notice of such increase is first published, sent or given in the manner specified below, we will extend the Offer at least until the expiration of that period of 10 business days. If, prior to the Expiration Date, we increase the consideration being paid for Shares accepted for payment pursuant to the Offer, such increased consideration will be paid to all stockholders whose Shares are purchased pursuant to the Offer, whether or not such Shares were tendered prior to the announcement of the increase in consideration.

Any extension, termination or amendment of the Offer will be followed as promptly as practicable by a public announcement thereof consistent with the requirements of the SEC. In the case of an extension of the Offer, we will inform the Depositary & Paying Agent of that fact and will make a public announcement of such extension, no later than the earlier of (i) 9:00 a.m., Eastern Time, or (ii) the first opening of Nasdaq, on the next business day after the previously scheduled Expiration Date.

IMDZ has provided us with its stockholder list and security position listing for the purpose of disseminating the Offer to holders of Shares. In accordance with the Merger Agreement and applicable law, we will send this Offer to Purchase, the related Letter of Transmittal and other related documents to record holders of Shares and to brokers, dealers, banks, trust companies and other nominees whose names appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

Neither Parent nor Purchaser takes any responsibility for the accuracy or completeness of any information described herein contained in any Solicitation/Recommendation Statement on Schedule 14D-9 filed by IMDZ with the SEC, including information concerning IMDZ, its affiliates, officers or directors or any failure by IMDZ to disclose events or circumstances that may have occurred and may affect the accuracy or completeness of such information.

 

2.

Acceptance for Payment and Payment. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), we will accept for payment and pay for all Shares validly tendered and not properly withdrawn prior to the Expiration Date as promptly as practicable as permitted under applicable law after the later of (i) the Expiration Date and (ii) the satisfaction or waiver of the conditions of the Offer set forth in Section 15 — “Conditions of the Offer.” We can waive certain conditions to the Offer without the consent of IMDZ. We cannot, however, amend or waive the Minimum Condition without the consent of IMDZ. Notwithstanding the foregoing, subject to the terms and conditions of the Merger Agreement and any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act, we reserve the right, in our sole discretion and subject to applicable law, to delay the acceptance for payment or payment for Shares until all conditions to the Offer have been satisfied or waived. For information with respect to approvals that we are or may be required to obtain prior to the completion of the Offer, including under the HSR Act, see Section 16 — “Certain Legal Matters; Regulatory Approvals.”

 

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We will pay for Shares accepted for payment pursuant to the Offer by depositing the purchase price with the Depositary & Paying Agent, which will act as your agent for the purpose of receiving payments from us and transmitting such payments to you. Upon the deposit of such funds with the Depositary & Paying Agent, our obligation to make such payment will be satisfied and tendering stockholders must thereafter look solely to the Depositary & Paying Agent for payment of amounts owed to them by reason of the acceptance for payment of Shares pursuant to the Offer.

In all cases, Purchaser will pay for Shares accepted for payment pursuant to the Offer only after timely receipt by the Depositary & Paying Agent of: (i) certificates representing such Shares (except in the case of tendered Shares held in a book-entry/direct registration account (a “DRS Account”) maintained by IMDZ’s transfer agent (such Shares, “DRS Shares”)) or confirmation of a book-entry transfer of such Shares into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility (defined in Section 3 — “Procedure for Tendering Shares — Book-Entry Delivery”); (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), with all required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (defined in Section 3 — “Procedure for Tendering Shares — Book-Entry Delivery”) in lieu of the Letter of Transmittal; and (iii) any other documents required by the Letter of Transmittal. For a description of the procedures for tendering Shares pursuant to the Offer, see Section 3 — “Procedure for Tendering Shares.” Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or confirmations of book-entry transfer are actually received by the Depositary & Paying Agent.

For purposes of the Offer, we will be deemed to have accepted for payment tendered Shares when, as and if we give oral or written notice of our acceptance to the Depositary & Paying Agent.

Under no circumstances will we pay interest on the consideration paid for Shares accepted for purchase in the Offer, regardless of any extension of the Offer or any delay in making payment for such Shares.

If we do not accept for payment any tendered Shares pursuant to the Offer for any reason, or if you submit certificates representing more Shares than are tendered: (i) in the case of certificated Shares, we will return certificates (or issue new certificates) representing unpurchased or untendered Shares; (ii) in the case of DRS Shares, the unpurchased Shares will be credited to your DRS Account; or (iii) in the case of Shares delivered by book-entry transfer into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3 — “Procedure for Tendering Shares,” the unpurchased Shares will be credited to an account maintained at the Book-Entry Transfer Facility, without expense to you, promptly following the expiration, termination or withdrawal of the Offer.

We may assign the Merger Agreement to any Affiliate of Purchaser or Parent (provided that such assignment does not impede or delay the consummation of the transactions contemplated by the Merger Agreement); provided that no such assignment will relieve Parent of its obligations under the Merger Agreement.

 

3.

Procedure for Tendering Shares.

Valid Tender of Shares. Except as set forth below, in order for you to validly tender Shares in the Offer, the Depositary & Paying Agent must receive, at one of its addresses set forth on the back cover of this Offer to Purchase, prior to the Expiration Date, the Letter of Transmittal (or a manually signed facsimile thereof), properly completed according to its instructions and duly executed, together with any required signature guarantees or, in the case of a book-entry delivery of Shares, an Agent’s Message (as defined below) in lieu of the Letter of Transmittal and any other documents required by the Letter of Transmittal, and either: (i) you must deliver certificates representing the tendered Shares to the Depositary & Paying Agent (except in the case of DRS Shares), or you must cause your Shares to be tendered pursuant to the procedure for book-entry transfer set forth below and the Depositary & Paying Agent must receive timely confirmation of the book-entry transfer of such Shares (which confirmation must include an Agent’s Message if you have not delivered a Letter of Transmittal) into the Depositary & Paying Agent’s account at

 

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the Book-Entry Transfer Facility (as defined below), in each case prior to the Expiration Date; or (ii) you must comply with the guaranteed delivery procedures set forth below.

The method of delivery of Shares, including through a DRS Account or the Book-Entry Transfer Facility, the Letter of Transmittal and all other required documents is at your election and sole risk, and delivery will be deemed made only when actually received by the Depositary & Paying Agent (including, in the case of a book-entry delivery, by confirmation of a book-entry transfer of such Shares into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility). If certificates representing Shares are sent by mail, we recommend you use registered mail with return receipt requested, properly insured, in time to be received prior to the Expiration Date. In all cases, you should allow sufficient time to ensure timely delivery.

If you wish to tender your Shares pursuant to the Offer and you hold your Shares through a broker, dealer, bank, trust company or other nominee, you must contact such person and give instructions that your Shares be tendered prior to the Expiration Date.

Binding Agreement. The tender of Shares pursuant to any one of the procedures described in this Section 3 — “Procedure for Tendering Shares” will constitute your acceptance of the Offer, as well as your representation and warranty that you have the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal. Our acceptance for payment of Shares tendered by you pursuant to the Offer will constitute a binding agreement between us with respect to such Shares, upon the terms and subject to the conditions of the Offer.

Book-Entry Delivery. The Depositary & Paying Agent will establish an account with respect to the Shares for purposes of the Offer at The Depository Trust Company (the “Book-Entry Transfer Facility”) within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may deliver Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary & Paying Agent’s account in accordance with the procedures of the Book-Entry Transfer Facility for such transfer. However, although delivery of Shares may be effected through book-entry transfer, either: (i) a confirmation of a book-entry transfer into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility of all Shares tendered by book-entry transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees, or an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents must, in any case, be received by the Depositary & Paying Agent at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date; or (ii) the guaranteed delivery procedures described below must be complied with.

Required documents must be transmitted to and received by the Depositary & Paying Agent at one of its addresses set forth on the back cover page of this Offer to Purchase. Delivery of the Letter of Transmittal and any other required documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary & Paying Agent.

Agents Message” means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary & Paying Agent and forming a part of a book-entry confirmation stating that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce that agreement against the participant.

Signature Guarantees; Stock Powers. All signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program and the New York Stock Exchange, Inc. Medallion Signature Program or any other “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 under the Exchange Act) (each, an “Eligible

 

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Institution”), unless the Shares tendered are tendered (i) by a registered holder of Shares (which, for purposes of this Section, includes any participant in any of the Book-Entry Transfer Facility’s systems whose name appears on a security position listing as the holder of the Shares) who has not completed either the box labeled “Special Payment Instructions” or the box labeled “Special Delivery Instructions” on the Letter of Transmittal or (ii) for the account of an Eligible Institution. See Instructions 1 and 5 of the Letter of Transmittal.

If the Letter of Transmittal is signed by, payment of the purchase price is to be made to, or Shares not tendered or accepted for payment are to be returned in the name of, a person other than the registered holder of the Shares that were delivered, then any certificates representing such Shares must be properly endorsed for transfer or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on any such certificates representing such Shares, with the signatures on any such certificates or stock powers guaranteed by an Eligible Institution as described above. See Instructions 1 and 5 of the Letter of Transmittal.

If certificates representing the Shares are forwarded separately to the Depositary & Paying Agent, a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) must accompany each delivery of certificates for the Shares.

Guaranteed Delivery. If you wish to tender your Shares pursuant to the Offer but you cannot deliver the certificates representing such Shares and all other required documents to the Depositary & Paying Agent prior to the Expiration Date or you cannot complete the procedure for delivery by book-entry transfer on a timely basis, you may nevertheless tender such Shares if all of the following conditions are met:

 

   

such tender is made by or through an Eligible Institution;

 

   

a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by us with this Offer to Purchase is received by the Depositary & Paying Agent (as provided below) prior to the Expiration Date; and

 

   

the certificates representing all such tendered Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) together with, any required signature guarantees (or, in the case of a book-entry delivery of Shares, an Agent’s Message in lieu of the Letter of Transmittal) and any other required documents, are received by the Depositary & Paying Agent within two trading days after the date of execution of the Notice of Guaranteed Delivery. A “trading day” is any day on which Nasdaq is open for business.

The Notice of Guaranteed Delivery may be delivered or transmitted by email or mail to the Depositary & Paying Agent and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery.

U.S. Federal Income Tax — Backup Withholding. Under the U.S. federal income tax laws, the Depositary & Paying Agent generally will be required to backup withhold at the applicable statutory rate, currently 24%, from any payments made pursuant to the Offer unless you provide the Depositary & Paying Agent with your correct taxpayer identification number and certify that you are a United States person and are not subject to such backup withholding by completing the Internal Revenue Service Form W-9 included in the Letter of Transmittal or otherwise establish an exemption from backup withholding. If you are a nonresident alien or foreign entity, you generally will not be subject to backup withholding if you certify your foreign status on the appropriate Internal Revenue Service Form W-8. See Instruction 8 of the Letter of Transmittal and Section 5 – “Material U.S. Federal Income Tax Considerations” of this Offer to Purchase for a more detailed discussion of backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or credit against a holder’s U.S. federal income tax liability, provided the required information is timely furnished to the Internal Revenue Service.

 

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Appointment of Proxy. By executing and delivering a Letter of Transmittal (or, in the case of a book-entry transfer, an Agent’s Message in lieu of a Letter of Transmittal), you irrevocably appoint our designees as your attorneys-in-fact and proxies, with full power of substitution, in the manner set forth in the Letter of Transmittal to the full extent of your rights with respect to the Shares tendered and accepted for payment by us (and any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of this Offer to Purchase). All such powers of attorney and proxies are irrevocable and coupled with an interest in the tendered Shares. Such appointment is effective only upon our acceptance for payment of such Shares in accordance with the terms of the Offer. Upon such acceptance for payment, all prior powers of attorney, proxies and consents granted by you with respect to such Shares and other securities will, without further action, be revoked, and no subsequent powers of attorney or proxies may be given nor subsequent written consents executed (and, if previously given or executed, will cease to be effective). Upon such acceptance for payment, our designees will be empowered to exercise all your voting and other rights as they, in their sole discretion, may deem proper at any annual, special or adjourned meeting of IMDZ stockholders, by written consent or otherwise. We reserve the right to require that, in order for Shares to be validly tendered, immediately upon our acceptance for payment of such Shares, we are able to exercise full voting rights with respect to such Shares and other securities (including voting at any meeting of IMDZ stockholders then scheduled or acting by written consent without a meeting).

The foregoing powers of attorney and proxies are effective only upon acceptance for payment of Shares pursuant to the Offer. The Offer does not constitute a solicitation of proxies, absent a purchase of Shares, for any meeting of IMDZ stockholders.

Determination of Validity. We will resolve, in our sole discretion, all questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares, and our determination will be final and binding. We reserve the absolute right to reject any or all tenders of Shares that we determine not to be in proper form or the acceptance for payment of which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in any tender of Shares. No tender of Shares will be deemed to have been validly made until all defects and irregularities with respect to such tender have been cured or waived. None of Purchaser, the Depositary & Paying Agent, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in tenders or waiver of any such defect or irregularity or incur any liability for failure to give any such notification. Our interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding.

 

4.

Withdrawal Rights. Except as otherwise provided in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn (i) at any time before the Expiration Date and (ii) if Purchaser has not accepted for payment Shares tendered pursuant to the Offer by May 4, 2019, which is the 60th day after the date of the commencement of the Offer, at any time after such date, in each case by complying with the procedures set forth below.

If we extend the period of time during which the Offer is open, are delayed in accepting for payment or paying for Shares or are unable to accept for payment or pay for Shares pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary & Paying Agent may, on our behalf, retain all Shares tendered, and such Shares may not be withdrawn, except to the extent that you duly exercise withdrawal rights as described in this Section 4.

For your withdrawal to be effective, a written or facsimile transmission notice of withdrawal with respect to the Shares must be timely received by the Depositary & Paying Agent at one of its addresses set forth on the back cover of this Offer to Purchase, and the notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares, if different from that of the person who tendered such Shares. If the Shares to be withdrawn have been delivered to the Depositary & Paying Agent, a signed notice of withdrawal with (except in the case of Shares tendered by an Eligible Institution) signatures guaranteed by an Eligible Institution must be submitted before the release of such Shares. In addition, such notice must specify, in the

 

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case of Shares tendered by delivery of certificates, the serial numbers shown on the specific certificates evidencing the Shares to be withdrawn or, in the case of DRS Shares or Shares tendered by book-entry transfer, the name and number of the DRS Account or the account maintained at the Book-Entry Transfer Facility, respectively, to be credited with the withdrawn Shares. Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered. However, withdrawn Shares may be retendered at any time before the Expiration Date by following the procedures described in Section 3 —“Procedure for Tendering Shares.”

If you wish to withdraw Shares that were tendered by giving instructions to a broker, dealer, bank, trust company or other nominee, you must instruct such person to arrange to withdraw the Shares.

We will resolve, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal, and our determination will be final and binding. None of Purchaser, the Depositary & Paying Agent, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in any notice of withdrawal or waiver of any such defect or irregularity or incur any liability for failure to give any such notification.

The method for delivery of any documents related to a withdrawal is at the election and risk of the withdrawing shareholder. Any documents related to a withdrawal will be deemed delivered only when actually received by the Depositary & Paying Agent. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

 

5.

Material U.S. Federal Income Tax Considerations. The following discussion summarizes the material U.S. federal income tax consequences to U.S. Holders and Non-U.S. Holders (in each case, as defined below) who tender Shares and receive cash pursuant to the Offer, or pursuant to the Merger, and is based upon present law (which may change, possibly with retroactive effect). This discussion does not address the U.S. federal income tax consequences to beneficial owners of Shares exercising appraisal rights, if any. Due to the individual nature of tax consequences, you are urged to consult your tax advisors as to the specific tax consequences to you of tendering your Shares pursuant to the Offer, or exchanging your Shares pursuant to the Merger, including the effects of applicable state, local, foreign and other tax laws. The following discussion applies only if you hold your Shares as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment). This discussion does not purport to consider all aspects of U.S. federal income taxation that might be relevant to stockholders in light of their particular circumstances and does not apply to holders subject to special treatment under the U.S. federal income tax laws (such as, for example, dealers in securities, commodities or foreign currency, traders in securities who elect to apply a mark-to-market method of accounting, insurance companies, banks and certain other financial institutions, tax-exempt organizations, former citizens or residents of the United States, U.S. expatriates, stockholders that are pass-through entities for U.S. federal income tax purposes or the investors in such pass-through entities, regulated investment companies, real estate investment trusts, stockholders whose “functional currency” is not the U.S. dollar, persons subject to the alternative minimum tax, controlled foreign corporations, passive foreign investment companies, persons who hold Shares as part of a hedge, straddle, constructive sale, integrated or conversion transaction, and persons who acquired their Shares through the exercise of employee stock options or in other compensatory transactions). This discussion does not address any tax consequences arising under any state, local or foreign tax law, nor does it address any U.S. federal tax considerations other than those pertaining to the U.S. federal income tax. This discussion is based on the Code, the Treasury regulations promulgated under the Code, and administrative rulings and judicial decisions, all as in effect as of the date of this Offer to Purchase, and all of which are subject to change or differing interpretations at any time, with possible retroactive effect. We have not sought, nor do we expect to seek, any ruling from the Internal Revenue Service (the “IRS”) with respect to the matters discussed below. There can be no assurances that the IRS will not take a different position concerning the tax consequences of the tender of Shares in exchange for cash pursuant to the Offer, or pursuant to the Merger or that any such position would be

 

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  sustained. This discussion also assumes that the Shares are not United States real property interests within the meaning of the Code.

For purposes of the following discussion, a “U.S. Holder” means a beneficial owner of Shares that is for U.S. federal income tax purposes (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or an entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the law of the United States, any state thereof, or the District of Columbia, (iii) an estate that is subject to U.S. federal income tax on its worldwide income from all sources or (iv) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. A “Non-U.S. Holder” means a beneficial owner of Shares that is not a U.S. Holder or a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes).

If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds Shares, the tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Persons holding Shares through a partnership should consult their own tax advisors regarding the tax consequences of tendering the Shares in exchange for cash pursuant to the Offer, or pursuant to the Merger.

U.S. Holders. A U.S. Holder’s tender of Shares in exchange for cash pursuant to the Offer, or pursuant to the Merger, will be a taxable transaction for U.S. federal income tax purposes. In general, if a U.S. Holder exchanges Shares for cash pursuant to the Offer, or pursuant to the Merger, such holder will recognize gain or loss equal to the difference between the adjusted tax basis of their Shares and the amount of cash received in exchange therefor. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired for the same cost in a single transaction) tendered pursuant to the Offer. Such gain or loss generally will be capital gain or loss and generally will be long-term capital gain or loss if your holding period for the Shares is more than one year as of the date of the exchange of such Shares. Long-term capital gains recognized by noncorporate taxpayers generally are subject to U.S. federal income tax at preferential rates. The deduction of capital losses is subject to limitations.

An additional 3.8% tax will apply to certain U.S. Holders on the lesser of (i) each such U.S. Holder’s “net investment income” (including net capital gain) for a taxable year or (ii) the excess of such U.S. Holder’s modified adjusted gross income for such year over certain threshold amounts.

Non-U.S. Holders. The tender of Shares in exchange for cash pursuant to the Offer or pursuant to the Merger, generally will not be subject to U.S. federal income tax, unless: (i) the gain, if any, recognized on the exchange of the Shares for cash is effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the United States (and, if certain income tax treaties apply, is attributable to the Non-U.S. Holder’s permanent establishment or fixed base in the United States), in which event (a) the Non-U.S. Holder will be subject to U.S. federal income tax as described above under “U.S. Holders,” and (b) if the Non-U.S. Holder is a corporation, it may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) or (ii) the Non-U.S. Holder is an individual who was present in the United States for 183 days or more in the taxable year of sale and certain other conditions are met, in which event the Non-U.S. Holder will be subject to tax at a rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) on the gain from the exchange of the Shares net of U.S.-source losses from sales or exchanges of other capital assets recognized during the year, provided that such Non-U.S. Holder has timely filed United States federal income tax returns with respect to such losses.

Information Reporting and Backup Withholding. Proceeds received by U.S. Holders and Non-U.S. Holders from the sale of Shares pursuant to the Offer, or pursuant to the Merger generally are subject to information reporting and may be subject to backup withholding at the applicable statutory rate (currently 24%) if the stockholder or other payee fails to provide a valid taxpayer identification number and comply with certain certification procedures or otherwise establish an exemption from backup withholding. Backup

 

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withholding is not an additional federal income tax. Rather, the federal income tax liability of the person subject to backup withholding will be reduced by the amount of tax withheld, and if withholding results in an overpayment of taxes, a refund may generally be obtained, provided that the required information is timely furnished to the IRS. See Section 3 — “Procedure for Tendering Shares — U.S. Federal Income Tax– Backup Withholding.”

 

6.

Price Range of Shares. The Shares are listed and principally traded on Nasdaq under the symbol “IMDZ.” The following table sets forth the high and low sales prices per Share on Nasdaq, as reported in published financial sources, for the periods indicated:

 

Year Ended December 31, 2018:

   High      Low  

Fourth Quarter

   $ 3.48      $ 1.10  

Third Quarter

   $ 5.05      $ 3.05  

Second Quarter

   $ 4.90      $ 3.00  

First Quarter

   $ 4.25      $ 2.80  

 

Year Ended December 31, 2017:

   High      Low  

Fourth Quarter

   $ 11.10      $ 3.50  

Third Quarter

   $ 13.05      $ 7.70  

Second Quarter

   $ 11.10      $ 5.45  

First Quarter

   $  7.60      $  5.00  

 

Year Ended December 31, 2016:

   High      Low  

Fourth Quarter

   $ 8.75      $ 4.50  

Third Quarter

   $ 8.44      $ 6.02  

Second Quarter

   $ 16.94      $ 7.52  

First Quarter

   $ 19.91      $ 7.90  

On February 20, 2019, the last full trading day before the announcement of the Offer and the Merger, the reported closing sales price per Share on Nasdaq in published financial sources was $1.42. The price paid in the Offer represents a 312% premium to the closing price of $1.42 on February 20, 2019. On March 4, 2019, the last full trading day before the date of this Offer to Purchase, the reported closing sales price per Share on Nasdaq was $5.83. Before deciding whether to tender your Shares in the Offer, you should obtain a current market quotation for the Shares.

 

7.

Possible Effects of the Offer on the Market for the Shares; Stock Exchange Listing(s); Registration under the Exchange Act; Margin Regulations.

Possible Effects of the Offer on the Market for the Shares. If the Offer is successful, there will be no market for the Shares because Purchaser intends to consummate the Merger as promptly as practicable following the Offer Acceptance Time.

Stock Exchange Listing. The Shares are currently listed on Nasdaq. Immediately following the consummation of the Merger (which is expected to occur as promptly as practicable following the Offer Acceptance Time), the Shares will no longer meet the requirements for continued listing on Nasdaq because the only stockholder will be Purchaser. Immediately following the consummation of the Merger, we intend to cause IMDZ to delist the Shares from Nasdaq.

Registration under the Exchange Act. The Shares are currently registered under the Exchange Act. However, our purchase of the Shares pursuant to the Offer may cause the Shares to become eligible for deregistration under the Exchange Act. Registration of the Shares under the Exchange Act may be terminated upon application by IMDZ to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. We intend to cause IMDZ to apply for termination of registration of the Shares under the Exchange Act as soon as such requirements for such delisting and termination are met following the Merger Effective Time. Termination of registration of the Shares under

 

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the Exchange Act would substantially reduce the information required to be furnished by IMDZ to holders of Shares and to the SEC and would cause IMDZ to no longer be subject to certain provisions of the Exchange Act, including the short-swing profit recovery provisions of Section 16(b) thereof, the requirement to furnish a proxy statement in connection with a stockholders’ meeting pursuant to Section 14(a) thereof and the related requirement to furnish an annual report to stockholders, and the requirements of Rule 13e-3 thereunder with respect to “going private” transactions. Furthermore, “affiliates” of IMDZ and persons holding “restricted securities” of IMDZ may be deprived of the ability to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended. If registration of the Shares under the Exchange Act is terminated, the Shares will no longer be “margin securities” or eligible for stock exchange listing.

If registration of the Shares under the Exchange Act is not terminated prior to the Merger, then such registration will be terminated following completion of the Merger.

Margin Regulations. The Shares are currently “margin securities” under the regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which allows the Shares to be used as collateral for loans made by brokers. Following our purchase of Shares in the Offer, and depending upon factors similar to those described above regarding securities exchange listing and market quotations, the Shares may no longer constitute “margin securities” for purposes of the Federal Reserve Board’s margin regulations and could no longer be eligible to be used as collateral for loans made by brokers.

 

8.

Certain Information Concerning IMDZ.

IMDZ was originally incorporated in the State of Delaware on February 20, 2008 under the name Vaccsys, Inc. IMDZ’s name was changed to “Immune Design Corp.” pursuant to a Certificate of Amendment of Certificate of Incorporation filed in Delaware on July 10, 2008. IMDZ’s principal executive offices are located at 1616 Eastlake Ave. E., Suite 310 Seattle, WA 98102. The telephone number of IMDZ’s principal executive offices is (206) 682-0645.

Except as specifically set forth herein, the information concerning IMDZ contained in this Offer to Purchase has been taken from or is based upon information furnished by IMDZ or its representatives or upon publicly available documents and records on file with the SEC. The summary information set forth below is qualified in its entirety by reference to IMDZ’s public filings with the SEC (which may be obtained and inspected as described below) and should be considered in conjunction with the more comprehensive financial and other information in such reports and other publicly available information. We have no knowledge indicating that any statements contained herein based on such documents and records are untrue. However, we do not assume any responsibility for the accuracy or completeness of the information concerning IMDZ, whether furnished by IMDZ or contained in such documents and records, or for any failure by IMDZ to disclose events which may have occurred or which may affect the significance or accuracy of any such information but are unknown to us.

IMDZ is a late-stage immunotherapy company employing next-generation, diversified in vivo approaches designed to enable the body’s immune system to fight disease. Although IMDZ believes its approaches have broad potential across multiple therapeutic areas, IMDZ is focused in oncology and has designed its technologies to activate the immune system’s natural ability to generate and/or expand tumor-specific cytotoxic T cells, or CTLs, while also enhancing other immune effectors, to fight cancer via distinct mechanisms. G100, its lead product candidate, uses the body’s immune system in different ways that, it believes, address the shortcomings of other therapies and have the potential to treat a broad patient population either as monotherapies or in combination with other mechanisms of action.

Additional Information. IMDZ is subject to the informational and reporting requirements of the Exchange Act and in accordance therewith files and furnishes periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. You may read and copy any such reports, statements or other information at the SEC’s Public Reference Room located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information

 

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regarding the operation of the Public Reference Room. IMDZ’s filings are also available to the public from commercial document retrieval services and at the SEC’s website at http://www.sec.gov.

 

9.

Certain Information Concerning Purchaser and Parent.

Purchaser is a Delaware corporation incorporated on February 11, 2019, with principal executive offices at One Merck Drive, P.O. Box 100, Whitehouse Station, New Jersey 08889. The telephone number of Purchaser at such office is (908) 423-1000. To date, we have not engaged in any activities other than those activities incidental to our formation, entry into the Merger Agreement and commencement of the Offer. Purchaser is a wholly owned subsidiary of Parent.

Parent was incorporated in New Jersey in 1935. Its principal executive offices are located at One Merck Drive, P.O. Box 100, Whitehouse Station, New Jersey 08889. The telephone number of Parent at such office is (908) 423-1000. Parent is a wholly owned subsidiary of Merck & Co., Inc., a New Jersey corporation (“Merck”), which is a global health care company that delivers innovative health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. Merck’s operations are principally managed on a products basis and include four operating segments, which are the pharmaceutical, animal health, healthcare services and alliances segments. The pharmaceutical segment includes human health pharmaceutical and vaccine products. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. Merck sells these human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed health care providers such as health maintenance organizations, pharmacy benefit managers and other institutions. Human health vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices. Merck sells these human health vaccines primarily to physicians, wholesalers, physician distributors and government entities. Merck also has an animal health segment that discovers, develops, manufactures and markets animal health products, including pharmaceutical and vaccine products, for the prevention, treatment and control of disease in all major livestock and companion animal species, which Merck sells to veterinarians, distributors and animal producers. The healthcare services segment provides services and solutions that focus on engagement, health analytics and clinical services to improve the value of care delivered to patients. The alliances segment primarily includes results from Merck’s relationship with AstraZeneca LP related to sales of Nexium and Prilosec, which concluded in 2018.

The name, business address, current principal occupation or employment, five-year employment history and citizenship of each director and executive officer of Parent and Purchaser are set forth on Schedule I hereto.

During the last five years, none of Parent or Purchaser or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of such laws.

Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, (i) none of Parent or Purchaser or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of Parent or Purchaser or any of the persons so listed beneficially owns or has any right to acquire, directly or indirectly, any Shares and (ii) none of Parent or Purchaser or, to the best knowledge of Parent and Purchaser, any of the persons or entities referred to in Schedule I hereto nor any director, executive officer or subsidiary of any of the foregoing has effected any transaction in respect of any Shares during the past 60 days. Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent or Purchaser or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of IMDZ (including, but not limited to, any contract, arrangement, understanding or

 

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relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss, or the giving or withholding of proxies, consents or authorizations).

On August 10, 2015, IMDZ announced it had entered into two clinical trial collaborations with Merck to evaluate two immuno-oncology investigational agents, G100 and LV305, each separately combined with KEYTRUDA® (pembrolizumab), Merck’s anti-PD-1therapy, in Phase 1 trials in patients with non-Hodgkin’s lymphoma (NHL) and melanoma, respectively. In the first collaboration, Merck will contribute KEYTRUDA® (pembrolizumab), its anti-PD-1 therapy, to both Immune Design’s planned G100 Phase 1b/2 clinical trial in patients with Non-Hodgkin’s Lymphoma, as well as an LV305 Phase 1 expansion arm in melanoma patients who have an inadequate response to anti-PD1 therapy. Except as set forth in this Offer to Purchase, none of Purchaser or Parent or, to the best knowledge of Purchaser and Parent, any of the persons listed in Schedule I hereto, has had any other business relationship or transaction with IMDZ or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer.

Except as described elsewhere in this Offer to Purchase, there have been no material contacts, negotiations or transactions between Parent or any of its subsidiaries or, to the knowledge of Purchaser and Parent, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and IMDZ or its affiliates, on the other hand, concerning a merger, consolidation, acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets during the two years prior to the date of this Offer to Purchase.

We do not believe our financial condition or the financial condition of Parent is relevant to your decision whether to tender your Shares in the Offer because: (i) the Offer is being made for all outstanding Shares solely for cash; (ii) consummation of the Offer is not subject to any financing condition; (iii) if we consummate the Offer, we expect to acquire all remaining Shares for the same cash price in the Merger; and (iv) Parent will have, and will arrange for us to have, sufficient funds to purchase all Shares validly tendered and not properly withdrawn in the Offer and to acquire the remaining outstanding Shares in the Merger.

Each of Parent and Purchaser disclaims that it is an “affiliate” of IMDZ within the meaning of Rule 13e-3 under the Exchange Act.

Additional Information. Merck is subject to the informational requirements of the Exchange Act and in accordance therewith files periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Merck is required to disclose in such proxy statements certain information, as of particular dates, concerning its directors and officers, their remuneration, stock options granted to them, the principal holders of its securities and any material interests of such persons in transactions with Merck. Such reports, proxy statements and other information are available for inspection and copying at the offices of the SEC in the same manner as set forth with respect to IMDZ in Section 8 — “Certain Information Concerning IMDZ.”

 

10.

Source and Amount of Funds.

We will require approximately $300,400,000 to purchase all Shares validly tendered and not properly withdrawn in the Offer, to pay the consideration in respect of Shares converted in the Merger into the right to receive the same per Share amount paid in the Offer and to pay related fees and expenses. Parent will provide us with sufficient funds to satisfy these obligations. The funds to pay for all Shares accepted for payment in the Offer and the consideration in connection with the Merger are expected to come from Parent’s cash and cash equivalents on hand. Consummation of the Offer is not subject to any financing condition.

 

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11.

Contacts and Transactions with IMDZ; Background of the Offer.

Acquisition Discussions.

From time to time in the ordinary course of business, Merck and Parent evaluate various business opportunities to enhance shareholder value. These evaluations have included periodic assessments of potential strategic transactions to strengthen Merck’s existing business.

In May 2018, at an Infectious Disease and Vaccine Symposium sponsored by Merck, representatives of IMDZ and Merck conducted initial discussions regarding a potential licensing transaction.

On June 26, 2018, Dr. Jan Henrik ter Meulen, the Chief Scientific Officer of IMDZ, delivered a confidential presentation at Merck regarding the GLA adjavant. In July 2018, representatives of IMDZ and Merck began discussions regarding a potential licensing transaction. In early September 2018, Parent proposed terms for a possible license and the parties continued discussions with respect to the potential license through mid- October 2018.

On October 21, 2018, Dr. Roger Perlmutter, Executive Vice President and President at Merck Research Laboratories, met with Dr. Carlos Paya, President and Chief Executive Officer of IMDZ, during a scientific conference to further discuss a potential licensing transaction. At this meeting, Dr. Perlmutter and Dr. Paya also discussed the possibility of IMDZ being acquired by Merck. Dr. Paya communicated that IMDZ was not for sale, especially within the range of its then-current trading price. Dr. Perlmutter did not provide a specific potential price during this meeting.

On October 29, 2018, Dr. Perlmutter met with representatives of a significant stockholder of IMDZ to discuss their receptivity to the possibility of an acquisition of IMDZ by Merck.

On November 10, 2018, representatives of Merck reached out to Dr. Paya to extend a verbal offer for Merck to acquire IMDZ. Following that discussion, on November 12, 2018, Parent submitted an unsolicited non-binding indication of interest to the IMDZ Board to acquire IMDZ for $200,000,000 in cash with the possibility of two additional contingent value rights payments of $85,000,000 each based on the achievement of certain regulatory approvals, which valuation was based upon Parent’s perceived value of IMDZ’s research programs.

On November 19, 2018, in response to a request from IMDZ, Merck submitted a revised non-binding indication of interest to acquire IMDZ for $225,000,000 in cash at closing with no contingent value rights payments, also based upon Parent’s perceived value of IMDZ’s research programs.

On November 26, 2018, in response to a request from IMDZ, Merck sent a non-binding indication of interest to Dr. Paya proposing to acquire 100% of the Shares at a purchase price equal to $5.85 per Share based on the enterprise value of IMDZ and certain financial and other operating assumptions regarding IMDZ, which proposal was subject to completion of confirmatory due diligence and certain other conditions set forth therein.

On December 4, 2018, Parent and IMDZ entered into a Confidentiality Agreement (the “Confidentiality Agreement”), permitting the parties to disclose confidential information to one another for the purpose of exploring a potential transaction. The Confidentiality Agreement contains a customary standstill provision restricting certain actions by each party. Following the execution of the Confidentiality Agreement, IMDZ provided to us confidential information, which we reviewed through late December 2018. Parent and its advisors conducted detailed business, scientific, financial, regulatory, intellectual property and legal due diligence investigations of IMDZ and its business and operations through mid-February 2019.

On January 23, 2019, IMDZ, through its legal counsel, Cooley LLP, provided Parent with a draft of the Merger Agreement.

From January 23, 2019 to February 20, 2019, Parent and IMDZ negotiated the Merger Agreement and related documentation.

 

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On February 20, 2019, the Merger Agreement was executed. The following day, February 21, 2019, IMDZ and Merck issued a joint press release announcing the entry into the Merger Agreement.

On March 5, 2019, we commenced the Offer in accordance with the Merger Agreement.

 

12.

Purpose of the Offer; Plans for IMDZ; Appraisal Rights.

Purpose of the Offer; Plans for IMDZ. The purpose of the Offer and the Merger is to acquire control of, and the entire equity interest in, IMDZ. The Offer is the first step in the acquisition of IMDZ and is intended to facilitate the acquisition of all of the Shares. The purpose of the Merger is to acquire all Shares of IMDZ not purchased pursuant to the Offer or otherwise. The Merger will be effected pursuant to Section 251(h) of the DGCL.

If the Offer is consummated, we will not seek a vote of the remaining public stockholders of IMDZ before effecting the Merger. Section 251(h) of the DGCL provides that following consummation of a successful tender offer for a public corporation (the shares of which are listed on a national securities exchange or held of record by more than 2,000 holders), and subject to certain statutory provisions, if the acquirer holds at least the amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger for the target corporation, and the other stockholders receive the same consideration for their stock in the merger as was payable in the tender offer, the acquirer can effect a merger without the vote of the other stockholders of the target corporation. Accordingly, if we consummate the Offer, we will effect the closing of the Merger without a vote of the stockholders of IMDZ in accordance with Section 251(h) of the DGCL.

If we accept Shares for payment pursuant to the Offer, we will obtain control over the management of IMDZ and the IMDZ Board shortly thereafter. Based on available information, we are conducting a detailed review of IMDZ and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel and will consider what, if any, changes would be desirable in light of the circumstances that exist upon completion of the Offer. We will continue to evaluate the business and operations of IMDZ during the pendency and after the consummation of the Offer and will take such actions as we deem appropriate under the circumstances then existing. Thereafter, we intend to review such information as part of a comprehensive review of IMDZ’s business, operations, capitalization and management with the goal of optimizing development of IMDZ’s potential in conjunction with Parent’s existing businesses. Possible changes could include changes to IMDZ’s business, corporate structure, charter, bylaws, capitalization, board of directors or management.

Except as set forth in this Offer to Purchase, including as contemplated in this Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights”, Parent and Purchaser have no present plans or proposals that would relate to or result in (i) any extraordinary corporate transaction involving IMDZ (such as a merger, reorganization, liquidation, relocation of any operations or sale or other transfer of a material amount of assets), (ii) any sale or transfer of a material amount of assets of IMDZ, (iii) any material change in IMDZ’s capitalization or dividend policy, (iv) any other material change in IMDZ’s corporate structure or business, (v) changes to the management of IMDZ or the IMDZ Board, (vi) a class of securities of IMDZ being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association or (vii) a class of equity securities of IMDZ being eligible for termination of registration pursuant to Section 12(g) of the Exchange Act.

To the best knowledge of Purchaser and Parent, except for certain pre-existing agreements to be described in the Schedule 14D-9, no employment, equity contribution, or other agreement, arrangement or understanding between any executive officer or director of IMDZ, on the one hand, and Parent, Purchaser or IMDZ, on the other hand, existed as of the date of the Merger Agreement, and neither the Offer nor the Merger is conditioned upon any executive officer or director of IMDZ entering into any such agreement, arrangement or understanding. It is possible that certain members of IMDZ’s current management team will enter into new employment arrangements with IMDZ after the completion of the Offer and the Merger. Any such arrangements with the existing management team are currently expected to be entered into after the

 

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completion of the Offer and will not become effective until the time the Merger is completed, if at all. There can be no assurance that any parties will reach an agreement on any terms, or at all. The board of directors and officers of the Surviving Corporation at and immediately following the Merger Effective Time will consist of the members of the board of directors and officers, respectively, of Purchaser as of the date hereof. At the Merger Effective Time, the certificate of incorporation and bylaws of the Surviving Corporation will each be amended and restated in their entirety so as to read in the form set forth on Exhibit B and Exhibit C, respectively, to the Merger Agreement.

Appraisal Rights. Appraisal rights are not available to the holders of Shares in connection with the Offer. However, if the Merger is consummated, each holder of Shares at the Merger Effective Time who (i) did not tender his or her Shares in connection with the Offer and (ii) complies with the applicable statutory procedures under Section 262 of the DGCL, will be entitled to receive a judicial determination of the fair value of such holder’s Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger and instead of any consideration otherwise payable to such holder for Shares on the terms and subject to the conditions of the Merger Agreement or in connection with the Offer) and to receive payment of such judicially determined amount in cash, together with such rate of interest, if any, as the Delaware court may determine for Shares held by such holder. Unless the Delaware court, in its discretion, determines otherwise for good cause shown, such rate of interest will be five percent over the Federal Reserve discount rate (including any surcharge) as established from time to time between the Merger Effective Time and the date of payment and will be compounded quarterly.

Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the price paid in the Offer and the market value of the Shares. Holders of Shares should recognize that the value so determined could be higher or lower than the price per Share paid pursuant to the Offer or the per Share price to be paid in the Merger. Moreover, IMDZ may argue in an appraisal proceeding that, for purposes of such a proceeding, the fair value of the Shares is less than the price paid in the Offer and the Merger. For the avoidance of doubt, Parent, Purchaser and IMDZ have agreed and acknowledged that in any appraisal proceeding described herein and to the fullest extent permitted by applicable law, the fair value of the Shares subject to the appraisal proceeding will be determined in accordance with Section 262 of the DGCL.

Under Section 262 of the DGCL, where a merger is approved under Section 251(h), either a constituent corporation before the effective date of the merger, or the Surviving Corporation within 10 days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of Section 262 of the DGCL. The Schedule 14D-9 will constitute the formal notice of appraisal rights under Section 262 of the DGCL.

As will be described more fully in the Schedule 14D-9, if a stockholder elects to exercise appraisal rights under Section 262 of the DGCL, such stockholder must do all of the following: (i) within the later of the consummation of the Offer and 20 days after the mailing of the Schedule 14D-9, deliver to IMDZ a written demand for appraisal of Shares held, which demand must reasonably inform IMDZ of the identity of the stockholder and that the stockholder is demanding appraisal; (ii) not tender their Shares in the Offer; and (iii) continuously hold of record the Shares from the date on which the written demand for appraisal is made through the Merger Effective Time.

The foregoing summary of the rights of dissenting IMDZ stockholders under the DGCL does not purport to be a statement of the procedures to be followed by any such stockholders desiring to exercise any appraisal rights. The preservation and exercise of appraisal rights require strict and timely adherence to the applicable provisions of the DGCL, which will be set forth in the Schedule 14D-9. The foregoing discussion is not a complete statement of law pertaining to appraisal rights under the DGCL and is qualified in its entirety by reference to the DGCL.

 

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You cannot exercise appraisal rights at this time. The information provided above is for informational purposes only regarding your alternatives if the Merger is consummated. If you tender your Shares in the Offer, you will not be entitled to exercise appraisal rights with respect to your Shares.

 

13.

The Transaction Documents.

The Merger Agreement.

The following summary of the Merger Agreement does not purport to be a complete description of the terms and conditions of the Merger Agreement and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as an exhibit to the Tender Offer Statement on Schedule TO (the “Schedule TO”) filed with the SEC in connection with the Offer, which is hereby incorporated by reference into this Offer to Purchase and which you may examine and copy as set forth in Section 8 — “Certain Information Concerning IMDZ.” You are encouraged to read the full text of the Merger Agreement because it is the legal document that governs the Offer and the Merger. In the event of any discrepancy between the terms of the Merger Agreement and the following summary, the Merger Agreement controls. The following summary has been included in this Offer to Purchase to provide you with information regarding the terms of the Merger Agreement and is not intended to modify or supplement any factual disclosures about IMDZ, Parent or Merck in IMDZ’s or Merck’s public reports filed with the SEC. In particular, the Merger Agreement and this summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to IMDZ or Parent.

The representations and warranties in the Merger Agreement have been negotiated with the principal purpose of allocating risk among Parent, Purchaser and IMDZ and establishing the circumstances under which Parent and Purchaser have the right not to consummate the Offer, or under which a party may have the right to terminate the Merger Agreement, rather than for the purpose of establishing matters of fact. The representations, warranties and covenants contained in the Merger Agreement (i) were made by the parties thereto only for purposes of that agreement and as of specific dates; (ii) were made solely for the benefit of the parties to the Merger Agreement; (iii) may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement (such disclosures include information that has been included in public disclosures, as well as additional non-public information); (iv) may have been made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and (v) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, you should not rely on the representations and warranties as disclosures or characterizations of the actual state of facts regarding IMDZ, Purchaser or Parent.

The Offer. The Merger Agreement provides that Purchaser must commence the Offer as promptly as practicable, and in any event within 10 business days, after the date of the Merger Agreement. Our obligation to accept for payment and pay for all Shares validly tendered and not properly withdrawn pursuant to the Offer is subject to the satisfaction of the Minimum Condition and the satisfaction or waiver by Parent or Purchaser of the other conditions, including the HSR Condition, set forth in Section 15 — “Conditions of the Offer.” We can waive certain conditions to the Offer without the consent of IMDZ. We cannot, however, amend or waive other conditions, including the Minimum Condition, without the prior written consent of IMDZ. The Merger Agreement provides that each IMDZ stockholder who tenders Shares in the Offer will receive $5.85 for each Share validly tendered and not properly withdrawn, net to the seller in cash, without interest and less any applicable withholding taxes. We have agreed that, unless otherwise contemplated in the Merger Agreement or as previously approved by IMDZ in writing, we will not:

 

   

decrease the Offer Price;

 

   

change the form of consideration payable in the Offer (other than by adding consideration);

 

   

decrease the maximum number of Shares sought to be purchased in the Offer;

 

   

impose conditions to the Offer in addition to the conditions to the Offer set forth in Section 15 — “Conditions of the Offer”;

 

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amend or modify any of conditions to the Offer, which are set forth in Section 15 — “Conditions of the Offer” in a manner that adversely affects, or would reasonably be expected to adversely affect, any holder of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or delay the consummation of the Offer or prevent, delay or impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other transactions contemplated by the Merger Agreement;

 

   

waive or change the Minimum Condition;

 

   

extend or otherwise change the expiration date of the Offer other than in accordance with the Merger Agreement; or

 

   

provide any “subsequent offering period” within the meaning of Rule 14d-11 promulgated under the Exchange Act.

Extensions of the Offer. If, at the scheduled expiration of the Offer or the expiration of any extension of the Offer as described below, any condition to the Offer has not been satisfied or waived by Parent or us, and if the Merger Agreement has not been terminated pursuant to its terms, we may extend the Offer for successive periods of up to 10 business days per extension. We are obligated to extend the Offer (i) for successive periods of up to 10 business days per extension if the HSR Condition has not been satisfied, (ii) upon the request of IMDZ if any condition to the Offer (other than the Minimum Condition) has not been satisfied or waived by Parent or us for an additional period specified by IMDZ of up to 10 business days per extension, and (iii) upon the request of IMDZ if the Minimum Condition has not been satisfied, but all other conditions to the Offer have been satisfied or waived, on up to three occasions for an additional period specified by IMDZ of up to 10 business days per extension. In addition, if the Merger Agreement has not been terminated pursuant to its terms, we will extend the Offer for any period or periods of time required by any applicable law or any applicable rules, regulations, interpretations or positions of the SEC, its staff or Nasdaq. We will not be obligated to extend the Offer beyond the Extension Deadline. We will not be permitted to extend the Offer beyond the Extension Deadline without IMDZ’s prior written consent.

We will not terminate the Offer prior to any scheduled Expiration Date, except if the Merger Agreement is terminated pursuant to its terms as described below under Section 13 — “The Transaction Documents — The Merger Agreement — Termination.” If the Merger Agreement is terminated pursuant to its terms as described below under Section 13 — “The Transaction Documents — The Merger Agreement — Termination,” Purchaser will, and Parent will cause Purchaser to, promptly (and, in any event, within 24 hours of such termination), irrevocably and unconditionally terminate the Offer.

The Merger Agreement obligates Purchaser (and Parent to cause Purchaser), subject to the satisfaction of the Minimum Condition and the satisfaction or waiver by Parent or Purchaser of the other conditions set forth in Section 15 — “Conditions of the Offer,” to accept for payment and pay for, at the Offer Acceptance Time, all Shares validly tendered and not properly withdrawn pursuant to the Offer.

Directors. The board of directors of the Surviving Corporation immediately following the Merger Effective Time will consist of the members of the board of directors of Purchaser as of the date hereof.

The Merger. The Merger Agreement provides that, at the Merger Effective Time, Purchaser will be merged with and into IMDZ pursuant to Section 251(h) of the DGCL. Following the Merger, the separate corporate existence of Purchaser will cease, and IMDZ will continue as the Surviving Corporation and a wholly owned subsidiary of Parent. The Merger will be governed by Section 251(h) of the DGCL and will be effected as soon as practicable following the consummation of the Offer upon the terms and subject to the conditions set forth in the Merger Agreement.

Under the terms of the Merger Agreement, at the Merger Effective Time, each Share then outstanding immediately prior to the Merger Effective Time will be automatically converted into the right to receive the Offer Price, payable in cash, net to the holder, without interest and less any applicable withholding taxes (the “Merger Consideration”). Notwithstanding the foregoing, the Merger Consideration will not be

 

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payable in respect of (i) Shares owned by Parent, Purchaser or any other subsidiary of Parent, (ii) Shares held in the treasury of IMDZ or owned by IMDZ and (iii) Dissenting Shares (as defined below). Each Share described under (i) or (ii) above will be cancelled and cease to exist, and no payment will be made with respect thereto.

Shares that are outstanding immediately prior to the Merger Effective Time and held by a stockholder who is entitled to demand, and properly demands, appraisal for such Shares in accordance with Section 262 of the DGCL (such Shares, the “Dissenting Shares”) will not be converted into the right to receive the Merger Consideration. Rather, the holders of such Shares will be entitled to receive payment of the fair value of such Dissenting Shares in accordance with the provisions of Section 262 of the DGCL. However, for all Dissenting Shares held by stockholders who have failed to perfect or who have otherwise waived, withdrawn or lost their rights to appraisal of such Dissenting Shares under such Section 262 of the DGCL or other applicable law, the right of the stockholder to be paid the fair value of such Dissenting Shares shall cease and such Dissenting Shares will be deemed to have been converted into, and to have become exchangeable for, as of the Merger Effective Time, the right to receive the Merger Consideration.

Holders who tender their Shares in the Offer will not be entitled to exercise appraisal rights with respect to such Shares, but rather, subject to the conditions of the Offer, will receive the Offer Price. See Section 12 — “Purpose of the Offer; Plans for IMDZ; Appraisal Rights — Appraisal Rights.”

Treatment of IMDZ Stock Options; Stock Plans. The Merger Agreement provides that each IMDZ stock option to purchase Shares (each such stock option, a “IMDZ Option”) that is outstanding as of immediately prior to the Merger Effective Time will automatically accelerate and become fully vested and exercisable effective immediately prior to, and contingent upon, the Merger Effective Time. At the Merger Effective Time, each IMDZ Option that is outstanding and unexercised will be cancelled and the former holder thereof will be entitled to receive an amount in cash (subject to any applicable withholding taxes or other taxes required by applicable law) equal to the product of (i) the total number of Shares subject to such IMDZ Option immediately prior to the Merger Effective Time, multiplied by (ii) the excess, if any, of (x) the Merger Consideration over (y) the exercise price payable per Share under such IMDZ Option. If the exercise price per Share under any such IMDZ Option is equal to or greater than the Merger Consideration, then such IMDZ Option will be cancelled and no cash payment will be made to its holder.

Treatment of IMDZ RSU Awards. The Merger Agreement provides that, immediately prior to the Merger Effective Time, contingent upon the Merger Effective Time, each award of time-vesting restricted stock units granted under an IMDZ equity plan (each such award, a “IMDZ RSU”) that is outstanding as of immediately prior to the Merger Effective Time will automatically accelerate and become fully vested effective immediately prior to the Merger Effective Time, contingent upon the Merger Effective Time. As of the Merger Effective Time each IMDZ RSU will be automatically cancelled and converted into the right to receive the Merger Consideration in respect of each Share subject to such IMDZ RSU, less applicable withholding obligations.

Treatment of the IMDZ ESPP. The Offer is being made for Shares only and is not being made for any options granted under the IMDZ 2014 Employee Stock Purchase Plan (the “ESPP”). Rather, (i) no new “offering period” will commence under the ESPP, (ii) payroll withholdings may not be increased under the ESPP for the current offering period, and (iii) the current offering period will terminate as of the Merger Effective Time. Upon the Merger Effective Time, employees’ accumulated contributions under the ESPP will be used to purchase Shares under the ESPP, and the Merger Consideration will be paid with respect to such Shares.

Certificate of Incorporation, Bylaws, Directors and Officers. The board of directors and officers of the Surviving Corporation at and immediately following the Merger Effective Time will consist of the members of the board of directors and officers, respectively, of Purchaser as of the date hereof. At the Merger Effective Time, the certificate of incorporation and bylaws of the Surviving Corporation will each be amended and restated in their entirety so as to read in the form set forth on Exhibit B and Exhibit C, respectively, to the Merger Agreement.

 

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Representations and Warranties. In the Merger Agreement, IMDZ has made customary representations and warranties to Parent and Purchaser, including representations relating to its organization and qualification, power and authority, subsidiaries, capitalization, the absence of a stockholder rights plan or similar anti-takeover device, non-contravention of organizational documents, laws or agreements, required filings and consents, permits, compliance with applicable laws, the absence of certain prohibited payments, litigation, SEC filings and compliance with the Sarbanes-Oxley Act of 2002, financial statements, the inapplicability of state takeover laws and regulations, the absence of undisclosed liabilities, the absence of certain changes, employee benefit plans, labor and employment matters, material contracts, litigation, environmental matters, intellectual property, tax matters, insurance, real and personal property, finders’ and brokers’ fees, information to be included in the documents relating to the Offer and the Solicitation/Recommendation Statement on Schedule 14D-9 filed by IMDZ with the SEC in connection with the Offer (together with any amendments or supplements thereto, the “Schedule 14D-9”). Parent and Purchaser have made customary representations and warranties to IMDZ with respect to, among other matters, their organization and qualification, power and authority, non-contravention of organizational documents, laws or agreements, required filings and consents, litigation, ownership of IMDZ capital stock, sufficiency of funds to complete the Offer and the Merger, ownership of Purchaser by Parent, finders’ and brokers’ fees, information to be included in the documents relating to the Offer and the Schedule 14D-9.

None of the representations and warranties in the Merger Agreement will survive the Merger Effective Time.

Operating Covenants. Pursuant to the Merger Agreement, from the date of the Merger Agreement until the Merger Effective Time, IMDZ will (except as set forth in the Merger Agreement, required by applicable law or consented to by Parent) conduct its business and operations in the ordinary course. The Merger Agreement requires IMDZ to use commercially reasonable efforts to preserve intact the material components of IMDZ’s current business organization, including keeping available the services of current officers and key employees, and use commercially reasonable efforts to maintain their respective relations and good will with all material suppliers, material customers, governmental entities and other material business relations.

The Merger Agreement also contains specific restrictive covenants which provide that, from the date of the Merger Agreement until the Merger Effective Time, subject to certain exceptions, including as permitted by the Merger Agreement, IMDZ will not directly or indirectly do, or agree to do the following, without Parent’s prior consent:

 

   

(i) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Shares), except for dividends or other distributions by a direct or indirect wholly owned subsidiary of IMDZ to its parent or (ii) repurchase, redeem or otherwise reacquire any of its shares of capital stock (including any Shares), or any rights, warrants or options to acquire any shares of its capital stock, other than: (1) repurchases or reacquisitions in the ordinary course of business and at fair market value of Shares outstanding as of the date of the Merger Agreement pursuant to IMDZ’s right (under written commitments in effect as of the date of the Merger Agreement that have been made available to Parent) to purchase or reacquire Shares held by an associate of IMDZ, such as current or former employee, officer, consultant or director of IMDZ only upon termination of such associate’s employment or engagement by IMDZ; or (2) in connection with withholding to satisfy the exercise price and/or tax obligations with respect to IMDZ Options;

 

   

split, combine, subdivide or reclassify any shares of its capital stock (including the Shares) or other equity interests;

 

   

sell, issue, grant, deliver, pledge, transfer, encumber or authorize the issuance, sale, delivery, pledge, transfer, encumbrance or grant by IMDZ or its subsidiaries (other than pursuant to agreements in effect as of the date of the Merger Agreement) of (i) any capital stock, equity interest or other security of IMDZ or its subsidiary, (ii) any option, call, warrant, restricted

 

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securities or right to acquire any capital stock, equity interest or other security of IMDZ or any of its subsidiaries or (iii) any instrument convertible into or exchangeable for any capital stock, equity interest or other security of IMDZ or any of its subsidiaries (except that IMDZ may issue Shares as required to be issued upon the exercise of IMDZ Options outstanding as of the date of the Merger Agreement, and IMDZ may issue Shares to employees pursuant to the terms of its employee stock purchase plan and current offering thereunder, in each case in accordance with their respective terms as of the date of the Merger Agreement);

 

   

establish, adopt, terminate or amend any employee benefit plan (or any plan, program, arrangement, practice or agreement that would be an employee benefit plan if it were in existence on the date of the Merger Agreement), or amend or waive any of its rights under, or accelerate the vesting, payment or lapse of restrictions under, any provision of any of the employee benefit plans (or any plan, program, arrangement, practice or agreement that would be an employee benefit plan if it were in existence on the date of the Merger Agreement) or grant any employee or director any increase in compensation, bonuses or severance, retention or other payments or benefits;

 

   

(i) enter into or amend (1) any change-of-control agreement with any officer, employee, director or independent contractor or (2) any retention agreement with any officer, employee or director, (ii) enter into or amend (1) any employee benefit plan (or any plan, program, arrangement, practice or agreement that would be an employee benefit plan if it were in existence on the date of the Merger Agreement), (2) any employment, severance or other material agreement with any officer or director or (3) any consulting agreement with any independent contractor with an annual base compensation greater than $100,000 or (iii) hire any employee with an annual base salary in excess of $100,000;

 

   

amend or permit the adoption of any amendment to its certificate of incorporation or bylaws or other charter or organizational documents;

 

   

form any subsidiary, acquire any equity interest in any other entity or enter into any joint venture, partnership, limited liability corporation or similar arrangement;

 

   

make or authorize any capital expenditure;

 

   

acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any patent expiring at the end of its statutory term), transfer, assign, guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any encumbrance (other than permitted encumbrances) any material right or other material asset or property, except pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the conduct of the business of IMDZ or its subsidiaries;

 

   

except for intercompany loans and capital contributions, lend money or make capital contributions or advances to or make investments in, any person, or incur or guarantee any indebtedness (except for advances to employees and consultants for travel and other business related expenses in the ordinary course of business);

 

   

amend or modify in any material respect (other than renewals in the ordinary course of business), waive any rights under, terminate (other than non-renewals of contracts in the ordinary course of business), replace or release, settle or compromise any material claim, liability or obligation under any material contract or lease agreement or enter into any contract which if entered into prior to the date of the Merger Agreement would have been a material contract or lease agreement, or agree to any requests to add additional, or substitute any, targets under, or otherwise modify the targets or programs that are the subject of, any of its collaboration or license agreements, except that IMDZ may, following prior written notice to Parent, comply with the existing terms of any collaboration or license agreement;

 

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(i) make, change or revoke any material tax election, (ii) adopt or change any accounting method in respect of taxes, (iii) amend any tax return, (iv) file any tax return other than as consistent with past practice or as required by law, (v) enter into a closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. legal requirements), (vi) settle any claim or assessment in respect of taxes, or (vii) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of taxes;

 

   

commence any legal proceeding, except with respect to: (i) routine matters in the ordinary course of business; (ii) in such cases where IMDZ reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that IMDZ consults with Parent and considers the views and comments of Parent with respect to such legal proceedings prior to commencement thereof); or (iii) in connection with a breach of the Merger Agreement or any other agreements contemplated by the Merger Agreement;

 

   

settle, release, waive or compromise any legal proceeding or other claim (or threatened legal proceeding or other claim), other than any legal proceeding relating to a breach of the Merger Agreement or any other agreements contemplated by the Merger Agreement or pursuant to a settlement that does not relate to any of the transactions contemplated by the Merger Agreement and (i) that results solely in a monetary obligation involving only the payment of monies by IMDZ and its subsidiaries of not more than $50,000 in the aggregate; (ii) that results solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, IMDZ and its subsidiaries and the payment of monies by IMDZ and its subsidiaries that together with any settlement made under subsection “(A)” are not more than $50,000 in the aggregate (not funded by an indemnity obligation or through insurance policies); or (iii) that results in no monetary obligation of IMDZ or any of its subsidiaries or IMDZ’s or any of its subsidiaries’ receipt of payment;

 

   

enter into any collective bargaining agreement or other agreement with any labor organization (except to the extent required by applicable law);

 

   

adopt or implement any stockholder rights plan or similar arrangement;

 

   

adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of IMDZ or any of its subsidiaries; or

 

   

authorize any of, or agree or commit to take, any of the actions described above.

Access to Information. From the date of the Merger Agreement until the Merger Effective Time and except as required pursuant to applicable laws, the Merger Agreement provides that, upon reasonable advance notice to IMDZ, IMDZ will, and will cause each of its directors, officers, employees, attorneys, accountants, investment bankers, consultants, agents, financial advisors, other advisors and other representatives (collectively, the “IMDZ Representatives”) to: (i) provide to Parent and Parent’s directors, officers, employees, attorneys, accountants, investment bankers, consultants, agents, financial advisors, other advisors and other representatives (collectively, the “Parent Representatives”), reasonable access during normal business hours, to the IMDZ Representatives, personnel, and assets and to all existing books, records, tax returns, work papers and other documents and information relating to IMDZ and its subsidiaries; and (ii) promptly provide Parent and Parent Representatives with all reasonably requested information regarding the business of IMDZ, including copies of the existing books, records, databases (to the extent transferable), reports, tax returns, work papers and other documents and information relating to IMDZ and its subsidiaries, and with such additional financial, operating and other data and information regarding IMDZ and its subsidiaries, as Parent may reasonably request.

No Solicitation. In the Merger Agreement, IMDZ has agreed that from the date of the Merger Agreement until the earlier of the Merger Effective Time or the termination of the Merger Agreement pursuant to its terms, it will not, and will cause the IMDZ Representatives not to, directly or indirectly:

 

   

solicit, initiate or knowingly facilitate or knowingly encourage (including by way of furnishing information) any inquiries regarding, or the making of any proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal (as defined below);

 

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engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any information in connection with or for the purpose of knowingly soliciting, encouraging or facilitating, an Acquisition Proposal or any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal; or

 

   

enter into any letter of intent, acquisition agreement, agreement in principle or similar agreement with respect to an Acquisition Proposal.

The Merger Agreement provides that IMDZ shall: (i) not continue any solicitation, knowing encouragement, discussions or negotiations with any persons that may be ongoing with respect to an Acquisition Proposal; (ii) deliver a written notice within three business days after the date of the Merger Agreement to each person that entered into a confidentiality agreement in anticipation of potentially making an Acquisition Proposal within the last six months, stating that IMDZ is ending all discussions and negotiations with such person with respect to any Acquisition Proposal, effective on the date thereof, and the notice shall also request such person to promptly return or destroy all confidential information concerning IMDZ and its subsidiaries; and (iii) terminate access by any third party who has made or would reasonably be expected to make an Acquisition Proposal (other than Parent and its representatives) to any data room (virtual or actual) containing any confidential information of IMDZ or any of its subsidiaries.

If between the date of the Merger Agreement and the Offer Acceptance Time IMDZ receives an unsolicited written Acquisition Proposal from any person, which Acquisition Proposal was made on or after the date of the Merger Agreement and did not result from any breach of the non-solicitation provisions of the Merger Agreement, (i) IMDZ and its representatives may contact such person or group of persons solely to clarify the terms and conditions thereof and inform such person of the non-solicitation terms of the Merger Agreement and (ii) if the IMDZ Board determines in good faith, (1) after consultation with financial advisors and outside legal counsel, that such Acquisition Proposal constitutes or would reasonably be expected to lead to a Superior Offer (as defined below) and (2) after consultation with IMDZ’s outside legal counsel, that the failure to take such action described in clauses (x) and (y) of this paragraph would be inconsistent with the fiduciary duties of the IMDZ Board, then IMDZ may (x) furnish, pursuant to (but only pursuant to) an Acceptable Confidentiality Agreement (as defined below), information (including non-public information) with respect to IMDZ and its subsidiaries to the person who has made such Acquisition Proposal; provided that IMDZ must provide to Parent any such information concerning IMDZ or its subsidiaries that was not previously provided to Parent or its representatives and (y) engage in or otherwise participate in discussions or negotiations with the person making such Acquisition Proposal. IMDZ must provide Parent with an accurate and complete copy of any Acceptable Confidentiality Agreement entered into promptly (and in any event within 24 hours) of the execution thereof.

If between the date of the Merger Agreement and the Offer Acceptance Time, IMDZ has received a written bona fide Acquisition Proposal (which Acquisition Proposal did not arise out of a breach of the non-solicitation terms of the Merger Agreement) from any person that has not been withdrawn and after consultation with outside legal counsel, the IMDZ Board shall have determined, in good faith, that such Acquisition Proposal is a Superior Offer, (x) the IMDZ Board may make a Company Adverse Change Recommendation or (y) IMDZ may terminate the Merger Agreement to enter into a binding written definitive acquisition agreement with respect to such Superior Offer in accordance with the Merger Agreement, in each case, if and only if: (i) the IMDZ Board determines in good faith, after consultation with its outside legal counsel, that the failure to do so would be inconsistent with the fiduciary duties of the IMDZ Board to IMDZ’s stockholders under applicable law; (ii) IMDZ shall have given Parent prior written notice of its intention to consider making a Company Adverse Change Recommendation or terminate the Merger Agreement pursuant to the terms of the Merger Agreement at least four business days prior to making any such Company Adverse Change Recommendation; and (iii) (1) IMDZ shall have provided to Parent a summary of the material terms and conditions of the Acquisition Proposal and all other material information contemplated to be provided in accordance with the Merger Agreement (as described above), (2) IMDZ shall have given Parent the four business days after Parent’s receipt of IMDZ’s notice to propose revisions to the terms of the Merger Agreement or make another proposal and shall have negotiated in good

 

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faith with Parent and its representatives (to the extent Parent desires to negotiate) with respect to such proposed revisions or other proposal, if any, and (3) after considering the results of any such negotiations and giving effect to the proposals made by Parent, if any, (x) after consultation with IMDZ’s financial advisor and outside legal counsel, the IMDZ Board shall have determined, in good faith, that such Acquisition Proposal is a Superior Offer and (y) after consultation with IMDZ’s outside legal counsel, that the failure to make the Company Adverse Change Recommendation or terminate the Merger Agreement pursuant to the terms of the Merger Agreement would be inconsistent with the fiduciary duties of the IMDZ Board to IMDZ’s stockholders under applicable law. In addition, the Merger Agreement provides that the foregoing requirements also apply to any material amendment to any Acquisition Proposal, each of which will require a new notice, except that for purposes of such subsequent notice, the references to four business days will be deemed to be two business days.

The Merger Agreement also provides that nothing contained therein shall prevent IMDZ from (i) taking and disclosing to the holders of Shares a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act, (ii) making any disclosure to the holders of Shares that is required by applicable law or (iii) making any “stop, look and listen” communication pursuant to Rule 14d-9(f) promulgated under the Exchange Act.

Acceptable Confidentiality Agreement” means any customary confidentiality agreement that (i) contains provisions (other than standstill provisions) that are no less favorable in the aggregate to IMDZ than those contained in the confidentiality agreement described in Section 13 — “The Transaction Documents — The Confidentiality Agreement” and (ii) does not prohibit IMDZ from providing any information to Parent in accordance with the Merger Agreement or otherwise prohibit IMDZ from complying with its obligations under the Merger Agreement.

Acquisition Proposal” means, any proposal or offer by or from any person (other than Parent and its affiliates) or “group”, within the meaning of Section 23(d) of the Exchange Act, including any amendment or modification to any such proposal or offer, relating to, in a single transaction or series of related transactions, any (i) acquisition or license of assets of IMDZ and its subsidiaries equal to 20% or more of IMDZ’s assets or to which 20% or more of IMDZ’s revenues or earnings are attributable, (ii) issuance or acquisition of 20% or more of the outstanding Shares, (iii) recapitalization, tender offer or exchange offer that if consummated would result in any person or group beneficially owning 20% or more of the outstanding Shares or (iv) merger, consolidation, amalgamation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving IMDZ that if consummated would result in any person or group beneficially owning 20% or more of the outstanding Shares, in each case other than the transactions contemplated by the Merger Agreement.

Company Adverse Change Recommendation” means any of the following actions taken by the IMDZ Board: (i) withdrawal or withholding (or modifying or qualifying in a manner adverse to Parent or Purchaser), or publicly proposing to withdraw or withhold (or modify or qualify in a manner adverse to Parent or Purchaser), the recommendation of the IMDZ Board that the stockholders of IMDZ tender their Shares to Purchaser pursuant to the Offer, (ii) adopting, approving, recommending or declaring advisable, or publicly proposing to adopt, approve, recommend or declare advisable, any Acquisition Proposal or (iii) resolving, agreeing or publicly proposing to take any such actions.

Superior Offer” means a bona fide written Acquisition Proposal that the IMDZ Board determines, in its good faith judgment, after consultation with its outside legal counsel and its financial advisor(s), is reasonably likely to be consummated in accordance with its terms, and taking into account all legal, regulatory and financing aspects (including certainty of closing) of the proposal and the person making the proposal and other aspects of the Acquisition Proposal that the IMDZ Board deems relevant, and if consummated, would result in a transaction more favorable to IMDZ’s stockholders (solely in their capacity as such) from a financial point of view than the transactions contemplated by the Merger Agreement; provided that for purposes of the definition of “Superior Offer”, the references to “20%” in the definition of Acquisition Proposal shall be deemed to be references to “50%.”

 

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Change in Circumstance. Other than in connection with an Acquisition Proposal, the Merger Agreement provides that the IMDZ Board may make a Company Adverse Change Recommendation in response to a Change in Circumstance (as defined below), if and only if: (i) the IMDZ Board determines in good faith, after consultation with IMDZ’s outside legal counsel, that the failure to do so would be inconsistent with the fiduciary duties of the IMDZ Board to IMDZ’s stockholders under applicable law; (ii) IMDZ shall have given Parent prior written notice of its intention to consider making a Company Adverse Change Recommendation at least four business days prior to making any such Company Adverse Change Recommendation; and (iii) (1) IMDZ shall have specified the Change in Circumstance in reasonable detail, (2) IMDZ shall have given Parent the four business days after the notice to propose revisions to the terms of the Merger Agreement or make another proposal, and shall have negotiated in good faith with Parent and its representatives (to the extent Parent desires to do so) with respect to such proposed revisions or other proposal, if any, and (3) after considering the results of any such negotiations and giving effect to the proposals made by Parent, if any, after consultation with outside legal counsel, the IMDZ Board shall have determined, in good faith, that the failure to make the Company Adverse Change Recommendation in response to such Change in Circumstance would be inconsistent with the fiduciary duties of the IMDZ Board to IMDZ’s stockholders under applicable law. In addition, the Merger Agreement provides that the foregoing requirements also apply to any material change to the facts and circumstances relating to such Change in Circumstance and require a new notice, except that for purposes of such subsequent notice, the references to four business days shall be deemed to be two business days.

Change in Circumstance” means any material event or development or material change in circumstances with respect to IMDZ that (i) was neither known to the IMDZ Board nor reasonably foreseeable as of or prior to the date of the Merger Agreement and (ii) does not relate to (1) any Acquisition Proposal, (2) any events, changes or circumstances relating to Parent, Purchaser or any of their affiliates, (3) clearance of the Merger or the expiration or termination of any waiting period under applicable antitrust laws, or (4) (a) the results of, or any data derived from, any pre-clinical or clinical testing being conducted by or on behalf of IMDZ and its subsidiaries, any of their competitors or any of their respective collaboration partners or any announcement relating thereto, or (b) any action or announcement by any governmental body that relates to any of IMDZ’s or its subsidiaries’ assets or programs.

Offer Documents. Subject to the terms and conditions of the Merger Agreement, Parent and Purchaser, on the one hand, and IMDZ, on the other hand, will promptly correct any information provided by it for use in the Schedule TO and this Offer to Purchase, the form of Letter of Transmittal and the form of summary advertisement included as exhibits thereto (collectively, together with all amendments and supplements thereto, the “Offer Documents”) or the Schedule 14D-9, if and to the extent that it becomes false or misleading in any material respect or as otherwise required by applicable law. Parent and Purchaser have agreed to cause the Offer Documents, as so corrected, and IMDZ has also agreed to cause the Schedule 14D-9, as so corrected, to be filed with the SEC and disseminated to holders of Shares, in each case as and to the extent required by the Exchange Act. Parent and Purchaser, on the one hand, and IMDZ, on the other hand, have also agreed to give the other party a reasonable opportunity to review and comment on the Offer Documents or the Schedule 14D-9, as applicable.

Third-Party Consents and Regulatory Approvals. IMDZ and Parent have agreed in the Merger Agreement to use their reasonable best efforts to take, or cause to be taken, all actions, to file, or cause to be filed, all documents and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the transactions contemplated by the Merger Agreement, including: (i) obtaining all necessary actions or nonactions, waivers, consents, clearances, decisions, declarations, approvals and, expirations or terminations of waiting periods from governmental bodies and the making of all necessary registrations and filings and the taking of all steps as may be necessary to obtain any such consent, decision, declaration, approval, clearance or waiver, or expiration or termination of a waiting period by or from, or to avoid an action or proceeding by, any governmental body in connection with any antitrust law; (ii) obtaining all necessary consents, authorizations, approvals or waivers from third parties

 

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(including estoppel certificates and consents from landlords); and (iii) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by the Merger Agreement.

In furtherance of the foregoing, each of Parent and IMDZ has agreed to make an appropriate filing of a Premerger Notification and Report Form (as defined in Section 16 — “Certain Legal Matters; Regulatory Approvals”) pursuant to the HSR Act with respect to the transactions contemplated in the Merger Agreement with the United States Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice (the “Antitrust Division”) as promptly as practicable and in any event within 10 business days after the date of the Merger Agreement. Each of Parent and IMDZ have agreed to use their reasonable best efforts to (i) cooperate and consult with each other in connection with any filing or submission in connection with any investigation or other inquiry, (ii) give the other parties to the Merger Agreement prompt notice of the making or commencement of any request, inquiry, investigation, action or law brought by a governmental body or brought by a third party before any governmental body, with respect to the transactions contemplated by the Merger Agreement, (iii) keep the other parties to the Merger Agreement informed as to the status of any such request, inquiry, investigation, action or legal proceeding, (iv) promptly inform the other parties to the Merger Agreement of any communication to or from the FTC, the U.S. Department of Justice or any other governmental body in connection with any such request, inquiry, investigation, action or legal proceeding, (v) upon request, promptly furnish to the other parties to the Merger Agreement, with copies of documents provided to or received from any governmental body in connection with any such request, inquiry, investigation, action or legal proceeding, subject to certain redactions as set forth in the Merger Agreement, (vi) subject to an appropriate confidentiality agreement to limit disclosure to counsel and outside consultants retained by such counsel, and to the extent reasonably practicable, consult in advance and cooperate with the other parties to the Merger Agreement and consider in good faith the views of such other parties in connection with any substantive communication, analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal to be made or submitted in connection with any such request, inquiry, investigation, action or legal proceeding, and (vii) provide advance notice of and permit authorized representatives of the other parties to the Merger Agreement to be present at each telephone or in person meeting or conference relating to such request, inquiry, investigation, action or legal proceeding and to have access to and be consulted in advance in connection with any argument, opinion or proposal to be made or submitted to any governmental body in connection with such request, inquiry, investigation, action or legal proceeding.

Employee Benefit Matters. Pursuant to the Merger Agreement, until at least December 31, 2019, Parent must provide each employee of IMDZ as of the closing of the Merger (each, a “Continuing Employee”) (i) a base salary (or base wages) that is not less favorable than the base salary (or base wages) provided to such Continuing Employee as of immediately prior to the date of the Merger Agreement, (ii) an annual cash bonus opportunity that is not less favorable than the annual cash bonus opportunity provided to such Continuing Employee as of immediately prior to the date of the Merger Agreement, and (iii) employee benefits (excluding equity incentives, long-term incentives, 401(k) plan participation and change in control and retention benefits) that are substantially comparable in the aggregate to either the employee benefits (excluding equity incentives, long-term incentives, 401(k) plan participation and change in control and retention benefits) provided to such Continuing Employee immediately prior to the date of the Merger Agreement or provided by Parent to its similarly-situated non-unionized headquarters employees.

Parent will provide each Continuing Employee with service credit for all purposes, including for eligibility to participate, benefit levels (including, for the avoidance of doubt, levels of benefits under Parent’s vacation policy) and eligibility for vesting under Parent’s employee benefit plans and arrangements with respect to his or her length of service with IMDZ prior to the closing of the Merger that was credited under the corresponding plan of IMDZ, except that there shall be no duplication of benefits or apply for purposes of determining benefit accruals under any pension plan or for purposes of postemployment welfare benefits. Parent will assume (or cause the Surviving Corporation to assume) the liability for each Continuing Employee’s accrued but unused personal, sick or vacation time and allow such Continuing Employee to use such accrued personal, sick or vacation time in accordance with the practice and policies of IMDZ.

 

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The Merger Agreement provides that Parent will use commercially reasonable efforts to (or, where specifically permitted by such plans, Parent will) (i) waive all limitations as to pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under health and welfare plans, to the extent that such conditions, exclusions and waiting periods would not apply under a similar employee benefit plan in which such employees participated prior to the Merger Effective Time and (ii) ensure that such health or welfare benefit plan shall, for purposes of determining deductibles, co-payments and out-of-pocket, credit Continuing Employees for deductibles, co-payments and other out-of-pocket amounts paid prior to the Merger Effective Time in the calendar year in which the closing of the Merger occurs to the same extent that such amounts paid were recognized prior to the Merger Effective Time under the corresponding health or welfare benefit plan of IMDZ for such calendar year.

Finally, nothing in the Merger Agreement related to the foregoing will (i) constitute the establishment or adoption of or an amendment to any employee benefit plan for purposes of ERISA or otherwise and no current or former employee or any other individual associated therewith shall be regarded for any purpose as a third party beneficiary of the Merger Agreement or have the right to enforce the provisions of the Merger Agreement or (ii) restrict Parent’s or any of its affiliates’ right to terminate the employment or any Continuing Employee at any time or to change the terms and conditions of any such Continuing Employee’s employment.

Indemnification and Insurance. The Merger Agreement provides that, for six years from and after the Merger Effective Time, the Surviving Corporation will indemnify and hold harmless all past and present directors and officers of IMDZ and its subsidiaries (the “Covered Persons”) in connection with any pending or threatened legal proceeding based on or arising out of, in whole or in part, the fact that such Covered Person is or was a director or officer of IMDZ or one of its subsidiaries at or prior to the Merger Effective Time and pertaining to any and all matters pending, existing or occurring at or prior to the Merger Effective Time, whether asserted or claimed prior to, at or after the Merger Effective Time, including any such matter arising under any claim with respect to the transactions contemplated by the Merger Agreement. The Surviving Corporation will advance reasonable and documented out-of-pocket costs and expenses (including reasonable and documented attorneys’ fees) incurred by the Covered Persons in connection with matters for which such Covered Persons are eligible to be indemnified pursuant to the provisions of the Merger Agreement described above within 15 days after receipt by Parent of a written request for such advance, subject to the execution by such Covered Persons of appropriate undertakings in favor of the Surviving Corporation to repay such advanced costs and expenses if it is ultimately determined in a final and non-appealable judgment of a court of competent jurisdiction that such Covered Person is not entitled to be indemnified pursuant to the provisions of the Merger Agreement described above.

The Merger Agreement provides that all rights to indemnification, advancement of expenses and exculpation by IMDZ existing as of the date of the Merger Agreement in favor of Covered Persons for their acts and omissions occurring prior to the Merger Effective Time, as provided in the certificate of incorporation and bylaws (or applicable governing documents) of IMDZ or its subsidiaries (as in effect as of the date of the Merger Agreement) and as provided in the indemnification agreements between IMDZ or its subsidiaries and a Covered Person in effect on the date of the Merger Agreement, will survive the Merger and shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of such Covered Persons, and shall be observed by the Surviving Corporation and its subsidiaries to the fullest extent available under Delaware law for a period of six years from the Merger Effective Time, and any claim made pursuant to such rights within such six-year period shall continue to be subject to the rights provided under the provisions of the Merger Agreement described above until disposition of such claim.

The Merger Agreement provides that for six years after the Merger Effective Time, the Surviving Corporation shall maintain, and Parent shall cause the Surviving Corporation to maintain, in effect, the existing policies of directors’ and officers’ liability insurance maintained by IMDZ and its subsidiaries as of the date of the Merger for the benefit of the Covered Persons who are currently covered by such existing

 

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policies with respect to their acts and omissions occurring prior to the Merger Effective Time in their capacities as directors and officers of IMDZ or its subsidiaries (as applicable), on terms with respect to coverage, deductibles and amounts no less favorable than the existing policies, or at or prior to the Merger Effective Time, Parent may (and IMDZ and its subsidiaries, upon Parent’s written request delivered to IMDZ not less than 10 business days prior to the Merger Effective Time, shall) through a nationally recognized insurance broker approved by Parent (such approval not to be unreasonably withheld, delayed or conditioned) purchase a six-year “tail policy” for the director and officer insurance policies of IMDZ and its subsidiaries in effect as of the date of the Merger Agreement, with such “tail policy” to be effective as of the Merger Effective Time. If such “tail policy” is obtained, it will be deemed to satisfy all obligations to obtain and/or maintain insurance pursuant to the Merger Agreement. In no event will the Surviving Corporation be required to expend in any one year an amount in excess of 300% of the annual premium currently payable by IMDZ and its subsidiaries with respect to such current policies. If the annual premiums payable for such insurance coverage exceeds such amount, Parent will be obligated to cause the Surviving Corporation to obtain a policy with the greatest coverage available for a cost equal to such amount.

The Merger Agreement also provides that if Parent or the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then, Parent must use commercially reasonable efforts to ensure that the successors and assigns of Parent or the Surviving Corporation, as the case may be, or at Parent’s option, Parent, will assume the obligations described above.

Conditions of the Offer. See Section 15 — “Conditions of the Offer.”

Conditions to the Merger. The obligations of each party to the Merger Agreement to consummate the Merger are subject to the satisfaction of the following conditions at or prior to the Merger Effective Time:

 

   

there shall be no judgment, temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Merger, nor any legal requirement, judgment or order promulgated, entered, enforced, enacted, issued or deemed applicable to the Merger by any governmental body which directly or indirectly prohibits, or makes illegal the consummation of the Merger; provided, however, that no party is permitted to invoke this condition to the Merger unless it has taken all actions required under the Merger Agreement to have any such order lifted; and

 

   

Purchaser has accepted for payment all Shares validly tendered and not validly withdrawn pursuant to the Offer.

Termination. The Merger Agreement may be terminated and the Merger may be abandoned:

 

  (i)

by mutual written consent of Parent and IMDZ;

 

  (ii)

by either IMDZ or Parent if:

 

  a.

the Offer (as may be extended in accordance with the Merger Agreement) has expired without the acceptance for payment of Shares pursuant to the Offer; provided, however, that a party cannot so terminate the Merger Agreement if the failure of the acceptance for payment of Shares pursuant to the Offer is primarily caused by a failure on the part of such party to perform in any material respect any covenant or obligation in the Merger Agreement required to be performed by such party at or prior to the acceptance for payment of Shares pursuant to the Offer;

 

  b.

a court of competent jurisdiction or other governmental body shall have issued a decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the acceptance for payment of Shares pursuant to the Offer or the Merger or making consummation of the Offer or the Merger illegal, which is final and nonappealable; provided, however, that a party shall not be

 

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  permitted to so terminate the Merger Agreement if the issuance of such final and nonappealable order, decree, ruling or other action is primarily caused by a failure on the part of such party to perform in any material respect any covenant or obligation in the Merger Agreement required to be performed by such party at or prior to the Merger Effective Time; or

 

  c.

the Offer Acceptance Time has not occurred on or prior to 5:00 p.m. Eastern Time on the End Date; provided, however, that a party shall not be permitted to so terminate the Merger Agreement if the failure of the consummation of the Offer to occur prior to the End Date is primarily caused by the failure on the part of such party to perform in any material respect any covenant or obligation in the Merger Agreement required to be performed by such party.

 

  (iii)

by Parent at any time prior to the Offer Acceptance Time, if:

 

  a.

(i) the IMDZ Board failed to include its recommendation in the Schedule 14D-9 when mailed, or effected a Company Adverse Change Recommendation; (ii) the IMDZ Board failed to publicly reaffirm its recommendation of the Merger Agreement within 10 business days after Parent so requests in writing (or, if earlier, within two business days prior to the Expiration Date), provided that, Parent may only make such request once every 30 days if no Acquisition Proposal has been publicly disclosed; or (iii) in the case of a tender offer or exchange offer by a party other than Parent and Purchaser that is subject to Regulation 14D under the Exchange Act, the IMDZ Board fails to reaffirm its recommendation and recommends, in a Solicitation/Recommendation Statement on Schedule 14D-9, rejection of such tender offer or exchange offer within 10 business days of the commencement of such tender offer or exchange offer; or

 

  b.

if a breach of any representation or warranty contained in the Merger Agreement or failure to perform any covenant or obligation in the Merger Agreement on the part of IMDZ has occurred such that the conditions described in paragraphs “(ii)(b)”, “(ii)(c)”, “(ii)(d)”, “(ii)(e)” and “(ii)(g)” of Section 15 — “Conditions of the Offer”, would not be satisfied and cannot be cured by IMDZ by the End Date, or if capable of being cured by the End Date, shall not have been cured within 30 days of the date Parent gives IMDZ written notice of such breach or failure to perform; provided, however, that, Parent shall not have the right to so terminate the Merger Agreement if either Parent or Purchaser is then in material breach of any representation, warranty, covenant or obligation under the Merger Agreement.

 

  (iv)

by IMDZ at any time prior to the Offer Acceptance Time:

 

  a.

in order to accept a Superior Offer and substantially simultaneously with such termination enter into a binding written definitive acquisition agreement providing for the consummation of a transaction constituting a Superior Offer; provided that IMDZ has complied in all respects with the requirements set forth in the Merger Agreement described in Section 13 — “The Transaction Documents — The Merger Agreement — No Solicitation” with respect to such Superior Offer and substantially concurrently with such termination, IMDZ has paid the Termination Fee (as defined below) to Parent; or

 

  b.

if a breach of any representation or warranty contained in the Merger Agreement or failure to perform any covenant or obligation in the Merger Agreement on the part of Parent or Purchaser shall have occurred, in each case if such breach or failure has prevented or would reasonably be expected to prevent Parent or Purchaser from consummating the Offer or the Merger when required pursuant to the Merger Agreement and such breach or failure cannot be cured by Parent or Purchaser, as applicable, by the End Date, or if capable of being cured by the End Date, shall not have

 

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  been cured within 30 days of the date IMDZ gives Parent written notice of such breach or failure to perform; provided, however, that, IMDZ shall not have the right to so terminate the Merger Agreement if IMDZ is then in material breach of any representation, warranty, covenant or obligation under the Merger Agreement.

Termination Fee. In the event that:

(i)    the Merger Agreement is terminated by IMDZ pursuant to paragraph (iv)(a) of the Subsection titled “ — Termination” above then IMDZ will pay to Parent $10,500,000 (the “Termination Fee”) substantially concurrently with such termination;

(ii)    the Merger Agreement is terminated by Parent pursuant to paragraph (iii)(a) of the Subsection titled “ — Termination” above, then IMDZ will pay to Parent the Termination Fee within two business days after such termination; and

(iii)    (A) the Merger Agreement is terminated by Parent or IMDZ pursuant to clause (ii)(a) or (ii)(c) of the Subsection titled “ — Termination” above or by Parent pursuant to paragraph (iii)(b) of the Subsection titled “ — Termination” above, (B) any person shall have publicly disclosed a bona fide Acquisition Proposal (or, in the case of clause (iii)(b) of the Subsection titled “ — Termination”, any Acquisition Proposal has been communicated to the IMDZ Board) after the date of the Merger Agreement and prior to such termination and (C) within 12 months of such termination IMDZ shall have consummated an Acquisition Proposal or entered into a definitive agreement with respect to any Acquisition Proposal that is subsequently consummated (provided that for purposes of this paragraph (iii)(C) the references to “20%” in the definition of “Acquisition Proposal” shall be deemed to be references to “50%”), then the Termination Fee will be payable within two business days after consummation of the Acquisition Proposal.

Fees and Expenses. All expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby will be borne by the party incurring such expenses, other than with respect to payment of any Termination Fee.

Amendment and Waiver. Prior to the consummation of the Offer, the Merger Agreement may be amended with the approval of the respective boards of directors of IMDZ and Parent at any time. The Merger Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties to the Merger Agreement. Parent and Purchaser, on the one hand, and IMDZ, on the other hand, may waive any power, right, privilege or remedy under the Merger Agreement, if such waiver is in writing and is signed by such party.

The Confidentiality Agreement.

On December 4, 2018, Parent and IMDZ entered into the Confidentiality Agreement in connection with Parent’s consideration of a possible transaction with or involving IMDZ. Under the Confidentiality Agreement, Parent and IMDZ agreed that each may disclose its non-public information to the other party solely for the purpose of exploring a possible negotiated transaction. IMDZ and Parent agreed not to use the confidential information disclosed to them by the other party for its own use or for any purpose except to explore a potential negotiated transaction.

The parties further agreed to not share the information obtained pursuant to the Confidentiality Agreement with third-parties, except with their representatives and as required by law. Pursuant to the Confidentiality Agreement, Parent and IMDZ will be liable for any breach of the Confidentiality Agreement by their respective representatives and must instruct its representatives not to make any unauthorized use or disclosure of any of the other party’s confidential information.

Parent and IMDZ also agreed to a customary standstill provision, prohibiting each party from taking certain actions with regard to the other party upon receipt of confidential information, including the making of any offer or proposal for the acquisition of all or a substantial portion of the other party’s assets or

 

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equities and soliciting any proxies with respect to the voting of the other party’s shares. In addition, the parties agreed to refrain from recruiting or soliciting for hire certain employees of the other party.

The foregoing summary description of the Confidentiality Agreement does not purport to be a complete description of the terms and conditions of the Confidentiality Agreement and is qualified in its entirety by reference to the Confidentiality Agreement, a copy of which is attached as an exhibit to the Schedule TO.

 

14.

Dividends and Distributions.

As discussed in Section 13 — “The Transaction Documents — The Merger Agreement — Operating Covenants,” pursuant to the Merger Agreement, from the date of the Merger Agreement until the Merger Effective Time, IMDZ has agreed that it will not (i) (1) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Shares), except for dividends or other distributions by a direct or indirect wholly owned subsidiary of IMDZ to its parent or (2) repurchase, redeem or otherwise reacquire any of its shares of capital stock (including any Shares), or any rights, warrants or options to acquire any shares of its capital stock, other than: (A) repurchases or reacquisitions in the ordinary course of business and at fair market value of Shares outstanding as of the date of the Merger Agreement pursuant to IMDZ’s right (under written commitments in effect as of the date of the Merger Agreement that were made available to Parent) to purchase or reacquire Shares held by an associate of IMDZ, such as a current or former employee, officer, consultant or director of IMDZ only upon termination of such associate’s employment or engagement by IMDZ; or (B) in connection with withholding to satisfy the exercise price and/or tax obligations with respect to IMDZ Options; (ii) split, combine, subdivide or reclassify any shares of its capital stock (including the Shares) or other equity interests; or (iii) sell, issue, grant, deliver, pledge, transfer, encumber or authorize the issuance, sale, delivery, pledge, transfer, encumbrance or grant by IMDZ or its subsidiaries (other than pursuant to agreements in effect as of the date of the Merger Agreement) of (1) any capital stock, equity interest or other security of IMDZ or its subsidiary, (2) any option, call, warrant, restricted securities or right to acquire any capital stock, equity interest or other security of IMDZ or any of its subsidiaries or (3) any instrument convertible into or exchangeable for any capital stock, equity interest or other security of IMDZ or any of its subsidiaries (except that IMDZ may issue Shares as required to be issued upon the exercise of IMDZ Options outstanding as of the date of the Merger Agreement, and IMDZ may issue Shares to employees pursuant to the terms of its equity incentive plan and current offering thereunder, in each case in accordance with their respective terms as of the date of the Merger Agreement).

 

15.

Conditions of the Offer.

Pursuant to the Merger Agreement, Purchaser is not required to accept for payment or pay for any Shares if:

 

  (i)

immediately prior to the expiration of the Offer:

 

  a.

the Minimum Condition is not satisfied;

 

  (ii)

by or at any scheduled expiration date of the Offer:

 

  a.

there is a judgment, temporary restraining order, preliminary or permanent injunction or other order issued by a court of competent jurisdiction, or legal requirement or order promulgated, entered, enforced, enacted, issued or deemed applicable to the Offer or the Merger by any governmental body which directly or indirectly prohibits, or makes illegal, the acquisition of or payment for Shares pursuant to the Offer, or the consummation of the Merger; provided, however, that Parent and Purchaser shall not be permitted to invoke this clause of the Merger Agreement unless they have taken all actions required under the Merger Agreement to have any such order lifted;

 

  b.

the representations and warranties of IMDZ as set forth in the first sentence of Section 3.1(a) (Due Organization), Section 3.3(a), 3.3(c) (first sentence only) and 3.3(d) (Capitalization)

 

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  and Section 3.20 (Authority; Binding Nature of Agreement) of the Merger Agreement are not accurate in all respects (other than such failures to be accurate that are de minimis) as of the date of the Merger Agreement, and are not accurate in all respects (other than such failures to be accurate that are de minimis) at and as of the Offer Acceptance Time as if made on and as of such time (except to the extent any such representation or warranty expressly relates to an earlier date or period, in which case as of such date or period);

 

  c.

the representation and warranty of IMDZ set forth in the first sentence of Section 3.5 (Absence of Changes; No Material Adverse Effect) of the Merger Agreement is not true and correct in all respects as of the date of the Merger Agreement and at and as of the Offer Acceptance Time as if made at and as of the Offer Acceptance Time;

 

  d.

the representations and warranties of IMDZ as set forth in the Merger Agreement (other than the representations referred to in paragraph (b) and (c) above) are not accurate in all respects as of the date of the Merger Agreement, and are not accurate in all respects at and as of the Offer Acceptance Time as if made on and as of such time, except that any inaccuracies in such representations and warranties are disregarded if the circumstances giving rise to all such inaccuracies, individually or in the aggregate, do not constitute, and would not reasonably be expected to have, a Material Adverse Effect (as defined below) (it being understood that, in the case of this paragraph, for purposes of determining the accuracy of such representations and warranties, (i) all “Material Adverse Effect” qualifications and other materiality qualifications contained in such representations and warranties will be disregarded and (ii) the accuracy of those representations or warranties that address matters only as of a specific date will be measured (subject to the applicable materiality standard as set forth in this clause, as the case may be) only as of such date);

 

  e.

IMDZ has not complied with or performed in all material respects all of the covenants and agreements it is required to comply with or perform at or prior to the Offer Acceptance Time;

 

  f.

any consent, approval or clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the HSR Act has not been obtained, received or has not terminated or expired, as the case may be; provided, however, that Parent and Purchaser are not permitted to invoke this clause of the Merger Agreement unless they have taken all actions required under the Merger Agreement to obtain such consent, approval or clearance or cause such terminations or expiration;

 

  g.

Parent fails to receive from IMDZ a certificate, executed by the Chief Executive Officer or Chief Financial Officer of IMDZ, to the effect that the conditions set forth in paragraphs (b), (c), (d) and (e) above shall have been satisfied; or

 

  h.

the Merger Agreement has been terminated in accordance with its terms.

For purposes of the Merger Agreement, an event, occurrence, violation, inaccuracy, circumstance or other matter shall be deemed to have a “Material Adverse Effect” on IMDZ and its subsidiaries, taken as a whole, if such event, occurrence, violation, inaccuracy, circumstance or other matter (whether or not any such matter, considered together with all other matters, would constitute a breach of the representations, warranties, covenants or agreements of IMDZ set forth in the Merger Agreement) (a) had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, financial condition or results of operations of IMDZ and its subsidiaries, taken as a whole, or (b) would prevent the consummation by IMDZ of the Offer or the Merger prior to the End Date; provided, however, that, in the case of clause (a) of this definition, none of the following shall be deemed in and of themselves, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect on IMDZ or its subsidiaries: (i) any change in the market price or trading volume of IMDZ’s stock; (ii) any event, occurrence, violation, inaccuracy, circumstance or other matter directly resulting from the

 

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announcement or pendency of the transactions contemplated by the Merger Agreement (other than for purposes of any representation or warranty contained in Section 3.23 of the Merger Agreement but subject to certain disclosures in the disclosure schedules to the Merger Agreement); (iii) any event, occurrence, circumstance, change or effect to the extent generally affecting the industries in which IMDZ and its subsidiaries operate or in the economy generally or other general business, financial or market conditions, except to the extent that IMDZ and its subsidiaries are adversely affected disproportionately relative to the other participants in such industries or the economy generally, as applicable; (iv) any event, circumstance, change or effect arising directly or indirectly from or otherwise relating to fluctuations in the value of any currency; (v) any event, circumstance, change or effect arising directly or indirectly from or otherwise relating to any act of terrorism, war, national or international calamity or any other similar event, except to the extent that such event, circumstance, change or effect disproportionately affects IMDZ and its subsidiaries relative to other participants in the industries in which IMDZ and its subsidiaries operate or the economy generally, as applicable; (vi) the mere failure of IMDZ to meet internal or analysts’ expectations or projections or the results of operations of IMDZ; or (vii) any event, occurrence, circumstance, change or effect to the extent arising directly or indirectly from or otherwise directly relating to any change in, or any compliance with or action taken for the purpose of complying with, any legal requirement or GAAP (or authoritative interpretations of any legal requirement or GAAP) occurring after the date of the Merger Agreement, except to the extent that such event, circumstance, change or effect disproportionately affects IMDZ and its subsidiaries relative to other participants in the industries in which IMDZ and its subsidiaries operate or the economy generally, as applicable; it being understood that the exceptions in clauses “(i)” and “(vi)” shall not prevent or otherwise affect a determination that the underlying cause of any such decline or failure referred to therein (if not otherwise falling within any of the exceptions provided by clauses “(ii)” through “(v)” or “(vii)” hereof) is or would be reasonably likely to be a Material Adverse Effect.

 

16.

Certain Legal Matters; Regulatory Approvals.

General. Except as otherwise set forth in this Offer to Purchase, based on our examination of publicly available information filed by IMDZ with the SEC and other publicly available information concerning IMDZ, we are not aware of any governmental license or regulatory permit that appears to be material to IMDZ’s business that might be adversely affected by our acquisition of Shares pursuant to the Offer or, except as set forth below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for our acquisition or ownership of Shares pursuant to the Offer. Should any such approval or other action be required or desirable, we currently contemplate that such approval or other action will be sought or taken. Except as described under in the Subsection below titled — “Antitrust Compliance,” we have no current intent to delay the purchase of Shares tendered pursuant to the Offer pending the outcome of any such matter. We are unable to predict whether we will determine that we are required to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained (with or without substantial conditions) or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to IMDZ’s business or certain parts of IMDZ’s business might not have to be disposed of, any of which could cause us to elect to terminate the Offer without purchasing any Shares thereunder. Our obligation under the Offer to accept for payment and pay for Shares is subject to the conditions set forth in Section 15 — “Conditions of the Offer.”

State Takeover Laws. A number of states (including Delaware) have adopted laws and regulations that purport, to varying degrees, to apply to attempts to acquire securities of corporations that are incorporated in, or that have substantial assets, stockholders, principal executive offices or principal places of business in, such states. IMDZ conducts business in a number of states throughout the United States, some of which may have enacted such laws. IMDZ is incorporated in Delaware and is subject to Section 203 of the DGCL. In general, Section 203 of the DGCL prevents an “interested stockholder” (including a person that has the right to acquire 15% or more of the corporation’s outstanding voting stock) from engaging in a “business combination” (defined to include mergers and certain other actions) with a Delaware corporation for a

 

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period of three years following the date such person became an interested stockholder. IMDZ has represented to us and Parent that it has taken all required actions such that the restrictions on business combinations contained in any anti-takeover laws and regulations of any governmental entity, including Section 203 of the DGCL, will not apply to the execution, delivery and performance of the Merger Agreement and to the consummation of the Offer, the Merger and the other transactions contemplated by the Merger Agreement. Except as described in this Offer to Purchase, we do not know whether any of these laws will, by their terms, apply to the Offer or the Merger, and we have not complied with any such laws. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger, we believe there are reasonable bases for contesting such laws.

If any government official or third party seeks to apply any state takeover law to the Offer or the Merger, we will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. If it is asserted that one or more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, we may be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and we may be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In such case, we may not be obligated to accept for payment or pay for any tendered Shares. See Section 15 — “Conditions of the Offer.”

Antitrust Compliance. Under the HSR Act and the rules that have been promulgated thereunder, certain acquisitions of voting securities or assets may not be consummated unless specified information and documentary material (“Premerger Notification and Report Forms”) have been filed with the Antitrust Division and the FTC and certain waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements and may not be completed until the expiration of the waiting period, discussed below, following the filing by Parent and Purchaser, of a Premerger Notification and Report Form.

Parent intends to file a Premerger Notification and Report Form under the HSR Act with the Antitrust Division and the FTC in accordance with the terms of the Merger Agreement. The waiting period applicable to the purchase of Shares pursuant to the Offer will expire at 11:59 p.m. on the 15th calendar day from the time of the filing of the Premerger Notification and Report Form by Parent (unless earlier terminated by the FTC and the Antitrust Division). Parent and IMDZ may agree to modify the timing of their Premerger Notification and Report Form filing to the extent that they mutually agree that doing so may expedite review by the FTC and the Antitrust Division. The Antitrust Division or the FTC may extend the waiting period by determining that an investigation is required and asking Parent to voluntarily withdraw and refile the Premerger Notification and Report Form to allow a second 15-day period, or by requesting additional information or documentary material relevant to the Offer from Parent (a “Second Request”). If a Second Request is made, the waiting period will be extended until 11:59 p.m., Eastern Time, 10 calendar days after the date of Parent’s substantial compliance with that request (unless earlier terminated by the FTC and the Antitrust Division). Only one extension of the waiting period pursuant to a Second Request is authorized by HSR Act rules. Thereafter, the waiting period can be extended only by court order or with Parent’s consent. Although IMDZ is also required to file certain information and documentary material with the Antitrust Division and the FTC in connection with the Offer, neither IMDZ’s failure to make its filing nor its failure to comply with its own Second Request in a timely manner will extend the waiting period with respect to the purchase of Shares pursuant to the Offer. If either 15-day or 10-day waiting period expires on a Saturday, Sunday or legal public holiday, then the period is extended until 11:59 p.m., Eastern Time, the next day that is not a Saturday, Sunday or legal public holiday. Parent intends to make a request pursuant to the HSR Act for early termination of the waiting period applicable to the Offer. There can be no assurance, however, that the 15-day HSR Act waiting period will be terminated early.

The Antitrust Division and the FTC routinely evaluate the legality under the United States antitrust laws of transactions such as our acquisition of Shares pursuant to the Offer. At any time before or after the consummation of any such transactions, the Antitrust Division or the FTC could take such action under the

 

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antitrust laws as it deems necessary or desirable in the public interest, such as seeking to enjoin the purchase of Shares pursuant to the Offer or seeking divestiture of the Shares so acquired or divestiture of some of Parent’s or IMDZ’s assets or any of their respective subsidiaries and affiliates. Private parties and state attorneys general may also bring legal actions under the antitrust laws. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, what the result will be. If any such action is commenced by the FTC, the Antitrust Division, any state or any other person and an order is issued prohibiting the consummation of the Offer, we may not be obligated to consummate the Offer. See Section 15 — “Conditions of the Offer.”

If any condition to the Offer, including the HSR Condition, is not satisfied or waived on any scheduled Expiration Date, we will extend the Offer for successive periods of up to 10 business days per extension until all of the conditions, including the HSR Condition, are satisfied or waived. In addition, we will extend the Offer for any period or periods of time required by any applicable law, or applicable rules, regulations, interpretations or positions of the SEC or its staff. However, we do not have an obligation to extend the Offer beyond the End Date.

Parent and IMDZ and certain of their subsidiaries conduct business in several countries outside of the United States. Other competition agencies with jurisdiction over the transactions could also initiate action to challenge or block the transactions. In addition, in some jurisdictions, a competitor, customer or other third party could initiate a private action under applicable antitrust laws challenging or seeking to enjoin the transactions before the transactions are consummated. Neither Parent nor IMDZ can be sure that a challenge to the transactions will not be made or that, if a challenge is made, that Parent and/or IMDZ, as applicable, will prevail.

Stockholder Approval Not Required. Section 251(h) of the DGCL provides that stockholder approval of a merger is not required if certain requirements are met, including that (i) the acquiring company consummates a tender offer for any and all of the outstanding common stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be entitled to vote on the merger, and (ii) following the consummation of such tender offer, the acquiring company owns at least such percentage of the stock of the company to be acquired that, absent Section 251(h) of the DGCL, would be required to adopt the merger. If the Minimum Condition is satisfied and we accept Shares for payment pursuant to the Offer, we will have received a sufficient number of Shares to ensure that IMDZ will not be required to submit the adoption of the Merger Agreement to a vote of the stockholders of IMDZ. As soon as practicable following the consummation of the Offer and subject to the satisfaction of the remaining conditions set forth in the Merger Agreement, Parent, Purchaser and IMDZ will take all necessary and appropriate action to effect the Merger without a meeting of stockholders of IMDZ in accordance with Section 251(h) of the DGCL.

 

17.

Fees and Expenses.

Credit Suisse is acting as financial advisor to Parent in connection with the acquisition of IMDZ, for which services Credit Suisse will receive customary compensation. Credit Suisse also will be reimbursed for reasonable out-of-pocket expenses incurred by it, including reasonable fees and expenses of outside legal counsel, and Credit Suisse and its respective related persons will be indemnified against certain liabilities, including liabilities under the federal securities laws, arising out of its engagement. In the ordinary course of business, Credit Suisse and its respective affiliates may actively trade or hold the securities of Parent and IMDZ for their own account or for the account of their customers and accordingly, may at any time hold a long or short position in those securities.

We have retained Broadridge Financial Solutions to act as the Information Agent and Computershare Trust Company, N.A. to act as the Depositary & Paying Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone and personal interviews and may request brokers, dealers, banks, trust companies and other nominees to forward materials relating to the Offer to beneficial owners. The Information Agent and the Depositary & Paying Agent each will receive reasonable and customary compensation for their respective services, will be reimbursed for certain

 

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reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under the federal securities laws.

Other than as set forth above, we will not pay any fees or commissions to any broker or dealer or any other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, banks, trust companies and other nominees will, upon request, be reimbursed by us for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers.

 

18.

Miscellaneous.

We are making the Offer to all holders of Shares. We are not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If we become aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares, we will make a good faith effort to comply with that state statute, or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, we cannot comply with the state statute or have such statute declared inapplicable to the Offer, we will not make the Offer to, nor will we accept tenders from or on behalf of, the holders of Shares in that state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser or by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

No person has been authorized to give any information or make any representation on behalf of Purchaser or Parent not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized.

We have filed with the SEC a Tender Offer Statement on Schedule TO, together with exhibits thereto, pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional information with respect to the Offer and may file amendments to our Schedule TO. In addition, IMDZ will file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9, together with exhibits thereto, pursuant to Rule 14d-9 under the Exchange Act, setting forth its recommendation and furnishing certain additional related information. Our Schedule TO and the Solicitation/Recommendation Statement on Schedule 14D-9 and any exhibits or amendments may be examined and copies may be obtained from the SEC in the manner described in Section 8 — “Certain Information Concerning IMDZ.”

CASCADE MERGER SUB INC.

March 5, 2019

 

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SCHEDULE I

DIRECTORS AND EXECUTIVE OFFICERS OF PARENT

The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years of each director and executive officer of Parent are set forth below. Unless otherwise indicated, each occupation set forth opposite an individual’s name refers to employment with Parent. The business address of each director and officer is One Merck Drive, P.O. Box 100, Whitehouse Station, New Jersey 08889. All directors and executive officers listed below are United States citizens. Directors are identified by an asterisk.

 

Name    Current Principal Occupation
or Employment and 5-Year Employment History

Rita Karachun

   Rita A. Karachun has served as Senior Vice President Finance — Global Controller since 2014.

Caroline Litchfield

   Caroline Litchfield has served as Senior Vice President and Treasurer since January 1, 2019. Prior to that, she served as the Senior Vice President, Finance for GHH from 2014.

Timothy G. Dillane

   Timothy G. Dillane has served as Assistant Treasurer since May 2018. Prior to that, he served as the Executive Director, Pension Investments since 2017 and the Director, Pension Investments from 2007 to 2017.

Juanita Lee

   Juanita Lee has served as Assistant Treasurer since October 2011.

Michael G. Schwartz

   Michael G. Schwartz has served as Assistant Treasurer since May 2018. Prior to that he served as Executive Director, GHH Finance from February 2014 to May 2018.

Geralyn Ritter

   Geralyn Ritter has served as Secretary of Parent since November 2017. She previously served as Senior Vice President, Global Public Policy and Corporate Responsibility from 2008 to 2014 of Merck & Co., Inc., and has served as Senior Vice President, Corporate Secretary and Assistant General Counsel of Merck & Co., Inc. since 2012.

Faye C. Brown

   Faye C. Brown has served as Assistant Secretary since February 2018 and as Senior Assistant Secretary of Merck & Co., Inc. since November 2017. Prior to that she was Senior Securities Paralegal at Warner Media, LLC (formerly known as Time Warner, Inc.) from 2014 to 2017.

Katie Fedosz

   Katie Fedosz has served as Assistant Secretary since 2014 and as Assistant Secretary of Merck & Co., Inc. since November 2017.

Jon Filderman

   Jon Filderman has served as Director since May 2015. He previously served as Secretary from 2014 to 2017, and has served as AVP, and prior to that, Managing Counsel, Corporate Legal Group of Parent for the last five years.

Jerome Mychalowych

   Jerome Mychalowych has served as Vice President, Tax since November 2016. Prior to that, he was Senior Vice President, Global Tax, at Zoetis, serving as tax lead for the 2013 spin-off of the company from Pfizer, where he was Vice President, Global Tax for the division.

Salvatore Lombardo

   Salvatore Lombardo has performed the function of Assistant Secretary, Tax since 2014.

 

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Table of Contents

DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER

The name, current principal occupation or employment and material occupations, positions, offices or employment for the past five years, of each director and executive officer of Purchaser are set forth below. Unless otherwise indicated, each occupation set forth opposite an individual’s name refers to employment with Purchaser or its affiliates. The business address of each director and officer is One Merck Drive, P.O. Box 100, Whitehouse Station, New Jersey 08889. All directors and executive officers listed below are United States citizens. Directors are identified by an asterisk.

 

Name    Current Principal Occupation
or Employment and 5-Year Employment History

Rita Karachun

   Rita A. Karachun has served as Senior Vice President Finance — Global Controller since 2014.

Caroline Litchfield

   Caroline Litchfield has served as Senior Vice President and Treasurer since January 1, 2019. Prior to that, she served as the Senior Vice President, Finance for GHH from 2014.

Timothy G. Dillane

   Timothy G. Dillane has served as Assistant Treasurer since May 2018. Prior to that, he served as the Executive Director, Pension Investments since 2017 and the Director, Pension Investments from 2007 to 2017.

Juanita Lee

   Juanita Lee has served as Assistant Treasurer since October 2011.

Michael G. Schwartz

   Michael G. Schwartz has served as Assistant Treasurer since May 2018. Prior to that he served as Executive Director, GHH Finance from February 2014 to May 2018.

Geralyn Ritter

   Geralyn Ritter has served as Secretary of Parent since November 2017. She previously served as Senior Vice President, Global Public Policy and Corporate Responsibility from 2008 to 2014 of Merck & Co., Inc., and has served as Senior Vice President, Corporate Secretary and Assistant General Counsel of Merck & Co., Inc. since 2012.

Faye C. Brown

   Faye C. Brown has served as Assistant Secretary since February 2018 and as Senior Assistant Secretary of Merck & Co., Inc. since November 2017. Prior to that she was Senior Securities Paralegal at Warner Media, LLC (formerly known as Time Warner, Inc.) from 2014 to 2017.

Katie Fedosz

   Katie Fedosz has served as Assistant Secretary since 2014 and as Assistant Secretary of Merck & Co., Inc. since November 2017.

Jon Filderman

   Jon Filderman has served as Director since May 2015. He previously served as Secretary from 2014 to 2017, and has served as AVP, and prior to that, Managing Counsel, Corporate Legal Group of Parent for the last five years.

 

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Table of Contents

Facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates for Shares and any other required documents should be sent to the Depositary & Paying Agent at one of the addresses set forth below:

The Depositary & Paying Agent for the Offer is:

Computershare Trust Company, N.A.

c/o Voluntary Corporate Actions

P.O. Box 43011 Providence, RI 02940-3011

If you have questions or need additional copies of this Offer to Purchase and the Letter of Transmittal, you can contact the Information Agent at its telephone number set forth below. You may also contact your broker, dealer, bank, trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Broadridge Financial Services

(855) 793-5068 (toll free)

www.shareholder.broadridge.com

EX-99.(a)(1)(B)

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL

to Tender Shares of Common Stock

of

Immune Design Corp.

Pursuant to the Offer to Purchase

dated March 5, 2019

by

Cascade Merger Sub Inc.

a wholly owned subsidiary of

Merck Sharp & Dohme Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT ONE MINUTE FOLLOWING 11:59PM, EASTERN TIME, ON APRIL 1, 2019, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

 

THIS FORM SHOULD BE COMPLETED, SIGNED AND SENT TOGETHER WITH ALL OTHER DOCUMENTS, INCLUDING YOUR CERTIFICATES FOR SHARES OF COMMON STOCK, TO COMPUTERSHARE TRUST COMPANY, N.A. (THE “DEPOSITARY & PAYING AGENT”) AT ONE OF THE ADDRESSES SET FORTH BELOW. DELIVERY OF THIS LETTER OF TRANSMITTAL OR OTHER DOCUMENTS OR INSTRUCTIONS TO AN ADDRESS OTHER THAN AS SET FORTH BELOW DOES NOT CONSTITUTE VALID DELIVERY. DELIVERIES TO CASCADE MERGER SUB INC., MERCK SHARP & DOHME CORP., OR BROADRIDGE FINANCIAL SERVICES (THE “INFORMATION AGENT”) WILL NOT BE FORWARDED TO THE DEPOSITARY & PAYING AGENT AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY. DELIVERIES TO THE DEPOSITORY TRUST COMPANY WILL NOT CONSTITUTE VALID DELIVERY TO THE DEPOSITARY & PAYING AGENT.

Mail or deliver this Letter of Transmittal, together with any certificate(s) representing your shares, to:

 

If delivering by mail:   If delivering by express mail, courier or
other expedited service:

C/O Voluntary Corporate Actions

P.O. Box 43011

Providence, RI 02940-3011

 

C/O Voluntary Corporate Actions

Suite V

250 Royall Street

Canton, MA 02021

 

 
DESCRIPTION OF SHARES TENDERED
   

Name(s) and Address(es) of Registered Holder(s)
(Please fill in exactly as name(s)

appear(s) on certificate(s) or DRS Account)

  Shares Tendered
(Attach additional list if necessary — See Instruction 3)
       
     Certificate
Number(s)*
  Total Number of
Shares Represented
by Certificate(s) or
DRS Shares**
  Number of
Shares
Tendered***
       
             
       
             
       
             
       
             
       
             
       
             
       
             
     
   

Total Shares

   

*  Need not be completed by stockholders tendering by book-entry transfer or if Shares are held through a book-entry/direct registration account (a “DRS Account”) maintained by Immune Design Corp.’s transfer agent (such Shares, “DRS Shares”).

**  Need not be completed by stockholders tendering by book-entry transfer.

***  Unless otherwise indicated, it will be assumed that all Shares described above are being tendered. See Instruction 4.


YOU SHOULD READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES OF THE OFFER TO PURCHASE OR THIS LETTER OF TRANSMITTAL MAY BE MADE TO OR OBTAINED FROM THE INFORMATION AGENT AT ITS TELEPHONE NUMBER SET FORTH BELOW.

You must sign this Letter of Transmittal in the appropriate space provided below, with signature guarantee if required, and complete the enclosed Internal Revenue Service Form W-9, if required (or provide an applicable Form W-8).

The Offer (as defined below) is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction or any administrative or judicial action pursuant thereto. Purchaser (as defined below) may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser or by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

This Letter of Transmittal is to be used if certificates representing Shares are being forwarded herewith, if DRS Shares are being tendered or, unless an Agent’s Message (as defined in the below) is utilized, if delivery of Shares is to be made by book-entry transfer into the Depositary & Paying Agent’s account at The Depository Trust Company (the Book-Entry Transfer Facility) pursuant to the procedures set forth in Section 3 of the Offer to Purchase.

If you wish to tender your Shares in the Offer, but: (a) the certificates representing your Shares are not immediately available or cannot be delivered to the Depositary & Paying Agent prior to the Expiration Date (as defined below); (b) you cannot comply with the procedures for book-entry transfer prior to the Expiration Date; or (c) your other required documents cannot be delivered to the Depositary & Paying Agent prior to the Expiration Date, you may still tender your Shares by complying with the guaranteed delivery procedures described in Section 3 of the Offer to Purchase. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary & Paying Agent.

 

1


NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY

 

CHECK HERE IF SHARE CERTIFICATES HAVE BEEN MUTILATED, LOST, STOLEN OR DESTROYED. SEE INSTRUCTION 9.

 

CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER INTO THE DEPOSITARY & PAYING AGENT’S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:

 

Name of Tendering Institution:  

 

 

Account Number:  

 

 

Transaction Code:  

 

 

CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY & PAYING AGENT AND COMPLETE THE FOLLOWING:

 

Name(s) of Tendering Stockholder(s):    

 

 

Date of Execution of Notice of Guaranteed Delivery:                                     , 2019

 

Name of Eligible Institution which Guaranteed Delivery:    

 

 

If Delivery is by Book-Entry Transfer:  

 

Name of Tendering Institution:    

 

 

Account Number:    

 

 

Transaction Code Number:    

 

 

2


To Computershare Trust Company, N.A.:

The undersigned hereby tenders to Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of Merck Sharp & Dohme Corp., a New Jersey corporation (“Parent”), and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation, the above-described shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), a Delaware corporation, pursuant to Purchaser’s offer to purchase all outstanding Shares for $5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 5, 2019 (together with any amendments or supplements thereto, the “Offer to Purchase”), receipt of which is hereby acknowledged, and in this letter of transmittal (together with any amendments or supplements hereto, this “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). The Offer expires at one minute following 11:59 PM Eastern Time, on April 1, 2019, unless extended by Purchaser as described in the Offer to Purchase (as may be extended from time to time, the “Expiration Date”). Purchaser may assign the Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 20, 2019, by and among IMDZ, Purchaser and Parent to any affiliate of Purchaser or Parent (provided that such assignment does not impede or delay the consummation of the transactions contemplated by the Merger Agreement); provided that no such assignment will relieve Parent of its obligations under the Merger Agreement.

Upon the terms and subject to the conditions of the Offer and effective upon acceptance for payment of and payment for the Shares tendered herewith, the undersigned hereby sells, assigns and transfers to, or upon the order of Purchaser all right, title and interest in and to all the Shares that are being tendered hereby (and any and all other Shares or other securities issued or issuable in respect thereof on or after March 5, 2019) and irrevocably appoints Purchaser the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and all such other Shares or securities), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to: (i) deliver certificates representing such Shares (and all such other Shares or securities), transfer ownership of such Shares (and all other such Shares or securities) held in a DRS Account, or transfer ownership of such Shares (and all such other Shares or securities) on the account books maintained by the Book-Entry Transfer Facility, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser; (ii) present such Shares (and all such other Shares or securities) for transfer on the books of IMDZ; and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and all such other Shares or securities), all in accordance with the terms of the Offer.

By executing this Letter of Transmittal (or taking action resulting in the delivery of an Agent’s Message), the undersigned hereby irrevocably appoints Faye C. Brown and Jon Filderman in their respective capacities as officers of Purchaser, and any other person designated in writing by Purchaser, as the true and lawful agents, attorneys, attorneys-in-fact and proxies of the undersigned, each with full power of substitution to: (i) vote at any annual or special meeting of IMDZ’s stockholders or any adjournment or postponement thereof, by written consent or otherwise, in such manner as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper; and (ii) otherwise act as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper, in each case with respect to all of the Shares tendered hereby and accepted for payment by Purchaser (and any and all other Shares or other securities issued or issuable in respect thereof on or after March 5, 2019); provided that this appointment will be effective if and when, and only to the extent that, Purchaser accepts such Shares for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares by Purchaser in accordance with the terms of the Offer. Such acceptance for payment shall, without further action, revoke any other powers of attorney, proxies or consents granted by the undersigned at any time with respect to such Shares (and all such other Shares or securities), and no subsequent powers of attorney or proxies will be given nor subsequent consents executed by the undersigned with respect thereto (and, if previously given or executed, will cease to be effective).

 

3


The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered herein (and any and all other Shares or other securities issued or issuable in respect thereof on or after March 5, 2019) and that when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims. The undersigned hereby represents and warrants that the certificates representing such Shares have been endorsed to the undersigned in blank, that the undersigned is a participant whose name appears on a security position listing as the owner of such Shares in a DRS Account, or that the undersigned is a participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of such Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary & Paying Agent or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and all such other Shares or securities).

All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.

The undersigned understands that the valid tender of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions to this Letter of Transmittal will constitute the undersigned’s acceptance of the terms and conditions of the Offer. Purchaser’s acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms or conditions of any such extension or amendment). Without limiting the foregoing, if the price to be paid in the Offer is amended in accordance with the terms of the merger agreement described in the Offer, the price to be paid to the undersigned will be the amended price notwithstanding the fact that a different price is stated in this Letter of Transmittal. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, Purchaser may not be required to accept for payment any Shares tendered hereby and may terminate the Offer in accordance with the terms of the merger agreement described in the Offer and return all tendered Shares to tendering stockholders. Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), requires Purchaser to pay the consideration offered or return the Shares tendered promptly after the termination or withdrawal of the Offer. If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, including if certificates are submitted for more Shares than are tendered, (i) in the case of certificated Shares, Purchaser will return certificates (or issue new certificates) representing unpurchased or untendered Shares to the undersigned, (ii) in the case of DRS Shares, the unpurchased Shares will be credited to the undersigned’s DRS Account or (iii) in the case of Shares delivered by book-entry transfer into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3 of the Offer to Purchase, the unpurchased Shares will be credited to the undersigned’s account maintained at the Book-Entry Transfer Facility, without expense to the undersigned, promptly following the expiration, termination or withdrawal of the Offer.

Unless otherwise indicated in the box labeled “Special Payment Instructions,” please issue the check for the purchase price of any Shares purchased and, if appropriate, return any Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing above under “Description of Shares Tendered” (and, in the case of DRS Shares or Shares tendered by book-entry transfer, by credit to the DRS Account or the account at the Book-Entry Transfer Facility, respectively). Similarly, unless otherwise indicated in the box labeled “Special Delivery Instructions,” please mail the check for the purchase price of any Shares purchased and, if appropriate, any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under “Description of Shares Tendered.” In the event that the boxes labeled “Special Payment Instructions” and “Special Delivery Instructions” are both completed, please issue the check for the purchase price of any Shares purchased and, if appropriate, return any Shares not tendered or accepted for payment in the name(s) of, and mail such check and

 

4


any certificates to, the person(s) so indicated. The undersigned recognizes that Purchaser has no obligation, pursuant to the completion of the box labeled “Special Payment Instructions,” to transfer any Shares from the name of the registered holder(s) thereof if Purchaser does not accept for payment any of such Shares so tendered.

 

5


SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 6, 7 and 8)

 

To be completed ONLY if the check for the purchase price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) or certificates for Shares not tendered or accepted for payment are to be issued in the name of someone other than the registered holder(s) or if DRS Shares or Shares tendered by book-entry transfer which are not accepted for payment are to be returned by credit to a DRS Account or an account maintained at a Book-Entry Transfer Facility other than the account designated above.

 

Issue   ☐  check

        ☐  certificates to:

 

Name:                                                                                    

(Please Print)

 

Address:                                                                                

 

                                                                                                 

(Include Zip Code)

 

Taxpayer Identification Number:                                

 

   Credit DRS Shares not accepted for payment to the DRS Account set forth below:

 

Account Name:                                                                  

 

 

    

SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, 7 and 8)

 

To be completed ONLY if the check for the purchase price of Shares purchased (less the amount of any federal income and backup withholding tax required to be withheld) or certificates for Shares not tendered or accepted for payment are to be mailed to someone other than the registered holder(s) or to the registered holder(s) at an address other than the address(es) appearing above under “Description of Shares Tendered.”

 

Issue   ☐  check

        ☐  certificates to:

 

Name:                                                                                    

(Please Print)

 

Address:                                                                                

 

                                                                                                 

(Include Zip Code)

 

6


SIGN HERE

(Please complete the enclosed Internal Revenue Service Form W-9 or provide an applicable Form W-8)

 

  Sign Here:       
  Sign Here:       
Signature(s) of Stockholder(s)  
  Dated                     , 2019  
  Name(s):      
  Business name, if different from above:      
(Please Print)  
  Capacity (Full Title):      
  Address:      
 

 

 
(Include Zip Code)  
  Area Code and Telephone Number:      

(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock certificate(s), DRS Account or security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.)

Guarantee of Signature(s)

(If required; see Instructions 1 and 5)

(For use by Eligible Institutions only.

Place medallion guarantee in space below.)

 

  Name of Firm:

      

  Address:

      
  

 

 
(Include Zip Code)  
  Authorized Signature:       
  Name:       
(Please Print)
  Area Code and Telephone Number:       

  Dated                     , 2019

 

7


INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1.    Guarantee of Signatures.    Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member of a recognized Medallion Program approved by The Securities Transfer Association, Inc., including the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program and the New York Stock Exchange, Inc. Medallion Signature Program or any other “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 under the Exchange Act) (each, an “Eligible Institution”). No signature guarantee is required if (i) this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, includes any participant in any of the Book-Entry Transfer Facility’s systems whose name appears on a security position listing as the holder(s) of Shares) tendered herewith and such holder(s) have not completed either the box labeled “Special Payment Instructions” or the box labeled “Special Delivery Instructions” on this Letter of Transmittal or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5.

2.    Delivery of Letter of Transmittal and Shares.    This Letter of Transmittal is to be used if certificates representing the Shares are being forwarded herewith, if DRS Shares are being tendered, or, unless an Agent’s Message is utilized, if delivery of Shares is to be made by book-entry transfer into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Certificates for all Shares (except DRS Shares), or a confirmation of a book-entry transfer into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees (or, in the case of a book-entry delivery of Shares, an Agent’s Message in lieu of the Letter of Transmittal) and any other documents required by this Letter of Transmittal must be received by the Depositary & Paying Agent at one of its addresses set forth on the front page of this Letter of Transmittal prior to the Expiration Date.

Stockholders whose certificates representing their Shares are not immediately available or who cannot deliver their certificates and all other required documents to the Depositary & Paying Agent or complete the procedures for book-entry transfer prior to the Expiration Date may tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.

Under the guaranteed delivery procedures:

(i) such tender must be made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by Purchaser with the Offer to Purchase must be received by the Depositary & Paying Agent prior to the Expiration Date; and

(iii) the certificates representing all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility of all Shares delivered by book-entry transfer, together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) together with any required signature guarantees (or, in the case of a book-entry delivery of Shares, an Agent’s Message in lieu of the Letter of Transmittal) and any other required documents, must be received by the Depositary & Paying Agent within two trading days after the date of execution of the Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. A “trading day” is any day on which the Nasdaq Global Market is open for business. “Agents Message” means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary & Paying Agent and forming a part of a book-entry confirmation stating that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such book-entry confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce that agreement against the participant.

 

8


The method of delivery of Shares, including delivery through a DRS Account or the Book-Entry Transfer Facility, this Letter of Transmittal and all other required documents is at the election and sole risk of the tendering stockholder, and delivery will be deemed made only when actually received by the Depositary & Paying Agent (including, in the case of a book-entry delivery, by confirmation of a book-entry transfer of such Shares into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility). If certificates representing Shares are sent by mail, we recommend you use registered mail with return receipt requested, properly insured, in time to be received on or prior to the Expiration Date. In all cases, you should allow sufficient time to ensure timely delivery.

No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of the Shares.

3.    Inadequate Space.    If the space provided herein is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate signed schedule attached hereto.

4.    Partial Tenders (Not Applicable to Stockholders Who Tender by Book-Entry Transfer).    If fewer than all the Shares represented by any certificate delivered to the Depositary & Paying Agent or held in any DRS Account are to be tendered, fill in the number of Shares which are to be tendered in the box labeled “Number of Shares Tendered.” In such case, a new certificate for the remainder of the Shares represented by the old certificate will be issued and sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration, termination or withdrawal of the Offer. All DRS Shares or Shares represented by certificates delivered to the Depositary & Paying Agent will be deemed to have been tendered unless otherwise indicated.

5.    Signatures on Letter of Transmittal; Stock Powers and Endorsements.    If this Letter of Transmittal is signed by the registered holder(s) of any certificated Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificates without alteration or any change whatsoever.

If any of the Shares tendered hereby are held of record by two or more joint owners, all such persons must sign this Letter of Transmittal.

If any of the Shares tendered hereby are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.

If this Letter of Transmittal is signed by the registered holder(s) of any certificated Shares tendered hereby, no endorsements of such certificates or separate stock powers are required unless payment of the purchase price is to be made, or Shares not tendered or accepted for payment are to be returned, to a person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by, payment of the purchase price is to be made to, or Shares not tendered or accepted for payment are to be returned in the name of, a person other than the registered holder(s) of the Shares tendered hereby, any certificates representing such Shares must be properly endorsed for transfer or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates representing such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing and submit proper evidence satisfactory to Purchaser of his or her authority to so act.

 

9


6.    Stock Transfer Taxes.    Purchaser will pay any stock transfer taxes with respect to the sale and transfer of any Shares to it or by its order pursuant to the Offer. If, however, such stock transfer taxes are payable because payment of the purchase price is to be made to, or Shares not tendered or accepted for payment are to be returned in the name of, any person other than the registered holder(s) of the Shares tendered hereby, or if a transfer tax is imposed for any reason other than the sale or transfer of Shares to Purchaser pursuant to the Offer, then the amount of any stock transfer taxes will need to be paid by the holder (whether imposed on the registered holder(s), such other person or otherwise) and satisfactory evidence of the payment of such taxes, or exemption therefrom, will need to be submitted herewith.

7.    Special Payment and Delivery Instructions.    If the check for the purchase price of any Shares purchased is to be issued, or any Shares not tendered or accepted for payment are to be returned, in the name of a person other than the person(s) signing this Letter of Transmittal, or if the check or any certificates for Shares not tendered or accepted for payment are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than the address(es) appearing above under “Description of Shares Tendered,” the appropriate boxes on this Letter of Transmittal should be completed. A stockholder tendering DRS Shares or Shares by book-entry transfer may request that Shares not purchased be credited to such DRS Account or account at the Book-Entry Transfer Facility as such stockholder may designate in the box labeled “Special Payment Instructions.” If no such instructions are given, any such Shares not purchased will be returned by crediting the DRS Account or account at the Book-Entry Transfer Facility designated above.

8.    Internal Revenue Service Form W-9 or Form W-8.    Under the U.S. federal income tax laws, unless certain certification requirements are met, the Depositary & Paying Agent generally will be required to withhold at the applicable backup withholding rate (currently 24%) from certain payments made to stockholders pursuant to the Offer. In order to avoid such backup withholding, each tendering stockholder, and, if applicable, each other payee, that is a United States person for U.S. federal income tax purposes must provide the Depositary & Paying Agent with the taxpayer’s correct taxpayer identification number and certify that such stockholder or payee is not subject to backup withholding by completing the enclosed Internal Revenue Service Form W-9. In general, if a stockholder or payee is an individual, the taxpayer identification number is the social security number of such individual. If the stockholder or payee does not provide the Depositary & Paying Agent with its correct taxpayer identification number, the stockholder or payee may be subject to a $50 penalty imposed by the Internal Revenue Service. Certain stockholders or payees (including stockholders and payees who are not United States persons for U.S. federal income tax purposes) are not subject to these backup withholding and reporting requirements. In order to satisfy the Depositary & Paying Agent that a foreign stockholder or payee qualifies as an exempt recipient, such stockholder or payee must submit to the Depositary & Paying Agent a properly completed Internal Revenue Service Form W-8, generally Form W-8BEN (which the Depositary & Paying Agent will provide upon request), signed under penalties of perjury, attesting to that stockholder or payee’s non-U.S. status. Forms W-8BEN can be obtained from the Depositary & Paying Agent or the Internal Revenue Service (www.irs.gov/formspubs/index.html). For further information concerning backup withholding and instructions for completing the Internal Revenue Service Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Internal Revenue Service Form W-9 if Shares are held in more than one name), consult the instructions to the enclosed Internal Revenue Service Form W-9.

Failure to complete the Internal Revenue Service Form W-9 or provide an applicable Form W-8 will not, by itself, cause Shares to be deemed invalidly tendered but may require the Depositary & Paying Agent to backup withhold at the applicable backup withholding rate on any payments made pursuant to the Offer. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld, or if withholding results in an overpayment of taxes, a refund may generally be obtained, provided in each case that the required information is timely furnished to the Internal Revenue Service. Each tendering stockholder should consult with a tax advisor regarding (i) qualifications for exemption from backup withholding and (ii) the procedure for obtaining the exemption.

 

10


9.    Mutilated, Lost, Stolen or Destroyed Certificates.    If any certificate(s) representing Shares to be tendered have been mutilated, lost, stolen or destroyed, stockholders should (i) complete this Letter of Transmittal and check the appropriate box above and (ii) contact IMDZ’s transfer agent, Computershare Trust Company, N.A., immediately by calling 1-877-373-6374. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, mutilated, destroyed or stolen certificates have been followed.

10.    Requests for Assistance or Additional Copies.    If you have questions or need assistance, you should contact the Information Agent at its telephone number set forth on the back cover of this Letter of Transmittal. If you require additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery, the Internal Revenue Service Form W-9 or other related materials, you should contact the Information Agent. Copies will be furnished promptly at Purchaser’s expense.

11.    Waiver of Conditions; Irregularities.    Purchaser will determine, in its sole discretion, all questions as to the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares, and its determination will be final and binding. Purchaser reserves the absolute right to reject any or all tenders of Shares that it determines not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of its counsel, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in any tender of Shares. No tender of Shares will be deemed to have been validly made until all defects and irregularities with respect to such tender have been cured or waived. None of Purchaser, the Depositary & Paying Agent, the Information Agent or any other person will be under any duty to give notification of any defect or irregularity in tenders or waiver of any such defect or irregularity or incur any liability for failure to give any such notification. Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding.

IMPORTANT: This Letter of Transmittal (or a manually signed facsimile thereof) together with any signature guarantees, or, in the case of a book-entry transfer, an Agent’s Message, and any other required documents, must be received by the Depositary & Paying Agent prior to the Expiration Date and either certificates for tendered Shares must be received by the Depositary & Paying Agent (except in the case of DRS Shares) or Shares must be delivered pursuant to the procedures for book-entry transfer, in each case prior to the Expiration Date, or the tendering stockholder must comply with the procedures for guaranteed delivery.

 

11


Print or type.

See Specific Instructions on page 3.

 

Form   W-9

(Rev. October 2018)

Department of the Treasury

Internal Revenue Service

  

Request for Taxpayer

Identification Number and Certification

 

u Go to www.irs.gov/FormW9 for instructions and the latest information.

 

Give Form to the requester. Do not
send to the IRS.

1  Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.

 

2  Business name/disregarded entity name, if different from above

 

   
3  Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven
boxes.

 

  4  Exemptions (codes apply only to
certain entities, not individuals; see
instructions on page 3):
 
 

Individual/sole proprietor or
single-member LLC

 

   

C Corporation

 

   

S Corporation

 

   

Partnership

 

   

Trust/estate

 

 

 

Exempt payee code (if any)               

 

☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership)  u                                  

 

   Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC if the
LLC is classified as a single-member LLC that is disregarded from the owner unless the owner of the LLC is another LLC that is
not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single-member LLC that is disregarded from the owner
should check the appropriate box for the tax classification of its owner.

 

 

Exemption from FATCA reporting code
(if any)                                      

 

(Applies to accounts maintained outside the U.S.)

 

☐ Other (see instructions)  u

 

 

                                       

5  Address (number, street, and apt. or suite no.) See instructions.

Requester’s name and address (optional)

 

6  City, state, and ZIP code

 

7  List account number(s) here (optional)

 

 

Part I    Taxpayer Identification Number (TIN)

 

Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.

 

Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter.

                     
 

Social security number

   
                                       
  or  
 

Employer identification number

 
     
                                       
Part II    Certification

Under penalties of perjury, I certify that:

 

1.   The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and

 

2.   I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and

 

3.   I am a U.S. citizen or other U.S. person (defined below); and

 

4.   The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct.

Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.

 

Sign
Here
   Signature of
U.S. person  
u
     Date  u

General Instructions

Section references are to the Internal Revenue Code unless otherwise noted.

Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9.

Purpose of Form

An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following.

• Form 1099-INT (interest earned or paid)

 

• Form 1099-DIV (dividends, including those from stocks or mutual funds)

• Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)

• Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)

• Form 1099-S (proceeds from real estate transactions)

• Form 1099-K (merchant card and third party network transactions)

• Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)

• Form 1099-C (canceled debt)

• Form 1099-A (acquisition or abandonment of secured property)

Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.

If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later

 

 

 

 

       Cat. No. 10231X  

Form W-9 (Rev. 10-2018)


Form W-9 (Rev. 10-2018)

Page 2

 

 

By signing the filled-out form, you:

1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued),

2. Certify that you are not subject to backup withholding, or

3. Claim exemption from backup withholding if you are a U.S. exempt payee. If applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners’ share of effectively connected income, and

4. Certify that FATCA code(s) entered on this form (if any) indicating that you are exempt from the FATCA reporting, is correct. See What is FATCA reporting, later, for further information.

Note: If you are a U.S. person and a requester gives you a form other than Form W-9 to request your TIN, you must use the requester’s form if it is substantially similar to this Form W-9.

Definition of a U.S. person. For federal tax purposes, you are considered a U.S. person if you are:

An individual who is a U.S. citizen or U.S. resident alien;

A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States;

An estate (other than a foreign estate); or

A domestic trust (as defined in Regulations section 301.7701-7).

Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax under section 1446 on any foreign partners’ share of effectively connected taxable income from such business. Further, in certain cases where a Form W-9 has not been received, the rules under section 1446 require a partnership to presume that a partner is a foreign person, and pay the section 1446 withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid section 1446 withholding on your share of partnership income.

In the cases below, the following person must give Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States.

In the case of a disregarded entity with a U.S. owner, the U.S. owner of the disregarded entity and not the entity;

In the case of a grantor trust with a U.S. grantor or other U.S. owner, generally, the U.S. grantor or other U.S. owner of the grantor trust and not the trust; and

In the case of a U.S. trust (other than a grantor trust), the U.S. trust (other than a grantor trust) and not the beneficiaries of the trust.

Foreign person. If you are a foreign person or the U.S. branch of a foreign bank that has elected to be treated as a U.S. person, do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities).

Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a “saving clause.” Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the payee has otherwise become a U.S. resident alien for tax purposes.

If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items.

1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien.

2. The treaty article addressing the income.

3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions.

4. The type and amount of income that qualifies for the exemption from tax.

5. Sufficient facts to justify the exemption from tax under the terms of the treaty article.

Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption.

If you are a nonresident alien or a foreign entity, give the requester the appropriate completed Form W-8 or Form 8233.

Backup Withholding

What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 24% of such payments. This is called “backup withholding.” Payments that may be subject to backup withholding include interest, tax-exempt interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, payments made in settlement of payment card and third party network transactions, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding.

You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return.

Payments you receive will be subject to backup withholding if:

1. You do not furnish your TIN to the requester,

2. You do not certify your TIN when required (see the instructions for Part II for details),

3. The IRS tells the requester that you furnished an incorrect TIN,

4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or

5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only).

Certain payees and payments are exempt from backup withholding. See Exempt payee code, later, and the separate Instructions for the Requester of Form W-9 for more information.

Also see Special rules for partnerships, earlier.

What is FATCA Reporting?

The Foreign Account Tax Compliance Act (FATCA) requires a participating foreign financial institution to report all United States account holders that are specified United States persons. Certain payees are exempt from FATCA reporting. See Exemption from FATCA reporting code, later, and the Instructions for the Requester of Form W-9 for more information.

Updating Your Information

You must provide updated information to any person to whom you claimed to be an exempt payee if you are no longer an exempt payee and anticipate receiving reportable payments in the future from this person. For example, you may need to provide updated information if you are a C corporation that elects to be an S corporation, or if you no longer are tax exempt. In addition, you must furnish a new Form W-9 if the name or TIN changes for the account; for example, if the grantor of a grantor trust dies.

Penalties

Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

 


Form W-9 (Rev. 10-2018)

Page 3

 

 

Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties.

Specific Instructions

Line 1

You must enter one of the following on this line; do not leave this line blank. The name should match the name on your tax return.

If this Form W-9 is for a joint account (other than an account maintained by a foreign financial institution (FFI)), list first, and then circle, the name of the person or entity whose number you entered in Part I of Form W-9. If you are providing Form W-9 to an FFI to document a joint account, each holder of the account that is a U.S. person must provide a Form W-9.

a.  Individual. Generally, enter the name shown on your tax return. If you have changed your last name without informing the Social Security Administration (SSA) of the name change, enter your first name, the last name as shown on your social security card, and your new last name.

Note: ITIN applicant: Enter your individual name as it was entered on your Form W-7 application, line 1a. This should also be the same as the name you entered on the Form 1040/1040A/1040EZ you filed with your application.

b.  Sole proprietor or single-member LLC. Enter your individual name as shown on your 1040/1040A/1040EZ on line 1. You may enter your business, trade, or “doing business as” (DBA) name on line 2.

c.  Partnership, LLC that is not a single-member LLC, C corporation, or S corporation. Enter the entity’s name as shown on the entity’s tax return on line 1 and any business, trade, or DBA name on line 2.

d.  Other entities. Enter your name as shown on required U.S. federal tax documents on line 1. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on line 2.

e.  Disregarded entity. For U.S. federal tax purposes, an entity that is disregarded as an entity separate from its owner is treated as a “disregarded entity.” See Regulations section 301.7701-2(c)(2)(iii). Enter the owner’s name on line 1. The name of the entity entered on line 1 should never be a disregarded entity. The name on line 1 should be the name shown on the income tax return on which the income should be reported. For example, if a foreign LLC that is treated as a disregarded entity for U.S. federal tax purposes has a single owner that is a U.S. person, the U.S. owner’s name is required to be provided on line 1. If the direct owner of the entity is also a disregarded entity, enter the first owner that is not disregarded for federal tax purposes. Enter the disregarded entity’s name on line 2, “Business name/disregarded entity name.” If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN.

Line 2

If you have a business name, trade name, DBA name, or disregarded entity name, you may enter it on line 2.

Line 3

Check the appropriate box on line 3 for the U.S. federal tax classification of the person whose name is entered on line 1. Check only one box on line 3.

IF the entity/person on line 1 is

a(n) . . .

  THEN check the box for . . .
  Corporation   Corporation

  Individual

 

  Sole proprietorship, or

 

  Single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes.

 

  Individual/sole proprietor or single-member LLC

  LLC treated as a partnership for U.S. federal tax purposes,

 

  LLC that has filed Form 8832 or 2553 to be taxed as a corporation, or

 

  LLC that is disregarded as an entity separate from its owner but the owner is another LLC that is not disregarded for U.S. federal tax purposes.

 

  Limited liability company and enter the appropriate tax classification. (P= Partnership; C= C corporation;
or S= S corporation)

  Partnership

 

  Partnership

  Trust/estate

 

  Trust/estate

Line 4, Exemptions

If you are exempt from backup withholding and/or FATCA reporting, enter in the appropriate space on line 4 any code(s) that may apply to you.

Exempt payee code.

  Generally, individuals (including sole proprietors) are not exempt from backup withholding.

  Except as provided below, corporations are exempt from backup withholding for certain payments, including interest and dividends.

  Corporations are not exempt from backup withholding for payments made in settlement of payment card or third party network transactions.

  Corporations are not exempt from backup withholding with respect to attorneys’ fees or gross proceeds paid to attorneys, and corporations that provide medical or health care services are not exempt with respect to payments reportable on Form 1099-MISC.

The following codes identify payees that are exempt from backup withholding. Enter the appropriate code in the space in line 4.

1 – An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2)

2 – The United States or any of its agencies or instrumentalities

3 – A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities

4 – A foreign government or any of its political subdivisions, agencies, or instrumentalities

5 – A corporation

6 – A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or possession

7 – A futures commission merchant registered with the Commodity Futures Trading Commission

8 – A real estate investment trust

9 – An entity registered at all times during the tax year under the Investment Company Act of 1940

10 – A common trust fund operated by a bank under section 584(a)

11 – A financial institution

12 – A middleman known in the investment community as a nominee or custodian

13 – A trust exempt from tax under section 664 or described in section 4947

 


Form W-9 (Rev. 10-2018)

Page 4

 

 

The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13.

 

IF the payment is for . . .   THEN the payment is exempt for . . .

Interest and dividend payments

 

 

All exempt payees except
for 7

 

Broker transactions  

Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired prior to 2012.

 

Barter exchange transactions and patronage dividends

 

  Exempt payees 1 through 4

Payments over $600 required to be reported and direct sales over $5,0001

 

  Generally, exempt payees
1 through 52

Payments made in settlement of payment card or third party network transactions

 

  Exempt payees 1 through 4

 

1 

See Form 1099-MISC, Miscellaneous Income, and its instructions.

2 

However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency.

Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA exemption code.

A – An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)

B – The United States or any of its agencies or instrumentalities

C – A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities

D – A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i)

E – A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)

F – A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state

G – A real estate investment trust

H – A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940

I – A common trust fund as defined in section 584(a)

J – A bank as defined in section 581

K – A broker

L – A trust exempt from tax under section 664 or described in section 4947(a)(1)

M – A tax exempt trust under a section 403(b) plan or section 457(g) plan

Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed.

Line 5

Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the one the requester already has on file, write NEW

at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records.

Line 6

Enter your city, state, and ZIP code.

Part I. Taxpayer Identification Number (TIN)

Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.

If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.

If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.

Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN combinations.

How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/Businesses and clicking on Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days.

If you are asked to complete Form W-9 but do not have a TIN, apply for a TIN and write “Applied For” in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.

Note: Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon.

Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.

Part II. Certification

To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, 4, or 5 below indicates otherwise.

For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign. Exempt payees, see Exempt payee code, earlier.

Signature requirements. Complete the certification as indicated in items 1 through 5 below.

1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.

2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.

3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.

4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions,

 


Form W-9 (Rev. 10-2018)

Page 5

 

 

payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).

5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), ABLE accounts (under section 529A), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification.

What Name and Number To Give the Requester

 

   
For this type of account:   Give name and SSN of:
 
  1.    

Individual

  The individual
 
  2.     Two or more individuals (joint account) other than an account maintained by an FFI   The actual owner of the account or, if combined funds, the first individual on the account1
 
  3.     Two or more U.S. persons (joint account maintained by an FFI)   Each holder of the account
 
  4.     Custodial account of a minor (Uniform Gift to Minors Act)   The minor2
 
  5.     a. The usual revocable savings trust (grantor is also trustee)   The grantor-trustee1
  b. So-called trust account that is not a legal or valid trust under state law   The actual owner1
 
  6.     Sole proprietorship or disregarded entity owned by an individual   The owner3
 
  7.     Grantor trust filing under Optional Form 1099 Filing Method 1 (see Regulations section 1.671-4(b)(2)(i)(A))   The grantor*
   
For this type of account:   Give name and EIN of:
 
  8.     Disregarded entity not owned by an individual   The owner
 
  9.     A valid trust, estate, or pension trust   Legal entity4
 
  10.     Corporation or LLC electing corporate status on Form 8832 or Form 2553   The corporation
 
  11.     Association, club, religious, charitable, educational, or other tax-exempt organization   The organization
 
  12.     Partnership or multi-member LLC   The partnership
 
  13.     A broker or registered nominee   The broker or nominee
 
  14.     Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments   The public entity
 
  15.     Grantor trust filing under the Form 1041 Filing Method or the Optional Form 1099 Filing Method 2 (see Regulations section 1.671-4(b)(2)(i)(B))   The trust

 

1

List first and circle the name of the person whose number you furnish. If only one person on a joint account has an SSN, that person’s number must be furnished.

2 

Circle the minor’s name and furnish the minor’s SSN.

3

You must show your individual name and you may also enter your business or DBA name on the “Business name/disregarded entity” name line. You

  may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.
4

List first and circle the name of the trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules for partnerships, earlier.

 

*Note:

The grantor also must provide a Form W-9 to trustee of trust.

Note: If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed.

Secure Your Tax Records From Identity Theft

Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information, without your permission, to commit fraud or other crimes. An identity thief may use your SSN to get a job or may file a tax return using your SSN to receive a refund.

To reduce your risk:

Protect your SSN,

Ensure your employer is protecting your SSN, and

Be careful when choosing a tax preparer.

If your tax records are affected by identity theft and you receive a notice from the IRS, respond right away to the name and phone number printed on the IRS notice or letter.

If your tax records are not currently affected by identity theft but you think you are at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Theft Hotline at 1-800-908-4490 or submit Form 14039.

For more information, see Pub. 5027, Identity Theft Information for Taxpayers.

Victims of identity theft who are experiencing economic harm or a systemic problem, or are seeking help in resolving tax problems that have not been resolved through normal channels, may be eligible for Taxpayer Advocate Service (TAS) assistance. You can reach TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.

Protect yourself from suspicious emails or phishing schemes. Phishing is the creation and use of email and websites designed to mimic legitimate business emails and websites. The most common act is sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information that will be used for identity theft.

The IRS does not initiate contacts with taxpayers via emails. Also, the IRS does not request personal detailed information through email or ask taxpayers for the PIN numbers, passwords, or similar secret access information for their credit card, bank, or other financial accounts.

If you receive an unsolicited email claiming to be from the IRS, forward this message to phishing@irs.gov. You may also report misuse of the IRS name, logo, or other IRS property to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. You can forward suspicious emails to the Federal Trade Commission at spam@uce.gov or report them at www.ftc.gov/complaint. You can contact the FTC at www.ftc.gov/idtheft or 877-IDTHEFT (877-438-4338). If you have been the victim of identity theft, see www.IdentityTheft.gov and Pub. 5027.

Visit www.irs.gov/IdentityTheft to learn more about identity theft and how to reduce your risk.

 

 

 

 

Privacy Act Notice

Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons (including federal agencies) who are required to file information returns with the IRS to report interest, dividends, or certain other income paid to you; mortgage interest you paid; the acquisition or abandonment of secured property; the cancellation of debt; or contributions you made to an IRA, Archer MSA, or HSA. The person collecting this form uses the information on the form to file information returns with the IRS, reporting the above information.

Routine uses of this information include giving it to the Department of Justice for civil and criminal litigation and to cities, states, the District of Columbia, and U.S. commonwealths and possessions for use in administering their laws. The information also may be disclosed to other countries under a treaty, to federal and state agencies to enforce civil and criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Under section 3406, payers must generally withhold a percentage of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to the payer. Certain penalties may also apply for providing false or fraudulent information.


The Information Agent for the Offer is:

Broadridge Financial Services

(855) 793-5068 (toll free)

www.shareholder.broadridge.com

EX-99.(a)(1)(C)

Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY

to Tender Shares of Common Stock

of

Immune Design Corp.

Pursuant to the Offer to Purchase

dated March 5, 2019

by

Cascade Merger Sub Inc.

a wholly owned subsidiary of

Merck Sharp & Dohme Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT ONE MINUTE FOLLOWING 11:59 PM, EASTERN TIME, ON APRIL 1, 2019, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

This Notice of Guaranteed Delivery must be used to accept the Offer (as defined below) if the certificates representing shares of common stock, par value $0.001 per share, of Immune Design Corp. or any other documents required by the Letter of Transmittal cannot be delivered to ComputerShare Trust Company, N.A., the depositary for the Offer (the “Depositary & Paying Agent”), or if you cannot comply with the procedures for book-entry transfer, prior to the Expiration Date (as defined in the Offer to Purchase). This Notice of Guaranteed Delivery, properly completed and duly executed, must be delivered to the Depositary & Paying Agent by facsimile transmission or mail prior to the Expiration Date. See Section 3 of the Offer to Purchase.

The Depositary & Paying Agent for the Offer is:

ComputerShare Trust Company, N.A.

 

If delivering by mail:    If delivering by express mail, courier or
other expedited service:

ComputerShare Trust Company, N.A.

c/o Voluntary Corporate Actions

P.O. Box 43011

Providence, RI 02940-3011

  

ComputerShare Trust Company, N.A.

c/o Voluntary Corporate Actions

250 Royall Street, Suite V

Canton, MA 02021

 

By Facsimile

(For Eligible Institutions Only)

(617) 360-6810

 

For Confirmation Only Telephone

(781) 575-2332

For this notice to be validly delivered, it must be received by the Depositary & Paying Agent at the address listed above prior to the Expiration Date. Delivery of this instrument to an address other than as set forth above will not constitute a valid delivery. Deliveries to Cascade Merger Sub Inc., Merck Sharp & Dohme Corp. or Broadridge Financial Services, the Information Agent, will not be forwarded to the Depositary & Paying Agent and therefore will not constitute valid delivery. Deliveries to The Depository Trust Company will not constitute valid delivery to the Depositary & Paying Agent.

This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Institution (as defined below) under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Do not send certificates representing Shares (as defined below) with this notice. Certificates representing Shares should be sent with your Letter of Transmittal.


To ComputerShare Trust Company, N.A.:

The undersigned hereby tenders to Cascade Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Merck Sharp & Dohme Corp., a New Jersey corporation, and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated March 5, 2019 (together with any amendments or supplements thereto, the “Offer to Purchase”), receipt of which is hereby acknowledged, and the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and together with the Offer to Purchase, the Offer), shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the Shares), of Immune Design Corp., a Delaware corporation, pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.

 

Name of record holder (please print):  

 

Signature:  

 

Address:  

 

 
 
Zip code:  

 

Telephone number:  

(             )

Certificate numbers, if available:  

 

If delivery will be by book-entry transfer, check this box:  ☐  
Name of tendering institution:  

 

Account number:  

 

 

2


GUARANTEE

(Not to be used for signature guarantee)

The undersigned, a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by The Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program and the New York Stock Exchange Inc. Medallion Signature Program or any other “eligible guarantor institution” (as such term is defined in Rule17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (each, an “Eligible Institution”), guarantees (i) that the above named person(s) “own(s)” the Shares tendered hereby within the meaning of Rule14e-4 under the Exchange Act (“Rule 14e-4”), (ii) that such tender of Shares complies with Rule14e-4 and (iii) to deliver to the Depositary & Paying Agent the certificates representing the Shares to be tendered hereby (or a confirmation of a book-entry transfer of such Shares into the Depositary & Paying Agent’s account at The Depository Trust Company in the case of a book-entry delivery), together with a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), together with any required signature guarantees (or an Agent’s Message, as defined in the Offer to Purchase, in the case of a book-entry delivery), and any other required documents, all within three NASDAQ trading days of the date hereof.

 

 

(Name of Firm)
(Address)
(Zip Code)
(Authorized Signature)
(Name and Title)
(Area Code and Telephone Number)

Dated:                    , 2019

DO NOT SEND CERTIFICATES REPRESENTING SHARES WITH THIS NOTICE.

CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL

 

3

EX-99.(a)(1)(D)

Exhibit (a)(1)(D)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

Immune Design Corp.

at

$5.85 Net Per Share

Pursuant to the Offer to Purchase dated March 5, 2019

by

Cascade Merger Sub Inc.

a wholly owned subsidiary of

Merck Sharp & Dohme Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT ONE MINUTE FOLLOWING 11:59 PM, EASTERN TIME, ON APRIL 1, 2019, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

March 5, 2019

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of Merck Sharp & Dohme Corp. (“Parent”), a New Jersey corporation, and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation, is offering to purchase all outstanding shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), a Delaware corporation, for $5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 5, 2019 (together with any amendments or supplements thereto, the “Offer to Purchase”), and the related letter of transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”) enclosed herewith.

Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee.

Enclosed herewith for your information and forwarding to your clients are copies of the following documents:

1.    The Offer to Purchase dated March 5, 2019.

2.    The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to tender Shares.

3.    The Notice of Guaranteed Delivery to be used to accept the Offer if certificates representing Shares and all other required documents cannot be delivered to Computershare Trust Company, N.A. (the Depositary & Paying Agent”), or if the procedures for book-entry transfer cannot be completed, prior to the expiration of the Offer.


4.    A letter that may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer.

5.    IMDZ’s Solicitation/Recommendation Statement on Schedule 14D-9.

6.    Internal Revenue Service Form W-9.

7.    A return envelope addressed to the Depositary & Paying Agent.

YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT ONE MINUTE FOLLOWING 11:59 PM, EASTERN TIME, ON APRIL 1, 2019, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

The Offer is being made pursuant to an Agreement and Plan of Merger dated as of February 20, 2019 (the Merger Agreement”), by and among Parent, Purchaser and IMDZ. The Merger Agreement provides, among other things, that after consummation of the Offer, Purchaser will merge with and into IMDZ (the “Merger”) in accordance with Section 251(h) of the General Corporation Law of the State of Delaware, as amended (the “DGCL”), with IMDZ continuing as the surviving corporation and a wholly owned subsidiary of Parent. At the effective time of the Merger, each outstanding Share (other than any Shares held by Parent, Purchaser, IMDZ or any of Parent’s wholly owned subsidiaries and any Shares held by stockholders who validly exercise their appraisal rights in connection with the Merger) will be automatically converted into the right to receive the price per Share paid in the Offer, payable net to the holder in cash, without interest and less any applicable withholding taxes. The Merger Agreement is more fully described in Section 13 of the Offer to Purchase.

The board of directors of IMDZ has unanimously: (i) determined that the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, are advisable and fair to, and in the best interest of IMDZ and the IMDZ stockholders; (ii) agreed that the Merger shall be effected under Section 251(h) of the DGCL; (iii) approved the execution, delivery and performance by IMDZ of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

The Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn prior to the expiration of the Offer, a number of Shares that, together with the Shares then owned by Parent or any of its wholly owned subsidiaries (including Purchaser) (but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been received, as defined by Section 251(h)(6) of the DGCL), would represent one more than 50% of the total number of Shares that are then outstanding; and (ii) any consent, approval or clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended has been obtained, has been received or has terminated or expired, as the case may be. The Offer is also subject to the other conditions described in the Offer to Purchase.

In all cases, Purchaser will pay for Shares accepted for payment pursuant to the Offer only after timely receipt by the Depositary & Paying Agent of (i) certificates representing such Shares (except in the case of Shares held in a book-entry/direct registration account maintained by IMDZ’s transfer agent) or confirmation of book-entry transfer of such Shares into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility (as defined in Section 3 of the Offer to Purchase) (a “Book-Entry Confirmation”), (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with all required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in lieu of the Letter of Transmittal and (iii) any other documents required by the Letter of

 

2


Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary & Paying Agent. Under no circumstances will interest be paid on the consideration paid for Shares accepted for purchase in the Offer, regardless of any extension of the Offer or any delay in making payment for such Shares.

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction or any administrative or judicial action pursuant thereto. Purchaser may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser or by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

Neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or any other person (other than Broadridge Financial Services (the “Information Agent”) and the Depositary & Paying Agent as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks, trust companies and other nominees for reasonable and necessary costs and expenses incurred by them in forwarding the enclosed materials to their customers.

Any stock transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise set forth in Instruction 6 of the Letter of Transmittal.

If a stockholder wishes to tender Shares in the Offer, but: (a) the certificates representing such Shares are not immediately available or cannot be delivered to the Depositary & Paying Agent prior to the expiration of the Offer; (b) such stockholder cannot comply with the procedures for book-entry transfer prior to the expiration of the Offer; or (c) such stockholder cannot deliver all required documents to the Depositary & Paying Agent prior to the expiration of the Offer, such stockholder may tender Shares by complying with the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.

Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent at its address and telephone numbers set forth on the back cover of the Offer to Purchase.

Very truly yours,

Merck Sharp & Dohme Corp.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU THE AGENT OF PARENT, PURCHASER, IMDZ, THE INFORMATION AGENT OR THE DEPOSITARY & PAYING AGENT, OR ANY AFFILIATE OF ANY OF THEM OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.

 

3

EX-99.(a)(1)(E)

Exhibit (a)(1)(E)

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

Immune Design Corp.

at

$5.85 Net Per Share

Pursuant to the Offer to Purchase dated March 5, 2019

by

Cascade Merger Sub Inc.

a wholly owned subsidiary of

Merck Sharp & Dohme Corp.

 

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT ONE MINUTE FOLLOWING 11:59 PM, EASTERN TIME, ON APRIL 1, 2019, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

March 5, 2019

To Our Clients:

Enclosed for your consideration are the Offer to Purchase dated March 5, 2019 (together with any amendments or supplements thereto, the “Offer to Purchase”) and the related letter of transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”) in connection with the offer by Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of Merck Sharp & Dohme Corp. (“Parent”), a New Jersey corporation, and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation, to purchase all outstanding shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), a Delaware corporation, for $5.85 per Share, net to you in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase and Letter of Transmittal. Also enclosed is the Solicitation/Recommendation Statement on Schedule 14D-9 filed by IMDZ with the Securities and Exchange Commission in connection with the Offer (together with any amendments or supplements thereto, the “Schedule 14D-9”).

We are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The enclosed Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal.

Your attention is directed to the following:

1. The price to be paid in the Offer is $5.85 per Share, net to you in cash, without interest and less any applicable withholding taxes.

2. The Offer is being made for all outstanding Shares.


3. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of February 20, 2019 (the Merger Agreement”), by and among Parent, Purchaser and IMDZ. The Merger Agreement provides, among other things, that after consummation of the Offer, Purchaser will merge with and into IMDZ (the “Merger”) in accordance with Section 251(h) of the General Corporation Law of the State of Delaware, as amended (the “DGCL”), with IMDZ continuing as the surviving corporation and a wholly owned subsidiary of Parent. At the effective time of the Merger, each outstanding Share (other than any Shares held by Parent, Purchaser, IMDZ or any of Parent’s wholly owned subsidiaries and any Shares held by stockholders who validly exercise their appraisal rights in connection with the Merger) will be automatically converted into the right to receive the price per Share paid in the Offer, net to the holder in cash, without interest and less any applicable withholding taxes. The Merger Agreement is more fully described in Section 13 of the Offer to Purchase.

4. The board of directors of IMDZ has unanimously: (i) determined that the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, are advisable and fair to, and in the best interest of IMDZ and the IMDZ stockholders; (ii) agreed that the Merger shall be effected under Section 251(h) of the DGCL; (iii) approved the execution, delivery and performance by IMDZ of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

5. The Offer and withdrawal rights expire at one minute following 11:59 PM Eastern Time, on April 1, 2019, unless the Offer is extended by Purchaser (as may be extended, the “Expiration Date”).

6. The Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn prior to the expiration of the Offer, a number of Shares that, together with the Shares then owned by Parent or any of its wholly owned subsidiaries (including Purchaser) (but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been received, as defined by Section 251(h)(6) of the DGCL), would represent one more than 50% of the total number of Shares that are then outstanding; and (ii) any consent, approval or clearance with respect to, or terminations or expiration of any applicable mandatory waiting period (and any extensions thereof) imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended has been obtained, has been received or has terminated or expired, as the case may be. The Offer is also subject to the other conditions described in the Offer to Purchase.

7. Any stock transfer taxes applicable to the sale of Shares to Purchaser pursuant to the Offer will be paid by Purchaser, except as otherwise set forth in Instruction 6 of the Letter of Transmittal. However, if you do not complete and sign the Internal Revenue Service Form W-9 that is included in the Letter of Transmittal (or other applicable form), you may be subject to backup withholding at the applicable statutory rate on the gross proceeds payable to you. See Instruction 8 of the Letter of Transmittal.

If you wish to have us tender any or all Shares held for your account, please complete, sign, detach and return to us the instruction form below. An envelope in which you can return your instructions to us is enclosed. If you authorize tender of any or all Shares held for your account, all such Shares will be tendered unless otherwise specified on the instruction form. Your instructions should be forwarded to us in sufficient time to permit us to submit a tender on your behalf prior to the Expiration Date.

In all cases, Purchaser will pay for Shares accepted for payment pursuant to the Offer only after timely receipt by Computershare Trust Company, N.A. (the “Depositary & Paying Agent”) of (i) certificates representing such Shares (except in the case of Shares held in a book-entry/direct registration account maintained by IMDZ’s transfer agent) or confirmation of book-entry transfer of such Shares into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility (as defined in Section 3 of the Offer to Purchase) (a “Book-Entry Confirmation”), (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with all required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in lieu of the Letter of Transmittal and (iii) any other

 

2


documents required by the Letter of Transmittal. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary & Paying Agent. Under no circumstances will interest be paid on the consideration paid for Shares accepted for purchase in the Offer, regardless of any extension of the Offer or any delay in making payment for such Shares.

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction or any administrative or judicial action pursuant thereto. Purchaser may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

 

3


Instruction Form with Respect to the

Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

Immune Design Corp.

at

$5.85 Net Per Share

Pursuant to the Offer to Purchase dated March 5, 2019

by

Cascade Merger Sub Inc.

a wholly owned subsidiary of

Merck Sharp & Dohme Corp.

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated March 5, 2019 (together with any amendments or supplements thereto, the “Offer to Purchase”) and the related letter of transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal”), in connection with the tender offer by Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of Merck Sharp & Dohme Corp., a New Jersey corporation, and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation, to purchase all outstanding shares of common stock, par value $0.001 per share, of Immune Design Corp., a Delaware corporation (individually, a “Share” and collectively, the “Shares”), for $5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase and Letter of Transmittal.

This form instructs you to tender the number of Shares indicated below (or if no number is indicated below, all Shares) held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and Letter of Transmittal furnished to the undersigned.

The undersigned understands and acknowledges that all questions as to validity, form, eligibility (including time of receipt) and acceptance of the surrender of any certificate representing Shares or any other document submitted on my behalf to Computershare Trust Company, N.A. (the “Depositary & Paying Agent”) will be determined by Purchaser in its sole and absolute discretion (provided that Purchaser may delegate such power in whole or in part to the Depositary & Paying Agent).

Number of Shares to be Tendered:

 

    

SIGN HERE

Shares*   

 

     

Dated                     , 2019

  

 

     

  

Signature(s)

 

  

 

Name(s)

 

  

 

Address(es)

 

  

 

(Zip Code)

 

  

 

Area Code and Telephone Number

 

  

 

Taxpayer Identification or Social Security No.

 

*

Unless otherwise indicated, it will be assumed that all Shares held for the undersigned’s account are to be tendered.

 

4

EX-99.(a)(1)(F)

Exhibit (a)(1)(F)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase dated March 5, 2019 and the related letter of transmittal and any amendments or supplements thereto. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction or any administrative or judicial action pursuant thereto. Purchaser (as defined below) may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser or by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

Notice of Offer to Purchase for Cash

All Outstanding Shares of Common Stock

of

Immune Design Corp.

at

$5.85 Net Per Share

Pursuant to the Offer to Purchase Dated March 5, 2019

by

Cascade Merger Sub Inc.

a wholly owned subsidiary of

Merck Sharp & Dohme Corp.

Cascade Merger Sub Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of Merck Sharp & Dohme Corp. (“Parent”), a New Jersey corporation, and an indirect subsidiary of Merck & Co., Inc., a New Jersey corporation, is offering to purchase all outstanding shares of common stock, par value $0.001 per share (individually, a “Share” and collectively, the “Shares”), of Immune Design Corp. (“IMDZ”), a Delaware corporation, for $5.85 per Share, net to the seller in cash, without interest and less any applicable withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 5, 2019 (together with any amendments or supplements thereto, the “Offer to Purchase”), and the related letter of transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). Tendering stockholders whose Shares are registered in their names and who tender directly to Computershare Trust Company, N.A. (the “Depositary & Paying Agent”) will not be charged brokerage fees, commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. Tendering stockholders whose Shares are registered in the name of their broker, dealer, bank, trust company or other nominee should consult such nominee to determine if any fees may apply. Following the consummation of the Offer, and subject to the conditions described in the Offer to Purchase, Purchaser intends to effect the Merger (as defined below).

 

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT ONE MINUTE FOLLOWING 11:59 PM, EASTERN TIME, ON APRIL 1, 2019, UNLESS THE OFFER IS EXTENDED OR TERMINATED.

The Offer is conditioned upon, among other things: (i) there being validly tendered and not withdrawn prior to the expiration of the Offer, a number of Shares that, together with the Shares then owned by Parent or any of its wholly owned subsidiaries (including Purchaser) (but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been received, as defined by Section 251(h)(6) of the General Corporation Law of the State of Delaware, as amended (the “DGCL”)), would represent one more than 50% of the total number of Shares that are then outstanding (the “Minimum Condition”); and (ii) any consent, approval or clearance with respect to, or terminations or expiration of any


applicable mandatory waiting period (and any extensions thereof) imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended has been obtained, has been received or has terminated or expired, as the case may be (the “HSR Condition”). The Offer is also subject to the other conditions described in the Offer to Purchase.

The Offer is being made pursuant to an Agreement and Plan of Merger dated as of February 20, 2019 (the Merger Agreement”), by and among Parent, Purchaser and IMDZ. The Merger Agreement provides, among other things, that after consummation of the Offer, Purchaser will merge with and into IMDZ (the “Merger”) in accordance with Section 251(h) of the DGCL, with IMDZ continuing as the surviving corporation and a wholly owned subsidiary of Parent. At the effective time of the Merger, each outstanding Share (other than any Shares held by Parent, Purchaser, IMDZ or any of Parent’s wholly owned subsidiaries and any Shares held by stockholders who validly exercise their appraisal rights in connection with the Merger) will be automatically converted into the right to receive the price per Share paid in the Offer, payable net to the holder in cash, without interest and less any applicable withholding taxes. The Merger Agreement is more fully described in Section 13 of the Offer to Purchase.

The board of directors of IMDZ has unanimously: (i) determined that the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, are advisable and fair to, and in the best interest of IMDZ and the IMDZ stockholders; (ii) agreed that the Merger shall be effected under Section 251(h) of the DGCL; (iii) approved the execution, delivery and performance by IMDZ of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; and (iv) resolved to recommend that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), Purchaser will purchase, as promptly as practicable after the expiration of the Offer, all Shares validly tendered and not properly withdrawn prior to one minute following 11:59 PM, Eastern Time, on April 1, 2019 (or any later time to which Purchaser, subject to the terms of the Merger Agreement, extends the period of time during which the Offer is open (the “Expiration Date”)). If, on any scheduled Expiration Date, any condition to the Offer has not been satisfied or waived by Parent or Purchaser, and if the Merger Agreement has not been terminated pursuant to its terms, Purchaser may extend the Offer for successive periods of up to 10 business days per extension. Purchaser is obligated to extend the Offer (i) for successive periods of up to 10 business days per extension if the HSR Condition has not been satisfied, (ii) upon the request of IMDZ, if any condition to the Offer (other than the Minimum Condition) has not been satisfied or waived by Parent or Purchaser for an additional period specified by IMDZ of up to 10 business days per extension, and (iii) upon the request of IMDZ, if the Minimum Condition has not been satisfied, but all other conditions to the Offer have been satisfied or waived, on up to three occasions for an additional period specified by IMDZ of up to 10 business days per extension. In addition, if the Merger Agreement has not been terminated pursuant to its terms, we will extend the Offer for any period or periods of time required by any applicable law or any applicable rules, regulations, interpretations or positions of the Securities and Exchange Commission (“SEC”), its staff or Nasdaq Global Market (“Nasdaq”). Purchaser will not be obligated to extend the Offer beyond the earliest to occur of (a) the valid termination of the Merger Agreement pursuant to its terms or (b) the first business day immediately following June 20, 2019.

Any extension, termination or amendment of the Offer will be followed as promptly as practicable by a public announcement thereof consistent with the requirements of the SEC. In the case of an extension of the Offer, Purchaser will inform the Depositary & Paying Agent of that fact and will make a public announcement of such extension, no later than the earlier of (i) 9:00 AM, Eastern Time, or (ii) the first opening of Nasdaq, on the next business day after the previously scheduled Expiration Date. During any extension of the Offer, all Shares previously validly tendered and not properly withdrawn will remain subject to the Offer and subject to the right of a tendering stockholder to withdraw such stockholder’s Shares.

Purchaser reserves the right to waive, in whole or in part, any of the conditions to the Offer and to change the Offer Price; provided, however, that unless otherwise contemplated by the Merger Agreement or Purchaser receives IMDZ’s written consent, Purchaser cannot (i) decrease the Offer Price, (ii) change the form of

 

2


consideration payable in the Offer (other than by adding consideration), (iii) decrease the maximum number of Shares sought to be purchased in the Offer, (iv) impose conditions to the Offer in addition to any of the other conditions to the Offer, (v) amend or modify any of the other conditions to the Offer in a manner that adversely affects, or would reasonably be expected to adversely affect, any holder of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or delay the consummation of the Offer or prevent, delay or impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other transactions contemplated by the Merger Agreement, (vi) waive or change the Minimum Condition, (vii) extend or otherwise change the expiration date of the Offer other than in accordance with the Merger Agreement or (viii) provide any “subsequent offering period” within the meaning of Rule 14d-11 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In order to tender Shares in the Offer, a stockholder must (i) complete and sign the Letter of Transmittal according to its instructions and deliver the Letter of Transmittal (or a manually signed facsimile thereof), together with any required signature guarantees, the certificates representing the tendered Shares (except in the case of Shares held in a book-entry/direct registration account (“DRS Account”) maintained by IMDZ’s transfer agent (such Shares, “DRS Shares”)) and any other documents required by the Letter of Transmittal to the Depositary & Paying Agent or (ii) follow the procedures for book-entry transfer set forth in Section 3 of the Offer to Purchase. If Shares are registered in the name of a broker, dealer, bank, trust company or other nominee, a tendering stockholder must contact such person and instruct such person to tender such Shares. If a stockholder wishes to tender Shares in the Offer but (a) the certificates representing such Shares are not immediately available or cannot be delivered to the Depositary & Paying Agent prior to the Expiration Date, (b) such stockholder cannot comply with the procedures for book-entry transfer described in the Offer to Purchase prior to the Expiration Date or (c) such stockholder cannot deliver all required documents to the Depositary & Paying Agent prior to the Expiration Date, such stockholder may tender Shares by complying with the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.

For purposes of the Offer, Purchaser will be deemed to have accepted for payment tendered Shares when, as and if Purchaser gives oral or written notice of Purchaser’s acceptance to the Depositary & Paying Agent. Purchaser will pay for Shares accepted for payment pursuant to the Offer by depositing the purchase price with the Depositary & Paying Agent, which will act as agent for tendering stockholders for the purpose of receiving payments from Purchaser and transmitting such payments to tendering stockholders. Under no circumstances will Purchaser pay interest on the consideration paid for Shares accepted for purchase in the Offer, regardless of any extension of the Offer or any delay in making payment for such Shares.

In all cases, Purchaser will pay for Shares accepted for payment pursuant to the Offer only after timely receipt by the Depositary & Paying Agent of (i) certificates representing such Shares (except in the case of DRS Shares) or confirmation of book-entry transfer of such Shares into the Depositary & Paying Agent’s account at the Book-Entry Transfer Facility (as defined in Section 3 of the Offer to Purchase), (ii) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with all required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in lieu of the Letter of Transmittal and (iii) any other documents required by the Letter of Transmittal.

Except as otherwise provided in the Offer to Purchase, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn (i) at any time before the Expiration Date and (ii) if Purchaser has not accepted for payment Shares tendered pursuant to the Offer by May 4, 2019, which is the 60th day after the date of the commencement of the Offer, at any time after such date, in each case by complying with the procedures set forth below.

For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal with respect to the Shares must be timely received by the Depositary & Paying Agent at one of its addresses set forth on the back cover of the Offer to Purchase, and the notice of withdrawal must specify the name of the person who tendered

 

3


the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares, if different from that of the person who tendered such Shares. If the Shares to be withdrawn have been delivered to the Depositary & Paying Agent, a signed notice of withdrawal with (except in the case of Shares tendered by an Eligible Institution (as defined in Section 3 of the Offer to Purchase)) signatures guaranteed by an Eligible Institution must be submitted before the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the serial numbers shown on the specific certificates evidencing the Shares to be withdrawn or, in the case of DRS Shares or Shares tendered by book-entry transfer, the name and number of the DRS Account or the account maintained at the Book-Entry Transfer Facility, respectively, to be credited with the withdrawn Shares. Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not validly tendered. However, withdrawn Shares may be retendered at any time before the Expiration Date by following the procedures described in Section 3 of the Offer to Purchase.

The tender of Shares in exchange for cash pursuant to the Offer or pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local, foreign and other tax laws. All stockholders should consult their own tax advisors about the tax consequences to such stockholders of tendering Shares pursuant to the Offer, or receiving payment for Shares pursuant to the Merger, including the effects of applicable state, local, foreign and other tax laws.

The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.

IMDZ has provided to Purchaser its stockholder list and security position listing for the purpose of disseminating the Offer to holders of Shares. In accordance with the Merger Agreement and applicable law, Purchaser will mail the Offer to Purchase, the related Letter of Transmittal and other related documents to record holders of Shares and to brokers, dealers, banks, trust companies and other nominees whose names appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

The Offer to Purchase and the related Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer.

Questions and requests for assistance and copies of the Offer to Purchase, the Letter of Transmittal and all other Offer materials may be directed to Broadridge Financial Services, the information agent for the Offer (the “Information Agent”), at its telephone number set forth below and will be furnished promptly at Purchaser’s expense. Neither Parent nor Purchaser will pay any fees or commissions to any broker or dealer or any other person (other than to the Information Agent and the Depositary & Paying Agent) for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

Broadridge Financial Services

(855) 793-5068 (toll free)

www.shareholder.broadridge.com

March 5, 2019

 

4

EX-99.(a)(5)(B)

Exhibit (a)(5)(B)

 

 

LOGO

   News Release

FOR IMMEDIATE RELEASE

 

Media Contacts:

  

Pamela Eisele

  

Investor Contacts:

  

Peter Dannenbaum

   (267) 305-3558       (908) 740-1037
        

Courtney Ronaldo

(908) 740-6132

Merck Begins Tender Offer to Acquire Immune Design

KENILWORTH, N.J., March 5, 2019 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, is commencing today, through a subsidiary, a cash tender offer to purchase all outstanding shares of common stock of Immune Design (NASDAQ: IMDZ). On Feb. 21, 2019, Merck announced its intent to acquire Immune Design.

Upon the successful closing of the tender offer, stockholders of Immune Design will receive $5.85 in cash for each share of Immune Design common stock validly tendered and not validly withdrawn in the offer, without interest and less any required withholding taxes. Following the purchase of shares in the tender offer, Immune Design will become a wholly-owned subsidiary of Merck.

Merck will file today with the U.S. Securities and Exchange Commission (SEC) a tender offer statement on Schedule TO, which provides the terms of the tender offer. Additionally, Immune Design will file with the SEC a solicitation/recommendation statement on Schedule 14D-9 that includes the recommendation of the Immune Design board of directors that their stockholders accept the tender offer and tender their shares.

The tender offer will expire at 12:00 am EDT on April 2, 2019, unless extended in accordance with the merger agreement and the applicable rules and regulations of the SEC. The closing of the tender offer is subject to customary terms and conditions, including the tender of a number of shares which, together with shares then owned by Merck (if any), represents a majority of the outstanding shares, and the expiration or the termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is expected to close early in the second quarter of 2019.


 

- 2 -

Additional Information about the Tender Offer

This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any shares of the common stock of Immune Design (“IMDZ”) or any other securities. A tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related documents, will be filed by Merck Sharp & Dohme Corp. (“Merck”) and Cascade Merger Sub Inc., a wholly-owned subsidiary of Merck (“Buyer”), with the Securities and Exchange Commission (the “SEC”), and a solicitation/recommendation statement on Schedule 14D-9 will be filed by Immune Design with the SEC. The offer to purchase shares of Immune Design common stock will only be made pursuant to the offer to purchase, the letter of transmittal and related documents filed as a part of the Schedule TO.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER STATEMENT AND THE SOLICITATION/RECOMMENDATION STATEMENT REGARDING THE OFFER, AS THEY MAY BE AMENDED FROM TIME TO TIME, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

Investors and security holders may obtain a free copy of these statements (when available) and other documents filed with the SEC at the website maintained by the SEC at www.sec.gov or by directing such requests to the Information Agent for the Offer, which will be named in the tender offer statement. Additional copies of the tender offer materials may be obtained at no charge by contacting Merck at 2000 Galloping Hill Road, Kenilworth, N.J., 07033 or by phoning (908) 423-1000. In addition, Merck and Immune Design file annual, quarterly and current reports and other information with the SEC. You may read and copy any reports or other information filed by Merck or Immune Design at the SEC public reference room at 100 F Street, N.E., Washington, D.C., 20549. For further information on the SEC public reference room, please call 1-800-SEC-0330. Merck’s and Immune Design’s filings with the SEC are also available to the public from commercial document-retrieval services and at the SEC’s website at www.sec.gov.


 

- 3 -

About Merck

For more than a century, Merck, a leading global biopharmaceutical company known as MSD outside of the United States and Canada, has been inventing for life, bringing forward medicines and vaccines for many of the world’s most challenging diseases. Through our prescription medicines, vaccines, biologic therapies and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to health care through far-reaching policies, programs and partnerships. Today, Merck continues to be at the forefront of research to advance the prevention and treatment of diseases that threaten people and communities around the world—including cancer, cardio-metabolic diseases, emerging animal diseases, Alzheimer’s disease and infectious diseases including HIV and Ebola. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

Forward-Looking Statement of Merck & Co., Inc., Kenilworth, N.J., USA

This news release of Merck & Co., Inc., Kenilworth, N.J., USA (the “company”) includes “forward-looking statements” that are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, risks associated with the ability to consummate the proposed transaction described herein; general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s 2018 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

EX-99.(d)(1)

Exhibit (d)(1)

 

 

AGREEMENT AND PLAN OF MERGER

among:

IMMUNE DESIGN CORP.,

a Delaware corporation;

MERCK SHARP & DOHME CORP.,

a New Jersey corporation; and

CASCADE MERGER SUB INC.,

a Delaware corporation

 

 

Dated as of February 20, 2019

 

 

 

 

 

 

 


TABLE OF CONTENTS

 

         Page  

SECTION 1.

 

THE OFFER

     2  

1.1

  The Offer.      2  

1.2

  Company Actions.      4  

SECTION 2.

 

MERGER TRANSACTION

     5  

2.1

  Merger of Purchaser into the Company      5  

2.2

  Effect of the Merger      5  

2.3

  Closing; Effective Time.      6  

2.4

  Certificate of Incorporation and Bylaws; Directors and Officers      6  

2.5

  Conversion of Shares.      6  

2.6

  Surrender of Certificates; Stock Transfer Books.      7  

2.7

  Dissenters’ Rights      9  

2.8

  Company Equity Awards      10  

2.9

  Further Action      10  

SECTION 3.

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     11  

3.1

  Due Organization; Subsidiaries, Etc.      11  

3.2

  Certificate of Incorporation and Bylaws      11  

3.3

  Capitalization, Etc.      12  

3.4

  SEC Filings; Financial Statements.      13  

3.5

  Absence of Changes      15  

3.6

  Title to Assets      16  

3.7

  Real Property      16  

3.8

  Intellectual Property.      16  

3.9

  Contracts.      19  

3.10

  Liabilities      21  

3.11

  Compliance with Legal Requirements      22  

3.12

  Regulatory Matters      22  

3.13

  Certain Business Practices      23  

3.14

  Governmental Authorizations      24  

3.15

  Tax Matters      24  

3.16

  Employee Matters; Benefit Plans      25  

3.17

  Environmental Matters      27  

3.18

  Insurance      27  

3.19

  Legal Proceedings; Orders      28  

3.20

  Authority; Binding Nature of Agreement      28  

3.21

  Section 203 of the DGCL      28  

3.22

  Merger Approval      28  

3.23

  Non-Contravention; Consents      28  

3.24

  Opinion of Financial Advisor      29  

3.25

  Financial Advisors      29  

3.26

  Affiliate Transactions      29  

SECTION 4.

 

REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER

     29  

4.1

  Due Organization      29  

4.2

  Purchaser      30  

4.3

  Authority; Binding Nature of Agreement      30  

4.4

  Non-Contravention; Consents      30  

4.5

  Disclosure      30  

4.6

  Absence of Litigation      31  

4.7

  Funds      31  

4.8

  Ownership of Company Common Stock      31  

 

i.


TABLE OF CONTENTS

(continued)

 

         Page  

4.9

  Acknowledgement by Parent and Purchaser      31  

4.10

  Brokers and Other Advisors      32  

SECTION 5.

 

CERTAIN COVENANTS OF THE COMPANY

     32  

5.1

  Access and Investigation      32  

5.2

  Operation of the Acquired Corporations’ Business.      33  

5.3

  No Solicitation.      36  

SECTION 6.

 

ADDITIONAL COVENANTS OF THE PARTIES

     38  

6.1

  Company Board Recommendation.      38  

6.2

  Filings, Consents and Approvals.      39  

6.3

  Company Equity Awards and ESPP.      41  

6.4

  Employee Benefits      42  

6.5

  Indemnification of Officers and Directors.      43  

6.6

  Securityholder Litigation      45  

6.7

  Additional Agreements      45  

6.8

  Disclosure      45  

6.9

  Takeover Laws; Advice of Changes.      46  

6.10

  Section 16b-3 Matters      46  

6.11

  Rule 14d-10 Matters      46  

6.12

  Purchaser Stockholder Consent      46  

6.13

  Stock Exchange Delisting; Deregistration      47  

6.14

  401(k) Plan      47  

6.15

  FIRPTA Certificate      47  

SECTION 7.

 

CONDITIONS PRECEDENT TO THE MERGER

     47  

7.1

  No Restraints      47  

7.2

  Consummation of Offer      47  

SECTION 8.

 

TERMINATION

     47  

8.1

  Termination      47  

8.2

  Effect of Termination      49  

8.3

  Expenses; Termination Fee.      49  

SECTION 9.

 

MISCELLANEOUS PROVISIONS

     51  

9.1

  Amendment      51  

9.2

  Waiver      51  

9.3

  No Survival of Representations and Warranties      51  

9.4

  Entire Agreement; Counterparts      51  

9.5

  Applicable Legal Requirements; Jurisdiction; Specific Performance; Remedies.      51  

9.6

  Assignability      52  

9.7

  No Third Party Beneficiaries      53  

9.8

  Notices      53  

9.9

  Severability      54  

9.10

  Obligation of Parent      54  

9.11

  Transfer Taxes      54  

9.12

  Construction.      54  

 

ii.


AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (“Agreement”) is made and entered into as of February 20, 2019, by and among: Merck Sharp & Dohme Corp., a New Jersey corporation (“Parent”); Cascade Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Purchaser”); and Immune Design Corp., a Delaware corporation (the “Company”). Certain capitalized terms used in this Agreement are defined in Exhibit A.

RECITALS

A. Parent has agreed to cause Purchaser to commence a cash tender offer (as it may be amended from time to time as permitted under this Agreement, the “Offer”) to acquire all of the outstanding shares of Company Common Stock (the “Shares”) for $5.85 per share (such amount, or any higher amount per share paid pursuant to the Offer, being the “Offer Price”), to the seller in cash, without interest, upon the terms and subject to the conditions of this Agreement.

B. Following the consummation of the Offer, Purchaser will be merged with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the merger and as a wholly owned Subsidiary of Parent (the “Surviving Corporation”), on the terms and subject to the conditions set forth in this Agreement, whereby, except as expressly provided in Section 2.5, (i) each issued and outstanding Share not owned by Parent, Purchaser or the Company as of the Effective Time shall be converted into the right to receive the Offer Price, in cash, without interest and (ii) the Company shall become a wholly owned Subsidiary of Parent as a result of the Merger.

C. The board of directors of the Company (the “Company Board”) has unanimously (i) determined that this Agreement and the Transactions, including the Offer and the Merger, are advisable and fair to, and in the best interest of, the Company and its stockholders, (ii) agreed that the Merger shall be effected under Section 251(h) and other relevant provisions of the DGCL, (iii) approved the execution, delivery and performance by the Company of this Agreement and the consummation of the Transactions, including the Offer and the Merger and (iv) resolved to recommend that the stockholders of the Company tender their Shares to Purchaser pursuant to the Offer (the “Company Board Recommendation”).

D. The board of directors of Purchaser has approved this Agreement and declared it advisable for Purchaser to enter into this Agreement.

E. Each of Parent, Purchaser and the Company hereby acknowledges and agrees that the Merger shall be effected under Section 251(h) of the DGCL and shall, subject to satisfaction of the conditions set forth in this Agreement, be consummated immediately following the Offer Acceptance Time.

 

1.


AGREEMENT

The Parties to this Agreement, intending to be legally bound, agree as follows:

SECTION 1. THE OFFER

1.1 The Offer.

(a) Commencement of the Offer. Provided that this Agreement shall not have been terminated in accordance with Section 8, as promptly as practicable after the date of this Agreement but in no event more than ten (10) Business Days after the date of this Agreement, Purchaser shall (and Parent shall cause Purchaser to) commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer.

(b) Terms and Conditions of the Offer. The obligations of Purchaser to, and of Parent to cause Purchaser to, accept for payment, and pay for, any Shares validly tendered (and not validly withdrawn) pursuant to the Offer are subject to the terms and conditions of this Agreement, including the prior satisfaction of the Minimum Condition and the satisfaction or waiver of the other conditions set forth in Annex I (collectively, as they may be amended in accordance with the terms of this Agreement, the “Offer Conditions”). The Offer shall be made by means of an offer to purchase (the “Offer to Purchase”) that contains the terms set forth in this Agreement, the Minimum Condition and the other Offer Conditions. Purchaser expressly reserves the right, in its sole discretion, to (i) increase the Offer Price, (ii) waive any Offer Condition and (iii) make any other changes in the terms and conditions of the Offer not inconsistent with the terms of this Agreement; provided, however, that unless otherwise provided by this Agreement, without the prior written consent of the Company, Purchaser shall not (A) decrease the Offer Price, (B) change the form of consideration payable in the Offer (other than by adding additional consideration (and solely with respect to any such additional consideration)), (C) decrease the maximum number of Shares sought to be purchased in the Offer, (D) impose conditions to the Offer in addition to the Offer Conditions, (E) amend or modify any of the Offer Conditions in a manner that adversely affects, or would reasonably be expected to adversely affect, any holder of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or delay the consummation of the Offer or prevent, delay or impair the ability of Parent or Purchaser to consummate the Offer, the Merger or the other Transactions, (F) change or waive the Minimum Condition, (G) extend or otherwise change the Expiration Date in a manner other than as required or permitted by this Agreement or (H) provide any “subsequent offering period” within the meaning of Rule 14d-11 promulgated under the Exchange Act. The Offer may not be withdrawn prior to the Expiration Date (or any rescheduled Expiration Date) of the Offer, unless this Agreement is terminated in accordance with Section 8.

(c) Expiration and Extension of the Offer. The Offer shall initially be scheduled to expire at one (1) minute following 11:59 p.m., Eastern Time, on the 20th Business Day following the Offer Commencement Date, determined as set forth in Rule 14d-1(g)(3) and Rule 14e-1(a) under the Exchange Act (unless otherwise agreed to in writing by Parent and the Company) (the “Initial Expiration Date,” such date or such subsequent date to which the expiration of the Offer is extended in accordance with the terms of this Agreement, the “Expiration Date”). Subject to the Parties’ respective termination rights under Section 8: (i) if, as of the

 

2.


scheduled Expiration Date, any Offer Condition is not satisfied and has not been waived, Purchaser may, in its discretion (and without the consent of the Company or any other Person), extend the Offer on one or more occasions, for an additional period of up to ten (10) Business Days per extension, to permit such Offer Condition to be satisfied; (ii) Purchaser shall extend the Offer from time to time for: (A) any period required by any Legal Requirement, any interpretation or position of the SEC, the staff thereof or Nasdaq applicable to the Offer; and (B) periods of up to ten (10) Business Days per extension, until any waiting period (and any extension thereof) applicable to the consummation of the Offer under the HSR Act shall have expired or been terminated; (iii) if, as of the then-scheduled Expiration Date, any Offer Condition (other than the Minimum Condition) is not satisfied and has not been waived, at the request of the Company, Purchaser shall extend the Offer on one or more occasions for an additional period specified by the Company of up to ten (10) Business Days per extension, to permit such Offer Condition to be satisfied; and (iv) if, as of the scheduled Expiration Date, the Minimum Condition is not satisfied but all other Offer Conditions (other than the Offer Condition set forth in clause (e) of Annex I) have been satisfied or waived, at the written request of the Company, Purchaser shall extend the Offer on up to three occasions for an additional period specified by the Company of up to ten (10) Business Days per such extension to permit the Minimum Condition to be satisfied; provided, however, that in no event shall Purchaser: (1) be required to extend the Offer beyond the earliest to occur of (the “Extension Deadline”) (x) the valid termination of this Agreement in compliance with Section 8 and (y) the first Business Day immediately following the End Date; or (2) be permitted to extend the Offer beyond the Extension Deadline without the prior written consent of the Company. Purchaser shall not terminate the Offer, or permit the Offer to expire, prior to the Extension Deadline without the prior written consent of the Company.

(d) Termination of Offer. In the event that this Agreement is terminated pursuant to Section 8.1, Purchaser shall (and Parent shall cause Purchaser to) promptly (and, in any event, within 24 hours of such termination), irrevocably and unconditionally terminate the Offer and shall not acquire any Shares pursuant to the Offer. If the Offer is terminated or withdrawn by Purchaser, Purchaser shall promptly return, and shall cause any depository acting on behalf of Purchaser to return, in accordance with applicable Legal Requirements, all tendered Shares to the registered holders thereof.

(e) Offer Documents. As promptly as practicable on the Offer Commencement Date, Parent and Purchaser shall (i) file with the SEC a tender offer statement on Schedule TO with respect to the Offer (together with all amendments and supplements thereto and including exhibits thereto, the “Schedule TO”) that will contain as an exhibit the Offer to Purchase and forms of the letter of transmittal and summary advertisement and other customary ancillary documents in each case related to the Offer and (ii) cause the Offer to Purchase and related documents to be disseminated to holders of Shares together with all amendments or supplements thereto (collectively, the “Offer Documents”). The Offer Documents filed by either Parent or Purchaser with the SEC shall comply in all material respects with the Exchange Act and the rules and regulations thereunder and other applicable Legal Requirements, and shall not contain any untrue statement of a material fact or omission of a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading. Each of Parent, Purchaser and the Company agrees to promptly correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have

 

3.


become false or misleading in any material respect, and Parent further agrees to take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. The Company shall promptly furnish or otherwise make available to Parent and Purchaser or Parent’s legal counsel all information concerning the Company and the Company’s stockholders that may be required or reasonably requested in connection with any action contemplated by this Section 1.1(e). The Company and its counsel shall be given a reasonable opportunity to review and comment on the Offer Documents prior to the filing thereof with the SEC. Parent and Purchaser agree to provide the Company and its counsel with any comments Parent, Purchaser or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after receipt of such comments. Each of Parent, Purchaser and the Company shall respond promptly to any comments of the SEC or its staff with respect to the Offer Documents or the Offer. Parent and Purchaser shall provide the Company and its counsel a reasonable opportunity to participate in the formulation of any response to any such comments of the SEC or its staff and a reasonable opportunity to participate in any discussions with the SEC or its staff concerning such comments.

(f) Payment; Funds. On the terms specified herein and subject to the satisfaction or, to the extent waivable by Parent or Purchaser, waiver of the Offer Conditions, Purchaser shall, and Parent shall cause Purchaser to, irrevocably accept for payment at the Offer Acceptance Time and pay for, all of the Shares validly tendered (and not validly withdrawn) pursuant to the Offer as promptly as practicable after the Offer Acceptance Time. Without limiting the generality of Section 9.10, Parent shall cause to be provided to Purchaser all of the funds necessary to purchase any Shares that Purchaser becomes obligated to purchase pursuant to the Offer, and shall cause Purchaser to perform, on a timely basis, all of Purchaser’s obligations under this Agreement. Parent and Purchaser shall, and each of Parent and Purchaser shall ensure that all of their respective controlled Affiliates shall, tender any Shares held by them into the Offer.

(g) Adjustments. Without limiting the obligations of the Company pursuant to Section 5.2, if, between the date of this Agreement and the Offer Acceptance Time, the outstanding Shares are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Offer Price shall be appropriately adjusted; it being understood that, for the avoidance of doubt, nothing in this Section 1.1(g) shall be construed to permit the Company to take any action that is prohibited by the terms of this Agreement.

1.2 Company Actions.

(a) Schedule 14D-9. The Company shall file with the SEC, concurrently with the filing by Parent and Purchaser of the Schedule TO, and disseminate to holders of Shares, in each case as and to the extent required by applicable federal securities laws, a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with any exhibits, amendments or supplements thereto, the “Schedule 14D-9”) that, subject to Section 6.1(b), shall reflect the Company Board Recommendation and shall provide each of the holders of Shares with the notice contemplated by Section 262(d)(2) of the DGCL. Prior to such filing and dissemination, the Company shall set the Stockholder List Date as the record date for the purpose of receiving the notice required by

 

4.


Section 262(d)(2) of the DGCL. The Company agrees that it shall cause the Schedule 14D-9 to comply in all material respects with the Exchange Act and the rules and regulations promulgated thereunder and other applicable Legal Requirements, and shall not contain any untrue statement of a material fact or omission of a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading. Each of Parent, Purchaser and the Company agrees to respond promptly to any comments of the SEC or its staff and to promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Parent and Purchaser shall promptly furnish or otherwise make available to the Company or its legal counsel all information concerning Parent and Purchaser that may be required in connection with any action contemplated by this Section 1.2(a). Parent and its counsel shall be given reasonable opportunity to review and comment on the Schedule 14D-9 and any amendment thereto prior to the filing thereof with the SEC. The Company agrees to provide Parent and its counsel with any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of such comments. The obligations of the Company in this Section 1.2(a) shall not apply if the Company Board effects a Company Adverse Change Recommendation or has formally determined to do so. The Company shall respond promptly to any comments of the SEC or its staff with respect to the Schedule 14D-9.

(b) Stockholder Lists. The Company shall, or shall cause its transfer agent to, promptly furnish to Parent or its information agent a list of its stockholders, mailing labels and any available listing or computer file containing the names and addresses of all record holders of Shares and lists of securities positions of Shares held in stock depositories, in each case accurate and complete as of the most recent practicable date, and shall provide to Parent such additional information (including updated lists of stockholders, mailing labels and lists of securities positions) and such other assistance as Parent may reasonably request in connection with the Offer. The date of the list used to determine the Persons to whom the Offer Documents and Schedule 14D-9 are first disseminated, the “Stockholder List Date.” Parent and Purchaser and their agents shall hold in confidence in accordance with the Confidentiality Agreement the information contained in any such labels, listings and files, shall use such information only in connection with the Offer and the Merger and, if this Agreement shall be terminated, shall, upon request, deliver, and shall use their commercially reasonable efforts to cause their agents to deliver, to the Company (or, at Parent’s option, destroy) all copies and any extracts or summaries from such information then in their possession or control.

SECTION 2. MERGER TRANSACTION

2.1 Merger of Purchaser into the Company. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with Section 251(h) of the DGCL, at the Effective Time, the Company and Parent shall consummate the Merger, whereby Purchaser shall be merged with and into the Company, and the separate existence of Purchaser shall cease. The Company will continue as the Surviving Corporation.

2.2 Effect of the Merger. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the

 

5.


Effective Time, except as otherwise agreed pursuant to the terms of this Agreement, all of the property, rights, privileges, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Purchaser shall become the debts, liabilities and duties of the Surviving Corporation.

2.3 Closing; Effective Time.

(a) Unless this Agreement shall have been validly terminated pursuant to Section 8, and unless otherwise mutually agreed in writing between the Company, Parent and Purchaser, the consummation of the Merger (the “Closing”) shall take place at the offices of Cooley LLP, 101 California Street, 5th Floor, San Francisco, California 94111, at 8:00 a.m., Eastern Time, on the same date as the Offer Acceptance Time except if the condition set forth in Section 7.1 shall not be satisfied or waived by such date, in which case on no later than the first Business Day on which the condition set forth in Section 7.1 is satisfied or waived. The date on which the Closing occurs is referred to in this Agreement as the “Closing Date.

(b) Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the Company shall file or cause to be filed a certificate of merger with the Secretary of State of the State of Delaware with respect to the Merger, in such form as required by, and executed and acknowledged in accordance with, Section 251(h) of the DGCL. The Merger shall become effective upon the date and time of the filing of such certificate of merger with the Secretary of State of the State of Delaware or such later date and time as is agreed upon in writing by the Parties hereto and specified in the certificate of merger (such date and time, the “Effective Time”).

2.4 Certificate of Incorporation and Bylaws; Directors and Officers. At the Effective Time:

(a) the Certificate of Incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to Exhibit B;

(b) the bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to Exhibit C; and

(c) the directors and officers of the Surviving Corporation immediately after the Effective Time shall be the respective individuals who are designated as directors and officers on Part 2.4(c) of the Company Disclosure Schedule.

2.5 Conversion of Shares.

(a) At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Purchaser, the Company or any stockholder of the Company:

(i) any Shares then held by the Company (or held in the Company’s treasury) shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;

 

6.


(ii) any Shares then held by Parent, Purchaser or any other direct or indirect wholly owned Subsidiary of Parent shall automatically be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor;

(iii) except as provided in clauses “(i)” and “(ii)” above and subject to Section 2.5(b), each Share then outstanding (other than any Dissenting Shares, as defined below) shall be converted into the right to receive the Offer Price in cash, without interest (the “Merger Consideration”), subject to any withholding of Taxes required by applicable Legal Requirements in accordance with Section 2.6(e); and

(iv) each share of the common stock, $0.01 par value per share, of Purchaser then outstanding shall be converted into one (1) share of common stock of the Surviving Corporation.

(b) Without limiting the obligations of the Company pursuant to Section 5.2, if, between the date of this Agreement and the Effective Time, the outstanding Shares are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitalization or other similar transaction, then the Merger Consideration shall be appropriately adjusted; it being understood that, for the avoidance of doubt, nothing in this Section 2.5(b) shall be construed to permit the Company to take any action that is prohibited by the terms of this Agreement.

2.6 Surrender of Certificates; Stock Transfer Books.

(a) Prior to the Offer Acceptance Time, Parent shall designate a bank or trust company reasonably acceptable to the Company to act as agent (the “Depository Agent”) for the holders of Shares to receive the funds to which holders of such Shares shall become entitled pursuant to Section 1.1(b) and to act as agent (the “Paying Agent”) for the holders of Shares to receive the funds to which holders of such shares shall become entitled pursuant to Section 2.5. The Paying Agent agreement pursuant to which Parent shall appoint the Paying Agent shall be in form and substance reasonably acceptable to the Company. At or prior to the Offer Acceptance Time, Parent shall deposit, or shall cause to be deposited, with the Depository Agent cash sufficient to make payment of the cash consideration payable pursuant to Section 1.1(b) and with the Paying Agent cash sufficient to make payment of the cash consideration payable pursuant to Section 2.5 (together, the “Payment Fund”). The Payment Fund shall not be used for any other purpose. The Payment Fund shall be invested by the Paying Agent as directed by Parent; provided, that such investments shall be in obligations of or guaranteed by the United States of America in commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation, respectively, in certificates of deposit, bank repurchase agreements or banker’s acceptances of commercial banks with capital exceeding $1 billion, or in money market funds having a rating in the highest investment category granted by a recognized credit rating agency at the time of acquisition or a combination of the foregoing and, in any such case, no such instrument shall have a maturity exceeding three (3) months.

(b) Promptly after the Effective Time (but in no event later than three (3) Business Days thereafter), the Surviving Corporation shall cause to be mailed to each Person who was, at the Effective Time, a holder of record

 

7.


of Certificates entitled to receive the Merger Consideration pursuant to Section 2.5 a form of letter of transmittal (which shall be in reasonable and customary form and shall specify that delivery shall be effected, and risk of loss and title to the certificates evidencing such Shares (the “Certificates”) shall pass, only upon proper delivery of the Certificates (or effective affidavits of loss in lieu thereof in accordance with Section 2.6(f)) to the Paying Agent), instructions for use in effecting the surrender of the Certificates pursuant to such letter of transmittal and such other documents reasonably requested by Parent or the Paying Agent. Upon surrender to the Paying Agent of Certificates (or effective affidavits of loss in lieu thereof in accordance with Section 2.6(f)), together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be reasonably required pursuant to such instructions, the holder of such Certificates shall be entitled to receive in exchange therefor the Merger Consideration for each Share formerly evidenced by such Certificates, and such Certificates shall then be canceled. Parent shall cause the Paying Agent to issue and send to each holder of Book-Entry Shares entitled to receive the Merger Consideration pursuant to Section 2.5, a check or wire transfer for the amount of Merger Consideration due to such holder of Book-Entry Shares without such holder being required to deliver a Certificate or an executed letter of transmittal to the Paying Agent, and such Book-Entry Shares shall then be canceled. No interest shall accrue or be paid on the Merger Consideration payable upon the surrender of any Certificates or Book-Entry Shares for the benefit of the holder thereof. If the payment of any Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificates formerly evidencing the Shares is registered on the stock transfer books of the Company, it shall be a condition of payment that the Certificate so surrendered shall be endorsed properly or otherwise be in proper form for transfer and that the Person requesting such payment shall have paid all transfer and other similar Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of the Certificate surrendered, or shall have established to the satisfaction of the Surviving Corporation that such Taxes either have been paid or are not applicable. None of Parent, Purchaser and the Surviving Corporation shall have any liability for transfer and other similar Taxes described in this Section 2.6(b) under any circumstance. Payment of the applicable Merger Consideration with respect to Book-Entry Shares shall only be made to the Person in whose name such Book-Entry Shares are registered.

(c) At any time following six months after the Effective Time, the Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds which had been made available to the Paying Agent and not disbursed to holders of Certificates or Book-Entry Shares (including, all interest and other income received by the Paying Agent in respect of all funds made available to it), and, thereafter, such holders shall be entitled to look to the Surviving Corporation (subject to abandoned property, escheat and other similar Legal Requirements) only as general creditors thereof with respect to the Merger Consideration that may be payable upon due surrender of the Certificates or Book-Entry Shares held by them. Neither Parent, the Surviving Corporation nor the Paying Agent shall be liable to any holder of Certificates or Book-Entry Shares for the Merger Consideration delivered in respect of such Share to any Governmental Body pursuant to any abandoned property, escheat or other similar Legal Requirements. Any amounts remaining unclaimed by such holders at such time at which such amounts would otherwise escheat to or become property of any Governmental Body shall become, to the extent permitted by applicable Legal Requirements, the property of the Surviving Corporation or its designee, free and clear of all claims or interest of any Person previously entitled thereto.

 

8.


(d) At the Effective Time, the stock transfer books of the Company with respect to the Shares shall be closed and thereafter there shall be no further registration of transfers of Shares on the records of the Company. From and after the Effective Time, the holders of the Shares outstanding immediately prior to the Effective Time shall cease to have any rights with respect to such shares except as otherwise provided herein or by applicable Legal Requirements.

(e) Each of the Paying Agent, Parent, Purchaser, and the Surviving Corporation shall be entitled to deduct and withhold from any cash amounts payable pursuant to this Agreement such amounts as it is required to deduct or withhold therefrom under applicable Tax Legal Requirements. Amounts so deducted or withheld and properly remitted to the appropriate Governmental Body shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

(f) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as Parent may direct, as indemnity against any claim that may be made against Parent, Purchaser, the Surviving Corporation or any of their respective Affiliates with respect to such Certificate (which shall not exceed the Merger Consideration payable with respect to such Certificate), the Paying Agent will pay (less any amounts entitled to be deducted or withheld pursuant to Section 2.6(e)), in exchange for such lost, stolen or destroyed Certificate, the applicable Merger Consideration to be paid in respect of the Shares formerly represented by such Certificate, as contemplated by this Section 2.

2.7 Dissenters Rights. Shares outstanding immediately prior to the Effective Time, and held by holders who are entitled to demand appraisal rights under Section 262 of the DGCL and have properly exercised and perfected their respective demands for appraisal of such shares in the time and manner provided in Section 262 of the DGCL and, as of the Effective Time, have neither effectively withdrawn nor lost their rights to such appraisal and payment under the DGCL (the “Dissenting Shares”), shall not be converted into the right to receive Merger Consideration, but shall, by virtue of the Merger, be automatically cancelled and no longer outstanding, shall cease to exist and the holder thereof shall be entitled to only such consideration as shall be determined pursuant to Section 262 of the DGCL; provided, that if any such holder shall have failed to perfect or shall have effectively withdrawn or lost such holder’s right to appraisal and payment under the DGCL in respect of any such Shares, such holder’s Shares shall be deemed to have been converted as of the Effective Time into the right to receive the Merger Consideration (less any amounts entitled to be deducted or withheld pursuant to Section 2.6(e)), and such shares shall not be deemed to be Dissenting Shares. Within ten (10) days after the Effective Time, the Surviving Corporation shall provide each of the holders of Dissenting Shares with the second notice contemplated by Section 262(d)(2) of the DGCL. The Company shall give Parent prompt notice of any demands received by the Company for appraisal of Shares. Notwithstanding anything herein to the contrary, Parent and Purchaser shall have the right to direct and participate in all negotiations and Legal Proceedings with respect to any such demands, and the Company shall not, without the prior written consent of Parent, settle or offer to settle, or make any payment with respect to, any such demands, approve any withdrawal of any such demands or agree or commit to do any of the foregoing.

 

9.


2.8 Company Equity Awards.

(a) Treatment of Company Equity Awards

(i) Company Options. Each Company Option that is outstanding as of immediately prior to the Effective Time shall automatically accelerate and become fully vested and exercisable effective immediately prior to, and contingent upon, the Effective Time. As of the Effective Time, by virtue of the Merger and without any further action on the part of the holders thereof, Parent, Purchaser or the Company, each Company Option that is then outstanding and unexercised as of immediately before the Effective Time shall be cancelled and converted into the right to receive cash in an amount equal to the product of (i) the total number of Shares subject to such Company Option immediately prior to the Effective Time, multiplied by (ii) the excess, if any, of (x) the Merger Consideration over (y) the exercise price payable per Share under such Company Option, which amount shall be paid in accordance with Section 2.8(b); provided, that no holder of a Company Option that has an exercise price per Share that is equal to or greater than the Merger Consideration shall be entitled to any payment with respect to such cancelled Company Option before or after the Effective Time.

(ii) Company RSU Awards. Each Company RSU Award that is outstanding as of immediately prior to the Effective Time shall automatically accelerate and become fully vested effective immediately prior to, and contingent upon, the Effective Time. In lieu of any issuance of Shares in settlement of any Company RSU Award that is outstanding as of immediately prior to the Effective Time, as of the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Purchaser, the Company, the holder of such Company RSU Award or any other Person, such Company RSU Award shall be automatically cancelled and converted into the right to receive the Merger Consideration in respect of each Share subject to such Company RSU Award, less applicable withholding obligations.

(b) At or prior to the Effective Time, the Company, the Company Board and the Compensation Committee of the Company Board, as applicable, shall adopt any resolutions and take any actions that are necessary to effectuate the provisions of Section 2.8(a). The Company shall take all actions necessary to ensure that from and after the Effective Time neither Parent nor the Surviving Corporation will be required to deliver Shares or other capital stock of the Company to any Person pursuant to or in settlement of any Company Option or Company RSU Award. All amounts payable to holders of Company Options or Company RSU Awards pursuant to Section 2.8(a) shall be paid through the payroll of Parent, the Surviving Corporation or their Affiliates no later than the second payroll date following the Closing.

2.9 Further Action. If, at any time after the Effective Time, any further action is reasonably determined by Parent to be necessary or desirable to carry out the purposes of this Agreement or to vest the Surviving Corporation with full right, title and possession of and to all rights and property of Purchaser and the Company, the officers and directors of the Surviving Corporation and Parent shall be fully authorized (in the name of Purchaser, in the name of the Company and otherwise) to take such action.

 

10.


SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to Parent and Purchaser as follows (it being understood that each representation and warranty contained in Section 3 is subject to (a) exceptions and disclosures set forth in the part or subpart of the Company Disclosure Schedule corresponding to the particular section or subsection in this Section 3, (b) any exception or disclosure set forth in any other part or subpart of the Company Disclosure Schedule to the extent it is reasonably apparent on its face from the wording of such exception or disclosure that such exception or disclosure is applicable to qualify such representation and warranty and (c) disclosure in the Company SEC Documents publicly filed since December 31, 2017 and at least two (2) Business Days prior to the date of this Agreement; provided, that in no event shall any information in the “Risk Factors” or “Forward-Looking Statements” sections of such Company SEC Documents or other cautionary or forward-looking statements in such Company SEC Documents be deemed to be an exception to or disclosure for the purposes of the Company’s representations and warranties contained in this Section 3):

3.1 Due Organization; Subsidiaries, Etc.

(a) The Company is an Entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all necessary power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; and (ii) to own and use its assets in the manner in which its assets are currently owned and used. The Company is qualified or licensed to do business as a foreign Entity, and is in good standing, in each jurisdiction where the nature of its business requires such qualification or licensing, except where the failure to be so qualified, licensed or in good standing does not have and would not reasonably be expected to have a Material Adverse Effect.

(b) Part 3.1(b) of the Company Disclosure Schedule identifies each Subsidiary of the Company and indicates its jurisdiction of organization. No Acquired Corporation owns any capital stock of, or any other equity interest of, or any equity interest of any nature in, any other Entity other than the Entities identified in Part 3.1(b) of the Company Disclosure Schedule. No Acquired Corporation has agreed or is obligated to make, and is not bound by any Contract under which it may become obligated to make, any future equity investment in or capital contribution to any other Entity.

(c) Each Subsidiary of the Company is an Entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, except where the failure to be in good standing does not have, and would not reasonably be expected to have, a Material Adverse Effect.

3.2 Certificate of Incorporation and Bylaws. The Company has delivered or made available to Parent or Parent’s Representatives accurate and complete copies of the Certificate of Incorporation, bylaws and other charter and organizational documents (as applicable) of each of the Acquired Corporations, including all amendments thereto, as in effect on the date hereof.

 

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3.3 Capitalization, Etc.

(a) The authorized capital stock of the Company consists of: (i) 110,000,000 Shares, of which 48,356,839 Shares have been issued or are outstanding as of the close of business on the Reference Date; and (ii) 10,000,000 shares of Company Preferred Stock, none of which are issued or outstanding as of the close of business on the day immediately preceding the date of this Agreement. All of the outstanding Shares have been duly authorized and validly issued, and are fully paid and nonassessable.

(b) (i) None of the outstanding Shares is entitled or subject to any preemptive right, right of repurchase or forfeiture, right of participation, right of maintenance or any similar right, (ii) none of the outstanding Shares is subject to any right of first refusal in favor of the Company, (iii) there are no outstanding bonds, debentures, notes or other Indebtedness of the Company having a right to vote on any matters on which the stockholders of the Company have a right to vote and (iv) there is no Company Contract relating to the voting or registration of, or restricting any Person from purchasing, selling, pledging or otherwise disposing of (or from granting any option or similar right with respect to), any Shares. The Company is not under any obligation, nor is it bound by any Contract pursuant to which it may become obligated, to repurchase, redeem or otherwise acquire any outstanding Shares. The Company Common Stock constitutes the only outstanding class of securities of the Acquired Corporations registered under the Securities Act. All outstanding Shares have been offered and issued in compliance in all material respects with all applicable securities laws, including the Securities Act and “blue sky” laws.

(c) As of the close of business on the Reference Date: (i) 5,025,163 Shares are subject to issuance pursuant to Company Options granted and outstanding under the Company Equity Plans, (ii) 635,165 Shares are issuable upon the settlement of Company RSU Awards, and (iii) 37,153 shares of Company Common Stock are estimated to be subject to outstanding purchase rights under the ESPP (assuming that the closing price per share of Company Common Stock as reported on the purchase date for the current offering period was equal to the Offer Price). As of the close of business on the Reference Date, the weighted average exercise price of the Company Options outstanding as of such date was $3.98 per Share. The Company has delivered or made available to Parent or Parent’s Representatives copies of all Company Equity Plans covering the Company Options and Company RSU Awards outstanding as of the date of this Agreement and the forms of agreements evidencing such Company Options and Company RSU Awards. Other than as set forth in this Section 3.3(c) and Section 3.3(b), there is no issued, reserved for issuance, outstanding or authorized stock option, restricted stock unit award, performance stock award, stock appreciation, phantom stock, profit participation or similar rights or equity-based awards with respect to the Company. No Company Option or Company RSU Award is subject to Section 409A of the Code.

(d) Except as set forth in this Section 3.3, as of the close of business on the Reference Date, there are no: (i) outstanding shares of capital stock, or other equity interest in the Acquired Corporations; (ii) outstanding subscriptions, options, calls, warrants or rights (whether or not currently exercisable) to acquire any shares of capital stock, restricted stock units, stock-based performance units or any other rights that are linked to, or the value of which is in any way based on or derived from the value of any shares of capital stock or other securities

 

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of the Acquired Corporations; (iii) outstanding securities, instruments, bonds, debentures, notes or obligations that are or may become convertible into or exchangeable for any shares of the capital stock or other securities of the Acquired Corporations; or (iv) stockholder rights plans (or similar plan commonly referred to as a “poison pill”) or Contracts under which any Acquired Corporation is or may become obligated to sell or otherwise issue any shares of its capital stock or any other securities.

(e) All of the outstanding capital stock or other voting securities of, or ownership interests in, each Subsidiary of the Company is owned by the Company, directly or indirectly, beneficially and of record, free and clear of all Encumbrances and transfer restrictions, except for such Encumbrances and transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities laws.

3.4 SEC Filings; Financial Statements.

(a) Since January 1, 2017, the Company has filed or furnished on a timely basis all reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein) required to be filed or furnished by the Company with the SEC (the “Company SEC Documents”). As of their respective dates, the Company SEC Documents complied in all material respects with the requirements of the Securities Act, the Exchange Act or the Sarbanes-Oxley Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Company SEC Documents and, except to the extent that information contained in such Company SEC Document has been revised, amended, modified or superseded (prior to the date of this Agreement) by a later filed Company SEC Document, none of the Company SEC Documents when filed or furnished contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. No executive officer of the Company has failed to make the certifications required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act with respect to any Company SEC Document filed or furnished by the Company with the SEC since January 1, 2017.

(b) The consolidated financial statements (including any related notes and schedules) contained or incorporated by reference in the Company SEC Documents: (i) complied as to form in all material respects with the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods covered (except as may be indicated in the notes to such financial statements or as permitted by Regulation S-X, or, in the case of unaudited financial statements, as permitted by Form 10-Q, Form 8-K or any successor form under the Exchange Act); and (iii) fairly present, in all material respects, the financial position of the Company and its consolidated Subsidiaries as of the respective dates thereof and the results of operations and cash flows of the Company and its consolidated Subsidiaries for the periods covered thereby (subject, in the case of the unaudited financial statements, to normal and recurring year-end adjustments that are not, individually or in the aggregate, material). No financial statements of any Person other than the consolidated Subsidiaries of the Company are required by GAAP to be included in the consolidated financial statements of the Company.

(c) The Company maintains, and at all times since January 1, 2017, has maintained, a system of internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)

 

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which is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; (iii) provide reasonable assurance that violations of applicable Anti-Corruption Laws will be prevented and detected, and that none of the Acquired Corporations maintain any off-the-books accounts or more than one set of books or financial records; and (iv) provide reasonable assurance regarding prevention or timely detection of any other unauthorized acquisition, use or disposition of the assets of the Company that could have a material effect on the financial statements. To the Knowledge of the Company, except as set forth in the Company SEC Documents filed prior to the date of this Agreement, since January 1, 2017, neither the Company nor the Company’s independent registered accountant has identified or been made aware of: (i) any significant deficiency or material weakness in the design or operation of internal control over financial reporting utilized by the Company; (ii) any illegal act or fraud, whether or not material, that involves the management or other employees of the Company; or (iii) any claim or allegation regarding any of the foregoing.

(d) The Company maintains disclosure controls and procedures required by Rule 13a-15 or 15d-15 under the Exchange Act that are designed to ensure that all information required to be disclosed in the Company’s reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to enable each of the principal executive officer of the Company and the principal financial officer of the Company to make the certifications required under the Exchange Act with respect to such reports.

(e) No Acquired Corporation is a party to or has any obligation or other commitment to become a party to any securitization transaction, off-balance sheet partnership or any similar Contract (including any Contract relating to any transaction or relationship between or among the Company, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose Entity, on the other hand, or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K under the Exchange Act)) where the result, purpose or intended effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company in the Company’s published financial statements or other Company SEC Documents.

(f) As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC with respect to the Company SEC Documents. To the Knowledge of the Company, none of the Company SEC Documents is the subject of ongoing SEC review and there are no inquiries or investigations by the SEC or any internal investigations pending or threatened, in each case regarding any accounting practices of the Company.

 

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(g) Each document required to be filed by the Company with the SEC in connection with the Offer (the “Company Disclosure Documents”) (including the Schedule 14D-9), and any amendments or supplements thereto, when filed, distributed or disseminated, as applicable, will comply as to form in all material respects with the applicable requirements of the Exchange Act. The Company Disclosure Documents, at the time of the filing of such Company Disclosure Documents or any supplement or amendment thereto with the SEC and at the time such Company Disclosure Documents or any supplements or amendments thereto are first distributed or disseminated to the Company’s stockholders, will 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 made therein, in light of the circumstances under which they were made, not misleading.

(h) The information with respect to the Acquired Corporations that the Company furnishes to Parent or Purchaser specifically for use in the Schedule TO and the Offer Documents, at the time of the filing of the Schedule TO and at the time of any distribution or dissemination of the Offer Documents, 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.

(i) Since January 1, 2017, the Company has complied in all material respects with the applicable listing and corporate governance rules and regulations of Nasdaq.

(j) Notwithstanding the foregoing, the Company makes no representation with respect to statements made or incorporated by reference therein based on information supplied by or on behalf of Parent or Purchaser specifically for inclusion or incorporation by reference in the Company Disclosure Documents.

3.5 Absence of Changes. Since January 1, 2018, there has not occurred any event, change, action, failure to act or transaction that, individually or in the aggregate, has had or would be reasonably expected to have, a Material Adverse Effect. Except as expressly contemplated by this Agreement, since January 1, 2018 through the date of this Agreement, (a) the Company has operated in all material respects in the ordinary course of business consistent with past practice (except for discussions, negotiations and transactions related to this Agreement or other potential strategic transactions) and (b) except as disclosed in the most recent Quarterly Report on Form 10-Q filed by the Company with the SEC (the “10-Q”) the Company has not: (i) effected any equity issuance, recapitalization, reclassification, distribution, equity split or like change in its capitalization; (ii) subjected any material portion of its properties or assets to any Encumbrances, except for Permitted Encumbrances; (iii) sold, assigned or transferred any material portion of its tangible assets, except in the ordinary course of business and except for sales of obsolete assets or assets with de minimis or no book value; (iv) sold, assigned or transferred any patents, trademarks, trade names or copyrights, except in the ordinary course of business; (v) made any material capital investment in, or any material loan to, any other Person, except in the ordinary course of business or pursuant to any existing agreement or budget; (vi) amended its organizational documents; or (vii) made, changed or revoked any material Tax election, adopted or changed any accounting method in respect of Taxes (except as required by Legal Requirements), amended any Tax Returns, entered into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or

 

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non-U.S. Legal Requirements), settled any claim or assessment in respect of Taxes, or consented to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes.

3.6 Title to Assets. The Acquired Corporations have good and valid title to all material tangible assets owned by them, including all material tangible assets (other than capitalized or operating leases) reflected on the Company’s unaudited balance sheet in the 10-Q (the “Balance Sheet”) (but excluding intellectual property which is covered by Section 3.8), except for assets sold or otherwise disposed of in the ordinary course of business since the date of such Balance Sheet.

3.7 Real Property. The Acquired Corporations do not currently own and have never owned any real property. Except as would not reasonably be expected to have a Material Adverse Effect, the Acquired Corporations hold a valid and existing leasehold interest in the real property that is leased by the Acquired Corporations from another Person as set forth on Part 3.7 of the Company Disclosure Schedule (the “Leased Real Property”), free and clear of all Encumbrances other than Permitted Encumbrances. Since January 1, 2017 through the date of this Agreement, none of the Acquired Corporations have received any written notice regarding (a) any violation or breach or default under any Company Lease that has not since been cured, (b) any pending or threatened condemnation of any portion of the Leased Real Property, or (c) any building, fire, or zoning code violations with respect to the Leased Real Property that have not since been cured.

3.8 Intellectual Property.

(a) Part 3.8(a)(i) of the Company Disclosure Schedule sets forth a true and correct list of all Registered IP and material unregistered Intellectual Property Rights owned in whole or in part by the Company (collectively, the “Scheduled IP”), and identifies (i) the name of applicant/registrant, (ii) the jurisdiction of application/registration and (iii) the application or registration number for each item of Registered IP. Each of the patents and patent applications included in the Scheduled IP that is solely owned or co-owned by an Acquired Corporation properly identifies by name each and every Company Associate that is an inventor of the claims thereof as determined in accordance with applicable Legal Requirements of the United States, and to the Knowledge of the Company, the Legal Requirements of each country in which such patent or patent application is filed. Other than as set forth on Part 3.8(a)(ii) of the Company Disclosure Schedule, the Acquired Corporations exclusively own and possess all right, title and interest in and to, or have the right to use, pursuant to a valid and enforceable agreement, all Company IP used by the Acquired Corporations or otherwise necessary for the operation of the business of the Acquired Corporations, as currently conducted, free and clear of all Encumbrances other than Permitted Encumbrances. As of the date of this Agreement, other than as set forth on Part 3.8(a)(iii) of the Company Disclosure Schedule, no Registered IP listed on Part 3.8(a)(i) of the Company Disclosure Schedule has been the subject of any interference, opposition, cancellation, reissue, reexamination or other substantially similar proceeding of any nature (other than initial examination proceedings) that has not been finally resolved, and no such proceeding is pending or threatened in writing, in each case in which the scope, validity, enforceability or ownership of any Registered IP listed on Part 3.8(a)(i) of the Company Disclosure Schedule is being or has been contested or challenged.

 

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(b) No current or former Company Associate owns or has any claim, right (whether or not currently exercisable) or interest to or in any Company IP and each current and former Company Associate who is or was involved in the creation or development of any material Company IP (including any Registered IP) has signed a written agreement containing an assignment of all Intellectual Property Rights relating to such Company IP to an Acquired Corporation and confidentiality provisions protecting such material Company IP.

(c) No funding, facilities or personnel of any Governmental Body or any university, college, research institute or other educational institution has been or is being used to create, in whole or in part, Intellectual Property Rights owned or purported to be owned by an Acquired Corporation, except for any such funding or use of facilities or personnel that does not result in such Governmental Body or institution obtaining ownership rights to such Intellectual Property Rights.

(d) Part 3.8(d) of the Company Disclosure Schedule sets forth each license agreement pursuant to which an Acquired Corporation licenses in any Intellectual Property Right (each an “In-bound License”) or licenses out any Intellectual Property Right owned by an Acquired Corporation (each an “Out-bound License”) (provided, that, In-bound Licenses shall not include commercially available off-the-shelf software agreements, clinical trial agreements and material transfer agreements entered into in the ordinary course of business, and Out-bound Licenses shall not include clinical trial agreements, material transfer agreements and non-exclusive outbound licenses entered into in the ordinary course of business).

(e) Neither the operation of the business of the Acquired Corporations nor the development, sale or exploitation by or on behalf of the Acquired Corporations of any product in which any Company IP is embedded infringes, has infringed, misappropriates, has misappropriated, or otherwise violates or has violated any Intellectual Property Rights of any other Person. To the Knowledge of the Company, no other Person is infringing, misappropriating or otherwise violating any Company IP owned by or exclusively licensed to an Acquired Corporation. As of the date of this Agreement, no Legal Proceeding is pending and served (or, to the Knowledge of the Company, is being threatened or is pending and has not been served) against an Acquired Corporation or by an Acquired Corporation relating to any actual, alleged or suspected infringement, misappropriation or other violation of any Intellectual Property Rights of another Person or of the Company’s Registered IP or the Company’s Intellectual Property Rights. Since January 1, 2016, the Company has not received any written notice or other written communication relating to any actual, alleged or suspected infringement, misappropriation or other violation of any Intellectual Property Right of another Person by an Acquired Corporation, including any request that an Acquired Corporation consider taking a license under any patents owned by another Person. No Acquired Corporation has received a formal or written opinion of counsel regarding possible infringement, misappropriation or violation by any Acquired Corporation of any Intellectual Property Rights of any other Person or the validity or enforceability of any Intellectual Property Rights of any other Person. The Acquired Corporations have the exclusive, unrestricted right to sue for past, present and future infringement of the Company IP owned or purported to be owned by, or exclusively licensed to, an Acquired Corporation.

(f) None of the Acquired Corporations is now nor has ever been a member or promoter of, or a contributor to, any industry standards body or any similar organization that would reasonably be expected to

 

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require or obligate the Acquired Corporation to grant or offer to any other Person any license or right to any Company IP.

(g) None of the Company IP owned or purported to be owned by, or exclusively licensed to, an Acquired Corporation, and to the Knowledge of the Company, none of the Company IP exclusively licensed to the Company, is subject to any pending or outstanding injunction, directive, order, judgment or other disposition of dispute that adversely restricts the use, transfer, registration or licensing of any such Company IP by the Acquired Corporations or otherwise adversely affects the validity, scope, use, registrability, or enforceability of any Company IP. The Acquired Corporations have not transferred ownership of, or granted any exclusive license with respect to any Company IP, nor has any Acquired Corporation agreed to otherwise restrict or limit its use of any Company IP. Upon the consummation of the Closing, Parent shall succeed to all of the Company’s rights in the Company IP, and all of such rights in the Company IP shall be exercisable by Parent to the same extent as by the Acquired Corporations prior to the Closing on substantially the same terms, including with respect to any relevant royalty rates. No loss, cancellation or expiration of any of the Company IP is pending or threatened in writing, or to the Knowledge of the Company, reasonably foreseeable, other than standard patent term expiration under applicable Legal Requirements.

(h) The Acquired Corporations have taken commercially reasonable efforts consistent with common industry practice to protect the Company IP and have maintained the confidentiality of all information that constitutes or constituted a trade secret of any Acquired Corporation. The Acquired Corporations have not taken any action or failed to take any action that could reasonably be expected to result in the abandonment, cancellation, forfeiture, relinquishment, invalidation or unenforceability of any Company IP (including the failure to pay any filing, examination, issuance, post registration and maintenance fees, annuities and the like and the failure to disclose any known material prior art in connection with the prosecution of patent applications), other than intentional abandonment of Company IP in the ordinary course of business. Without limiting the generality of the foregoing, to the Knowledge of the Company, no acts or omissions of any Acquired Corporation or any party acting on behalf of or at the direction of any Acquired Corporation have invalidated or rendered unenforceable any patents or patent applications that are part of the Scheduled IP under the laws of any jurisdiction as a result of (i) disclosure of the invention or circulation of a printed publication that describes the claimed invention, (ii) public use of the claimed invention, (iii) sale or offer for sale of the claimed invention prior to the application for such patent or patent application, (iv) misrepresenting any Acquired Corporation’s patent rights to a standard-setting organization, (v) failing to disclose material prior art reasonably discoverable by the Company in connection with the prosecution of any such patent or patent application or (vi) the engaging in of any licensing practices that constitute patent misuse. All patents and patent applications and trademarks and trademark applications included in the Scheduled IP have been prosecuted in compliance with the rules and procedures of the United States Patent and Trademark Office (or to the Knowledge of the Company, the equivalent rules or processes of any other Governmental Body anywhere in the world where Scheduled IP has been filed) and all patent applications and trademark applications included in the Scheduled IP are true and correct in all material respects, including, in the case of patent applications, with respect to inventorship.

 

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(i) The Acquired Corporations maintain commercially reasonable policies regarding data security, privacy, transfer, and use of personally identifiable information and sensitive business information (collectively, “Sensitive Data”) that support compliance by the Acquired Corporations with all applicable Legal Requirements. The Acquired Corporations are in compliance with all such policies in all material respects and other Legal Requirements pertaining to data privacy and data security of any Sensitive Data. To the Knowledge of the Company, since January 1, 2017, there have been (i) no losses or thefts of data or security breaches relating to Sensitive Data used in the business of the Acquired Corporations, (ii) no violations of any security policy of any Acquired Corporations regarding any such Sensitive Data, (iii) no unauthorized access or unauthorized use of any Sensitive Data used in the business of the Acquired Corporations and (iv) no unintended or improper disclosure of any personally identifiable information in the possession, custody or control of any Acquired Corporation or a contractor or agent acting on behalf of any Acquired Corporation.

3.9 Contracts.

(a) Part 3.9(a) of the Company Disclosure Schedule identifies each Company Contract that constitutes a Material Contract as of the date of this Agreement. For purposes of this Agreement, each of the following Company Contracts shall be deemed to constitute a “Material Contract”:

(i) any Company Contract (other than any Company Contract underlying any Company Equity Award that is in the Company’s standard form) constituting a Company Employee Agreement pursuant to which the Company is or may become obligated to (A) make any severance, termination or similar payment to any Company Associate except for severance, termination or similar payments required by applicable Legal Requirements that do not exceed $150,000 per beneficiary, (B) make any bonus, deferred compensation or similar payment (other than payments constituting base salary, bonuses or commissions paid in the ordinary course of business consistent with past practice) or (C) accelerate the vesting of any Company Equity Award other than accelerated vesting provided in Company Equity Plans;

(ii) any Company Contract that is a settlement, conciliation or similar agreement with any Governmental Body and pursuant to which (A) any Acquired Corporation will be required after the date of this Agreement to make any payments or (B) that contains material obligations or limitations on any Acquired Corporation’s conduct;

(iii) any Company Contract (A) limiting the freedom or right of an Acquired Corporation, in any respect, to engage in any line of business, to make use of any Company IP or to compete with any other Person in any location or line of business or (B) containing any “most favored nations,” “right of first offer,” “right of first look” or “right of first refusal” terms and conditions (including with respect to pricing) granted by an Acquired Corporation or exclusivity obligations or restrictions or otherwise limiting the freedom or right of an Acquired Corporation to license any Company IP, or to sell, distribute or manufacture any products or services or any technology or other assets to or for any other Person;

(iv) any Company Contract that requires by its terms or is reasonably likely to require the payment or delivery of cash or other consideration, including royalties or milestone payments and including upon the

 

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achievement of regulatory or commercial milestones, by or to an Acquired Corporation in an amount having an expected value in excess of $500,000 in the fiscal year ending December 31, 2019 or in any single fiscal year thereafter and cannot be cancelled by the Acquired Corporations without penalty or further payment without more than 180 days’ notice (other than payments for services rendered or goods delivered as of the date of such termination and payments for reasonable wind-down costs), excluding commercially available off-the-shelf software licenses and Software-as-a-Service offerings, generally available patent license agreements, material transfer agreements, services agreements and non-exclusive outbound license agreements, in each case entered into in the ordinary course of business;

(v) any Company Contract relating to Indebtedness in excess of $200,000 (whether incurred, assumed, guaranteed or secured by any asset) of any Acquired Corporation;

(vi) any Company Contract constituting a joint venture, partnership, collaboration or limited liability company;

(vii) any In-bound License or Out-bound License;

(viii) any Company Contract that requires or permits any Acquired Corporation, or any successor, to, or acquirer of any Acquired Corporation, to make any payment to another Person as a result of a change of control of any Acquired Corporation (a “Change of Control Payment”) or gives another Person a right to receive or elect to receive a Change of Control Payment;

(ix) any Company Contract that prohibits the payment of dividends or distributions in respect of the capital stock of any Acquired Corporation, the pledging of the capital stock or other equity interests of any Acquired Corporation or prohibits the issuance of any guaranty by any Acquired Corporation;

(x) any other Company Contract that is currently in effect and has been filed (or is required to be filed) by the Company as an exhibit pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act or that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act;

(xi) any Company Contract with any Affiliate, director, executive officer (as such term is defined in the Exchange Act), holder of 5% or more of Shares or, to the Knowledge of the Company, any of their Affiliates (other than the Company) or immediate family members (other than offer letters that can be terminated at will without severance obligations and Company Contracts pursuant to Company Equity Awards);

(xii) any Company Contract for the lease or sublease of any material real property (including, for avoidance of doubt, all Company Leases);

(xiii) any Company Contract entered into since January 1, 2016 that relates to the acquisition or disposition of any material business, a material amount of stock or assets of any Person or any real property

 

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(whether by merger, sale of stock, sale of assets or otherwise) but excluding any material transfer agreements, clinical trial agreements and non-exclusive licenses granted in the ordinary course of business;

(xiv) any Company Contract with any Governmental Body;

(xv) any Company Contract the primary purpose of which is to provide for indemnification or guarantee of the obligations of any other Person that would be material to any Acquired Corporation, other than any such Company Contracts entered into in the ordinary course of business;

(xvi) any Company Contract that relates to regulatory activities, filings and interactions with Governmental Bodies, or for the conduct of research, clinical trial, development, distribution, sale, supply, license, marketing, co-promotion or manufacturing by third parties of (A) products (including products under development) of an Acquired Corporation or (B) products (including products under development) licensed by an Acquired Corporation, in each case of clause (A) and (B) where such contract is reasonably likely to require future annual expenditures greater than $500,000 in the aggregate; and

(xvii) any hedging, swap, derivative or similar Company Contract.

(b) At least two (2) Business Days prior to the date of this Agreement, the Company has either delivered or made available to Parent or Parent’s Representatives an accurate and complete copy of each Material Contract or has publicly made available a non-redacted copy of such Material Contract in the Electronic Data Gathering, Analysis and Retrieval (EDGAR) database of the SEC. Neither the applicable Acquired Corporation nor, to the Knowledge of the Company, the other party is in breach of or default under any Material Contract and, neither the applicable Acquired Corporation, nor, to the Knowledge of the Company, the other party has taken or failed to take any action that with or without notice, lapse of time or both would constitute a breach of or default under any Material Contract. Each Material Contract is, with respect to applicable Acquired Corporation and, to the Knowledge of the Company, the other party, a valid agreement, binding, and in full force and effect. To the Knowledge of the Company, each Material Contract is enforceable by the applicable Acquired Corporation in accordance with its terms, subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. Since January 1, 2017 through the date of this Agreement, the Acquired Corporations have not received any written notice regarding any violation or breach or default under any Material Contract that has not since been cured. No Acquired Corporation has waived in writing any rights under any Material Contract, the waiver of which would have, either individually or in the aggregate, a Material Adverse Effect.

3.10 Liabilities. The Acquired Corporations do not have any material liabilities of any nature (whether accrued, absolute, contingent or otherwise), whether or not of the type required to be disclosed in the liabilities column of a consolidated balance sheet prepared in accordance with GAAP, except for: (i) liabilities disclosed on the Balance Sheet contained in the Company SEC Documents filed prior to the date of this Agreement; (ii) liabilities or obligations incurred pursuant to the terms of this Agreement; (iii) liabilities for performance of obligations of any Acquired Corporations under Contracts binding upon the applicable Acquired Corporation

 

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(other than resulting from any breach or acceleration thereof) either delivered or made available to Parent or Parent’s Representatives prior to the date of this Agreement or entered into in the ordinary course of business; and (iv) liabilities incurred in the ordinary course of business since the date of the Balance Sheet.

3.11 Compliance with Legal Requirements. Each Acquired Corporation is, and since January 1, 2016 has been, in compliance with all applicable Legal Requirements, except where the failure to be in compliance has not had and would not reasonably be expected to have a Material Adverse Effect and, since January 1, 2016 through the date of this Agreement, no Acquired Corporation has been given written notice of, or been charged with, any unresolved violation of any Legal Requirement, except, in each case, for any such violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth on Part 3.11 of the Company Disclosure Schedule, since January 1, 2016, there have not been (i) any allegations or formal or informal complaints made to or filed with the Acquired Corporations related to discrimination, harassment, misconduct or similar matters; or (ii) any other Legal Proceedings initiated, filed or, to the Knowledge of the Company, threatened, against the Acquired Corporations related to such matters.

3.12 Regulatory Matters.

(a) The Acquired Corporations have filed with the applicable regulatory authorities (including the FDA or any other Governmental Body performing functions similar to those performed by the FDA) all required material filings, declarations, listings, registrations, reports or submissions, including but not limited to adverse event reports and aggregate safety reports that are required to be filed. All such filings, declarations, listings, registrations, reports or submissions were in material compliance with applicable Legal Requirements when filed, and no deficiencies have been asserted by any applicable Governmental Body with respect to any such filings, declarations, listing, registrations, reports or submissions.

(b) Except as would not reasonably be expected to have a Material Adverse Effect, (i) all preclinical and clinical investigations sponsored by the Acquired Corporations, and, to the Knowledge of the Company, all activities with respect to the Acquired Corporations conducted by contract manufacturing organizations, contract research organizations or other suppliers of the Acquired Corporations, have been and are being conducted in material compliance with applicable Legal Requirements, rules, regulations and guidances, including Good Clinical Practices and current Good Manufacturing Practices requirements, Environmental Laws, other laws, rules and regulations relating to occupational safety and health, and federal and state laws, rules, regulations and guidances restricting the use and disclosure of individually identifiable health information, and (ii) to the Knowledge of the Company, all collaborators of the Acquired Corporations are in compliance with applicable safety data reporting obligations and have provided the Acquired Corporations with material safety data and serious adverse events from collaborator studies. To the Knowledge of the Company, all safety data from collaborator studies is consistent in all material respects with the safety data made available to Parent and Purchaser. The Acquired Corporations have not received any written notices or other correspondence from the FDA or any other foreign, federal, state or local governmental or regulatory authority performing functions

 

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similar to those performed by the FDA with respect to any completed or ongoing clinical or pre-clinical studies or tests requiring the termination, suspension or material modification of such studies or tests.

(c) No Acquired Corporation has (i) made an untrue statement of a material fact or fraudulent statement to the FDA or any Governmental Body, (ii) failed to disclose a material fact required to be disclosed to the FDA or (iii) committed any other act, made any statement or failed to make any statement, that (in any such case) establishes a reasonable basis for the FDA to invoke its Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities Final Policy. No Acquired Corporation is the subject of any pending or, to the Company’s Knowledge, threatened investigation by the FDA pursuant to its Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities Final Policy. None of the Acquired Corporations nor, to the Knowledge of the Company, any officers, employees, agents or clinical investigators of the Acquired Corporations has been suspended or debarred or convicted of any crime or engaged in any conduct that would reasonably be expected to result in (A) debarment under 21 U.S.C. Section 335a or any similar Legal Requirement or (B) exclusion under 42 U.S.C. Section 1320a-7 or any similar Legal Requirement.

(d) Except as would not reasonably be expected to have a Material Adverse Effect, each Acquired Corporation is in compliance and since January 1, 2016, has been in compliance with all healthcare laws applicable to the operation of its business as currently conducted, including (i) any and all federal, state and local fraud and abuse laws, including the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7(b)), the civil False Claims Act (31 U.S.C. § 3729 et seq.) and the regulations promulgated pursuant to such statutes; (ii) the FDCA; (iii) the Public Health Services Act; (iv) the Health Insurance Portability and Accountability Act of 1996, the Health Information and Technology for Economic and Clinical Health Act, and the regulations promulgated pursuant thereto; (v) Legal Requirements which are cause for exclusion from any federal health care program; (vi) Legal Requirements relating to the billing or submission of claims, collection of accounts receivable, underwriting the cost of, or provision of management or administrative services in connection with, any and all of the foregoing, by any Acquired Corporations; and (vii) the General Data Protection Regulation (EU) 2016/679. The Acquired Corporations are not subject to any enforcement, regulatory or administrative proceedings against or affecting any Acquired Corporations relating to or arising under the FDCA, the Anti-Kickback Statute, or similar Legal Requirements, and no such enforcement, regulatory or administrative proceeding has been threatened.

3.13 Certain Business Practices. None of the Acquired Corporations, any of their respective directors, officers or employees (acting in the capacity of a director, officer or employee, as applicable, and on behalf, of any Acquired Corporation), or, to the Knowledge of the Company, any of their other Representatives (acting in the capacity of a Representative, and on behalf, of any Acquired Corporation) has (i) used any funds (whether of an Acquired Corporation or otherwise) for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful offer or payment of money or anything of value to any foreign or domestic government officials or employees, including officials, employees, or Representatives of any Governmental Body, or to foreign or domestic political parties or campaigns or (iii) violated any provision of any Anti-Corruption Laws or any rules or regulations promulgated thereunder, anti-money laundering laws and any rules or regulations promulgated thereunder or any applicable Legal Requirement of similar effect in any

 

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jurisdiction in the world, including any jurisdiction in which any Acquired Corporation has a presence, transacts business of any kind, or has direct or indirect contact with any foreign or domestic government officials or employees, including officials, employees, or Representatives of any Governmental Body.

3.14 Governmental Authorizations. The Acquired Corporations hold all material Governmental Authorizations necessary to enable the Acquired Corporations to conduct its business in the manner in which its business is currently being conducted. All such material Governmental Authorizations are set forth on Part 3.14 of the Company Disclosure Schedule. The Governmental Authorizations held by the Acquired Corporations are, in all material respects, valid and in full force and effect. The Acquired Corporations are in compliance with the terms and requirements of such Governmental Authorizations, except where failure to be in compliance would not have a Material Adverse Effect.

3.15 Tax Matters.

(a) Except as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, all income and other material Tax Returns required to be filed by or on behalf of the Acquired Corporations with any Governmental Body on or before the Closing Date have been or will be filed on or before the applicable due date (taking into account any validly obtained extensions of such due date), and all such Tax Returns are (or will be in the case of such a Tax Return that has not been filed as of the date of this Agreement) true, correct and complete in all material respects. All Taxes required to be paid by or with respect to the Acquired Corporations on or before the Closing Date (whether or not shown as due on any such Tax Return) have been, or will be, paid, and the Balance Sheet reflects adequate accruals and reserves for all material Tax liabilities of the Acquired Corporations with respect to all periods through the date thereof in accordance with GAAP.

(b) Except as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, no deficiency for any Tax has been asserted or assessed by any Governmental Body in writing against any Acquired Corporation which deficiency has not been paid, settled or withdrawn or is not being contested in good faith and in accordance with applicable Legal Requirements.

(c) No audit or other proceeding by any Governmental Body is pending or threatened in writing with respect to any Taxes due from or with respect to the Acquired Corporations, no Governmental Body has given written notice of any intention to assert any deficiency or claim for additional Taxes against any of the Acquired Corporations, and no claim has been made by any Governmental Body in a jurisdiction where the Acquired Corporations do not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(d) Except as would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, each of the Acquired Corporations has complied with all applicable Legal Requirements relating to the payment, collection, withholding and remittance of Taxes (including information reporting requirements) with respect to payments made to any employee, creditor, independent contractor, stockholder, or other third party.

 

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(e) There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or assessment or reassessment of, Taxes due from any of the Acquired Corporations for any taxable period and no request for any such waiver or extension is currently pending.

(f) There are no Encumbrances with respect to Taxes upon any of the assets or properties of any of the Acquired Corporations, other than Permitted Encumbrances.

(g) No Acquired Corporation is (i) a party to or bound by any Tax sharing, receivable, allocation or indemnification agreement or arrangement that would have a continuing effect after the Closing Date (other than such agreements or arrangements with third parties made in the ordinary course of business, the primary subject matter of which is not Tax) or (ii) a party to any joint venture, partnership or other arrangement that could be reasonably treated as a partnership for Tax purposes. No Acquired Corporation (i) has ever been a member of an affiliated group (within the meaning of Section 1504(a) of the Code) filing a consolidated federal income Tax Return (other than a group the common parent of which was the Company) and (ii) has any material liability for the Taxes of another Person under Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign Legal Requirements), as a transferee or successor, or otherwise by operation of Legal Requirements.

(h) Within the past two (2) years, none of the Acquired Corporations has been either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code.

(i) None of the Acquired Corporations has entered into any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).

(j) No Acquired Corporation is a party to any Contract that would require it, nor does any Acquired Corporation have any obligation (current or contingent), to compensate any individual for excise taxes paid pursuant to Section 4999 of the Code.

(k) No Acquired Corporation will be required to include any item of income in, or exclude any item of deduction from, taxable income for any period (or portion thereof) ending after the Closing Date as a result of: (i) a change in method of accounting for a taxable period occurring prior to the Closing; (ii) a closing agreement, advance pricing agreement or other agreement with any Governmental Body relating to Taxes entered into prior to the Closing; (iii) an installment sale or open transaction disposition entered into on or prior to the Closing; (iv) a prepaid amount received prior to the Closing; or (v) an election under Section 108(i) of the Code.

3.16 Employee Matters; Benefit Plans.

(a) No Acquired Corporation is party to, has a duty to bargain for, or is currently negotiating in connection with entering into, any collective bargaining agreement or other Contract with a labor organization or work council representing any of its employees and there are no labor organizations representing, purporting to represent or, to the Knowledge of the Company, seeking to represent any employees of an Acquired Corporation. Since January 1, 2016, there has not been any strike, slowdown, work stoppage, lockout, job action, picketing, labor dispute, question concerning labor representation, union organizing activity, or any threat thereof, or any

 

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similar activity or dispute, affecting an Acquired Corporation or any of its employees. There is not now pending, and, to the Knowledge of the Company, no Person has threatened in writing to commence, any such strike, slowdown, work stoppage, lockout, job action, picketing, labor dispute, question regarding labor representation or union organizing activity or any similar activity or dispute. There is no Legal Proceeding pending or, to the Knowledge of the Company, threatened in writing relating to the employment or engagement of any Company Associate, including relating to any Company Employee Agreement, wages and hours, leave of absence, plant closing notification, employment statute or regulation, privacy right, labor dispute, workers’ compensation policy or long-term disability policy, safety, retaliation, immigration or discrimination matters, including charges of unfair labor practices or harassment complaints. Since January 1, 2016, the Acquired Corporations have complied in all material respects with all applicable Legal Requirements related to employment, including employment practices, wages, hours and other terms and conditions of employment.

(b) Part 3.16(b) of the Company Disclosure Schedule sets forth an accurate and complete list of the Employee Plans (other than any employment offer letter, termination or severance agreement for non-officer employees of any Acquired Corporation and equity grant notices, and related documentation, with respect to employees of the Acquired Corporations and agreements with consultants entered into in the ordinary course of business). The Company has either delivered or made available to Parent or Parent’s Representatives prior to the execution of this Agreement with respect to each material Employee Plan accurate and complete copies of the following (other than any employment offer letter, termination or severance agreement for non-officer employees of any Acquired Corporation and equity grant notices, and related documentation, with respect to employees of the Acquired Corporations and agreements with consultants entered into in the ordinary course of business), as relevant: (i) all plan documents and all amendments thereto, and all related trust or other funding documents, in each case currently in effect; (ii) any currently effective determination letter or opinion letter received from the IRS; (iii) the most recent annual actuarial valuation and the most recent Form 5500; (iv) the most recent summary plan descriptions and any material modifications thereto; and (v) the most recent nondiscrimination tests required to be performed under the Code.

(c) Neither an Acquired Corporation nor any other Person that would be or, at any relevant time, would have been considered a single employer with the Company under the Code or ERISA has during the past six (6) years maintained, contributed to, or been required to contribute to a plan subject to Title IV of ERISA or Code Section 412, including any “single employer” defined benefit plan or any “multiemployer plan” each as defined in Section 4001 of ERISA and no Acquired Corporation has any direct or contingent liability with respect to any such plan.

(d) Each of the Employee Plans that is intended to be qualified under Section 401(a) of the Code has obtained a favorable determination letter (or opinion letter, if applicable) as to its qualified status under the Code. Each of the Employee Plans is now and has been operated in all material respects in compliance with its terms and all applicable Legal Requirements, including but not limited to ERISA and the Code.

(e) Except as set forth on Part 3.16(e) of the Company Disclosure Schedule and except to the extent required under Section 601 et seq. of ERISA or 4980B of the Code (or any other similar state or local Legal

 

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Requirement), neither the Acquired Corporations nor any Employee Plan has any present or future obligation to provide post-employment welfare benefits to or make any payment to, or with respect to, any present or former employee, officer or director of an Acquired Corporation pursuant to any retiree medical benefit plan or other retiree welfare plan.

(f) Except as provided by Section 2.8(a), the consummation of the Transactions (including in combination with other events or circumstances) will not (i) entitle any current or former Company Associate to severance pay or any other cash payment, (ii) accelerate the time of payment or vesting, or increase the amount of, compensation or benefits due to any such Company Associate, (iii) directly or indirectly cause the Acquired Corporations to transfer or set aside any assets to fund any benefits under any Employee Plan, (iv) otherwise give rise to any liability under any Employee Plan, (v) restrict the right to amend or terminate any Employee Plan, or (vi) result in any payment or benefit that could be nondeductible pursuant to Section 280G of the Code.

3.17 Environmental Matters. Except for those matters that would not reasonably be expected to have a Material Adverse Effect, (a) the Acquired Corporations are, and since January 1, 2016 have been, in compliance with all applicable Environmental Laws, which compliance includes obtaining, maintaining or complying with all Governmental Authorizations required under Environmental Laws for the operation of their respective business, (b) as of the date hereof, there is no investigation, suit, claim, action or Legal Proceeding relating to or arising under any Environmental Law that is pending or, to the Knowledge of the Company, threatened in writing against an Acquired Corporation or any Leased Real Property, (c) as of the date hereof, the Acquired Corporations have not received any written notice, report or other information of or entered into any legally-binding agreement, order, settlement, judgment, injunction or decree involving uncompleted, outstanding or unresolved violations, liabilities or requirements on the part of the respective Acquired Corporations relating to or arising under Environmental Laws, (d) to the Knowledge of the Company, no Person has been exposed to any Hazardous Materials at a property or facility of an Acquired Corporation at levels in excess of applicable permissible exposure levels, (e) to the Knowledge of the Company, there are and have been no Hazardous Materials present or Released on, at, under or from any property or facility, including the Leased Real Property, in both cases in a manner and concentration that would reasonably be expected to result in any claim against or liability of an Acquired Corporation under any Environmental Law, and (f) no Acquired Corporation has assumed, undertaken, or otherwise become subject to any liability of another Person relating to Environmental Laws other than any indemnities in Material Contracts or leases for real property.

3.18 Insurance. The Company has delivered or made available to Parent or Parent’s Representatives an accurate and complete copy of all material insurance policies and all material self-insurance programs and arrangements relating to the business, assets and operations of the Acquired Corporations. Except as would not reasonably be expected to have a Material Adverse Effect, all such insurance policies are in full force and effect, no notice of cancellation or modification has been received, and there is no existing default or event which, with the giving of notice or lapse of time or both, would constitute a default by any insured thereunder. As of the date of this Agreement, there is no material claim pending under any of the Acquired Corporations’ insurance policies as to which coverage has been denied or disputed by the underwriter of such policies.

 

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3.19 Legal Proceedings; Orders.

(a) There is no Legal Proceeding pending and served (or, to the Knowledge of the Company, pending and not served or threatened) against an Acquired Corporation or to the Knowledge of the Company, against any present or former officer, director or employee of an Acquired Corporation in such individual’s capacity as such, other than any Legal Proceedings that has not had and would not reasonably be expected to have a Material Adverse Effect.

(b) There is no Order to which an Acquired Corporation is subject that has had or would be reasonably likely to have a Material Adverse Effect.

(c) To the Company’s Knowledge, no investigation or review by any Governmental Body with respect to an Acquired Corporation is pending or is being threatened, other than any investigations or reviews that have not had and would not reasonably be expected to have a Material Adverse Effect.

3.20 Authority; Binding Nature of Agreement. The Company has the corporate power and authority, and taken all corporate action necessary, to enter into and deliver and to perform its obligations under this Agreement and to consummate the Transactions. The Company Board (at a meeting duly called and held) has unanimously (a) determined that this Agreement and the Transactions, including the Offer and the Merger, are advisable and fair to, and in the best interest of, the Company and its stockholders, (b) approved the execution, delivery and performance by the Company of this Agreement and the consummation of the Transactions, including the Offer and the Merger, (c) agreed that the Agreement shall be subject to Section 251(h) of the DGCL and (d) resolved to recommend that the stockholders of the Company accept the Offer and tender their shares to Parent pursuant to the Offer, which resolutions have not been subsequently withdrawn or modified in a manner adverse to Parent (unless the Company Board makes a Company Adverse Change Recommendation after the date hereof in accordance with Section 6.1(b)). This Agreement has been duly executed and delivered by the Company, and assuming due authorization, execution and delivery by Parent and Purchaser, this Agreement constitutes the legal, valid and binding obligations of the Company and is enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

3.21 Section 203 of the DGCL. Assuming the accuracy of the representations and warranties set forth in Section 4.8, the Company Board has taken all actions so that the restrictions applicable to business combinations contained in Section 203 of the DGCL and any other Takeover Law shall be inapplicable to the execution, delivery and performance of this Agreement and to the consummation of the Offer, the Merger and the other Transactions.

3.22 Merger Approval. Following the Offer Acceptance Time, assuming satisfaction of the Minimum Condition, no vote of the holders of any class or series of the Company’s capital stock will be required in order to adopt this Agreement and the Merger.

3.23 Non-Contravention; Consents. Assuming compliance with the applicable provisions of the DGCL, the HSR Act, and the rules and regulations of Nasdaq, the execution and delivery of this Agreement by

 

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the Company and the consummation by the Company of the Transactions will not: (a) cause a violation of any of the provisions of the Certificate of Incorporation or bylaws (or similar organizational documents) of any Acquired Corporation; (b) cause a violation by the Acquired Corporations of any Legal Requirement or order applicable to the Acquired Corporations, or to which the Acquired Corporations are subject; or (c) conflict with, result in breach of, or constitute a default under, any Material Contract or Company Lease. Except as may be required by the Exchange Act, the DGCL, the HSR Act, and the rules and regulations of Nasdaq, the Acquired Corporations are not required to give notice to, make any filing with, or obtain any Consent from any Person at any time prior to the Closing in connection with the execution and delivery of this Agreement, or the consummation by the Company of the Merger.

3.24 Opinion of Financial Advisor. The Company Board (in such capacity) has received the oral opinion of Lazard Frères & Co. LLC, the financial advisor to the Company, dated on or prior to the date of this Agreement, to the effect that, as of the date hereof and subject to the limitations, qualifications, assumptions and conditions set forth therein, the Offer Price in cash to be paid to the holders of Company Common Stock (other than Parent, Purchaser or any of their respective Affiliates) in connection with the Offer and the Merger is fair from a financial point of view to such holders. It is agreed and understood that such opinion is for the benefit of the Company Board (in its capacity as such) and may not be relied upon by Parent or Purchaser. The Company shall deliver or make available to Parent solely for informational purposes an executed copy of the opinion as soon as practicable following the date of this Agreement.

3.25 Financial Advisors. Except for Lazard Frères & Co. LLC, no broker, finder, investment banker, financial advisor or other Person is entitled to any brokerage, finder’s or other similar fee or commission, or the reimbursement of expenses in connection therewith, in connection with the Transactions based upon arrangements made by or on behalf of the Company. The Company has furnished to Parent a true and complete copy of any contract between the Company and Lazard Frères & Co. LLC pursuant to which Lazard Frères & Co. LLC would be entitled to any payment from the Company relating to the Transaction.

3.26 Affiliate Transactions. No director or executive officer (as such term is defined in the Exchange Act) of the Company, and no Person known by the Company to currently own five percent or more of the Shares, is a party to any Contract with or binding upon the Company or any of their respective properties or assets or has any interest in any property owned by the Company or has engaged in any transaction with any of the foregoing since January 1, 2017, in each case, that is of a type that would be required to be disclosed under Item 404 of Regulation S-K under the Securities Act that is not disclosed in the Company SEC Documents.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER

Parent and Purchaser represent and warrant to the Company as follows:

4.1 Due Organization. Each of Parent and Purchaser is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all necessary power and authority:

 

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(a) to conduct its business in the manner in which its business is currently being conducted; (b) to own and use its assets in the manner in which its assets are currently owned and used; and (c) to perform its obligations under all Contracts by which it is bound, except where any such failure would not reasonably be expected to have a Parent Material Adverse Effect. Parent has either delivered or made available to Company or Company’s Representatives accurate and complete copies of the certificate of incorporation, bylaws and other charter and organizational documents of Parent and Purchaser, including all amendments thereto.

4.2 Purchaser. Purchaser was formed solely for the purpose of engaging in the Transactions and activities incidental thereto and has not engaged in any business activities or conducted any operations other than in connection with the Transactions and those incident to its formation. Either Parent or a wholly owned subsidiary of Parent owns beneficially and of record all of the outstanding capital stock of Purchaser.

4.3 Authority; Binding Nature of Agreement. Parent and Purchaser have the corporate power and authority to execute and deliver and perform their obligations under this Agreement; and the execution, delivery and performance by Parent and Purchaser of this Agreement have been duly authorized by all necessary action on the part of Parent and Purchaser and their respective boards of directors. This Agreement constitutes the legal, valid and binding obligation of Parent and Purchaser, and assuming due authorization, execution and delivery by the Company, is enforceable against them in accordance with its terms, subject to (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors and (b) rules of law governing specific performance, injunctive relief and other equitable remedies.

4.4 Non-Contravention; Consents. Assuming compliance with the applicable provisions of the HSR Act, the execution and delivery of this Agreement by Parent and Purchaser, and the consummation of the Transactions, will not: (a) cause a violation of any of the provisions of the certificate of incorporation or bylaws or other organizational documents of Parent or Purchaser; (b) cause a violation by Parent or Purchaser of any Legal Requirement or order applicable to Parent or Purchaser, or to which they are subject; or (c) conflict with, result in a breach of, or constitute a default on the part of Parent or Purchaser under any Contract, except, in the case of clauses “(b)” and “(c)”, for such conflicts, violations, breaches or defaults as would not reasonably be expected to have a Parent Material Adverse Effect. Except as may be required by the Exchange Act (including the filing with the SEC of the Offer Documents), state takeover laws, the DGCL or the HSR Act, neither Parent nor Purchaser, nor any of Parent’s other Affiliates, is required to make any filing with or give any notice to, or to obtain any Consent from, any Person at or prior to the Closing in connection with the execution and delivery of this Agreement by Parent or Purchaser or the consummation by Parent or Purchaser of the Offer, the Merger or the other Transactions, other than such filings, notifications, approvals, notices or Consents that, if not obtained, made or given, would not reasonably be expected to have a Parent Material Adverse Effect. No vote of Parent’s stockholders is necessary to approve this Agreement or any of the Transactions.

4.5 Disclosure. None of the Offer Documents will 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 the circumstances under which they were made, not misleading. None of the information with respect to Parent or Purchaser supplied or to be supplied by or on behalf of Parent or Purchaser or any of their

 

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Subsidiaries specifically for inclusion or incorporation by reference in the Schedule 14D-9 will, at the time such document is filed with the SEC, at any time such document is amended or supplemented or at the time such document is first published, sent or given to the Company’s stockholders, 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 the circumstances under which they were made, not misleading. Notwithstanding the foregoing, neither Parent nor Purchaser makes any representation with respect to any statement made or incorporated by reference therein based on information supplied by or on behalf of the Company for inclusion or incorporation in the Offer Documents.

4.6 Absence of Litigation. There is no Legal Proceeding pending and served or, to the Knowledge of Parent, pending and not served against Parent or Purchaser, except as would not and would not reasonably be expected to materially and adversely affect Parent’s or Purchaser’s ability to consummate the Transactions.

4.7 Funds. Parent has and will have at all times until the Closing cash resources in immediately available funds and in an amount sufficient to consummate the Transactions.

4.8 Ownership of Company Common Stock. Neither Parent nor any of Parent’s Affiliates (including Parent’s ultimate parent) directly or indirectly owns, and at all times for the past three (3) years, neither Parent nor any of Parent’s controlled Affiliates or ultimate parent has owned, beneficially or of record, any shares of the Company’s capital stock or any securities, Contracts or obligations convertible into or exercisable or exchangeable for shares of the Company’s capital stock. Neither Parent nor Purchaser has enacted or will enact a plan that complies with Rule 10b5-1 under the Exchange Act covering the purchase of any of the shares of the Company’s capital stock. As of the date hereof, neither Parent nor Purchaser is an “interested stockholder” of the Company under Section 203(c) of the DGCL.

4.9 Acknowledgement by Parent and Purchaser. Parent and Purchaser acknowledge and agree that the Company has not made any representations or warranties regarding the subject matter of this Agreement, express or implied, except for the representations and warranties in this Agreement, including the Company Disclosure Schedule. Such representations and warranties by the Company constitute the sole and exclusive representations and warranties of the Company in connection with the Transactions and each of Parent and Purchaser understands, acknowledges and agrees that all other representations and warranties of any kind or nature whether express, implied or statutory are specifically disclaimed by the Company, including with respect to estimates, projections, forecasts and other forward-looking information, as well as certain business plan information, regarding the Company and its business and operations. Parent and Purchaser hereby acknowledge that there are uncertainties inherent in attempting to make such estimates, projections, forecasts and other forward-looking statements, as well as in such business plans, and that Parent and Purchaser will have no claim against the Acquired Corporations, or any of their Affiliates, stockholders or Representatives, or any other person with respect thereto unless any such information is expressly addressed or included in a representation or warranty contained in this Agreement. Accordingly, Parent and Purchaser hereby acknowledge and agree that none of the Acquired Corporations or any of their Affiliates, stockholders or Representatives, nor any other

 

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person, has made or is making any express or implied representation or warranty with respect to such estimates, projections, forecasts, forward-looking statements or business plans unless any such information is expressly addressed or included in a representation or warranty contained in this Agreement.

4.10 Brokers and Other Advisors. No broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Transactions based upon arrangements made by or on behalf of Parent or any of its Subsidiaries except for Persons, if any, whose fees and expenses shall be paid by Parent.

SECTION 5. CERTAIN COVENANTS OF THE COMPANY

5.1 Access and Investigation. During the period from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Section 8.1 (the “Pre-Closing Period”), upon reasonable advance notice to the Company, the Acquired Corporations shall, and shall cause the respective Representatives of the Acquired Corporations to: (a) provide Parent and Parent’s Representatives with reasonable access during normal business hours of the Company to the Company’s Representatives, personnel, and assets and to all existing books, records, Tax Returns, work papers and other documents and information relating to the Acquired Corporations; and (b) promptly provide Parent and Parent’s Representatives with all reasonably requested information regarding the business of the Acquired Corporations, including copies of the existing books, records, databases (to the extent transferable), reports, Tax Returns, work papers and other documents and information relating to the Acquired Corporations, and with such additional financial, operating and other data and information regarding the Acquired Corporations, as Parent may reasonably request; provided, however, that any such access shall be conducted at a reasonable time, under the supervision of appropriate personnel of the Acquired Corporations and in such a manner as not to unreasonably interfere with the normal operation of the business of the Acquired Corporations or create material risk of damage or destruction to any material assets or property. Nothing herein shall require the Acquired Corporations to disclose any information to Parent if such disclosure would (i) jeopardize any attorney-client or other legal privilege (so long as the Acquired Corporations have reasonably cooperated with Parent to permit such inspection of or to disclose such information on a basis that does not waive such privilege with respect thereto) or (ii) contravene any applicable Legal Requirement, fiduciary duty or binding confidentiality agreement entered into by the Company prior to the date of this Agreement (so long as the Acquired Corporations have reasonably cooperated with Parent to permit the inspection, or to disclose such information, on a basis that does not contravene any applicable Legal Requirement, fiduciary duty or confidentiality agreement); provided, further, that information shall be disclosed subject to execution of a joint defense agreement in customary form, and disclosure may be limited to external counsel for Parent, to the extent the Acquired Corporations determine doing so is reasonably required for the purpose of complying with applicable Antitrust Laws. With respect to the information disclosed pursuant to this Section 5.1, Parent shall comply with, and shall instruct Parent’s Representatives to comply with, all of its obligations under the Confidentiality Agreement dated December 4, 2018, between the Company and Parent (the “Confidentiality Agreement”). All requests for information made pursuant to this Section 5.1 shall be directed to the executive officer or other Person designated by the Company.

 

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5.2 Operation of the Acquired Corporations Business.

(a) During the Pre-Closing Period: (i) except (A) as expressly required under this Agreement or as expressly required by applicable Legal Requirements, (B) with the written consent of Parent, which consent shall not be unreasonably withheld, delayed or conditioned or (C) as set forth in Part 5.2 of the Company Disclosure Schedule, the Company shall ensure that each Acquired Corporation conducts in all material respects its business and operations in the ordinary course and (ii) the Company shall promptly notify Parent of (A) any written notice from any Person alleging that the Consent of such Person is or may be required in connection with any of the Transactions and (B) any Legal Proceeding commenced, or, to its knowledge threatened, relating to or involving any Acquired Corporation that relates to the Transactions. The Company shall, acting in the ordinary course of business, use commercially reasonable efforts to preserve intact the material components of the Company’s current business organization, including keeping available the services of current officers and key employees, and use commercially reasonable efforts to maintain their respective relations and good will with all material suppliers, material customers, Governmental Bodies and other material business relations; provided, however, that the Company shall be under no obligation to put in place any new retention programs or include additional personnel in existing retention programs.

(b) During the Pre-Closing Period, except as expressly required under this Agreement or as expressly required by applicable Legal Requirements, with the written consent of Parent, which consent shall not (other than with respect to the actions contemplated by subsections (i), (ii), (iii), (vi), (vii), (xvi) or (xvii)) be unreasonably withheld, delayed or conditioned, or as set forth in Part 5.2(b) of the Company Disclosure Schedule, no Acquired Corporation shall:

(i) (A) establish a record date for, declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares of its capital stock (including the Shares), except for dividends or other distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent or (B) repurchase, redeem or otherwise reacquire any of its shares of capital stock (including any Shares), or any rights, warrants or options to acquire any shares of its capital stock, other than: (1) repurchases or reacquisitions in the ordinary course of business and at fair market value of Shares outstanding as of the date hereof pursuant to the Company’s right (under written commitments in effect as of the date hereof that have been made available to Parent) to purchase or reacquire shares of Company Common Stock held by a Company Associate only upon termination of such associate’s employment or engagement by the Company; or (2) in connection with withholding to satisfy the exercise price and/or Tax obligations with respect to Company Options;

(ii) split, combine, subdivide or reclassify any shares of its capital stock (including the Shares) or other equity interests;

(iii) sell, issue, grant, deliver, pledge, transfer, encumber or authorize the issuance, sale, delivery, pledge, transfer, encumbrance or grant by any Acquired Corporation (other than pursuant to agreements in effect as of the date of this Agreement) of (A) any capital stock, equity interest or other security of the Acquired Corporation, (B) any option, call, warrant, restricted securities or right to acquire any capital stock, equity interest or other security of the Acquired Corporation or (C) any instrument convertible into or exchangeable for

 

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any capital stock, equity interest or other security of the Acquired Corporation (except that the Company may issue Shares as required to be issued upon the exercise of Company Options outstanding as of the date of this Agreement, and the Company may issue Shares to employees pursuant to the terms of the ESPP and current offering thereunder, in each case in accordance with their respective terms as of the date of this Agreement;

(iv) establish, adopt, terminate or amend any Employee Plan (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the date hereof), or amend or waive any of its rights under, or accelerate the vesting, payment or lapse of restrictions under, any provision of any of the Employee Plans (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the date hereof) or grant any employee or director any increase in compensation, bonuses or severance, retention or other payments or benefits;

(v) (A) enter into or amend (1) any change-of-control agreement with any officer, employee, director or independent contractor or (2) any retention agreement with any officer, employee or director, (B) enter into or amend (1) any Employee Plan (or any plan, program, arrangement, practice or agreement that would be an Employee Plan if it were in existence on the date hereof), (2) any employment, severance or other material agreement with any officer or director or (3) any consulting agreement with any independent contractor with an annual base compensation greater than $100,000 or (C) hire any employee with an annual base salary in excess of $100,000;

(vi) amend or permit the adoption of any amendment to its Certificate of Incorporation or bylaws or other charter or organizational documents;

(vii) form any Subsidiary, acquire any equity interest in any other Entity or enter into any joint venture, partnership, limited liability corporation or similar arrangement;

(viii) make or authorize any capital expenditure;

(ix) acquire, lease, license, sublicense, pledge, sell or otherwise dispose of, divest or spin-off, abandon, waive, relinquish or permit to lapse (other than any patent expiring at the end of its statutory term), transfer, assign, guarantee, exchange or swap, mortgage or otherwise encumber (including pursuant to a sale-leaseback transaction or securitization) or subject to any Encumbrance (other than Permitted Encumbrances) any material right or other material asset or property, except pursuant to dispositions of obsolete, surplus or worn out assets that are no longer useful in the conduct of the business of the Acquired Corporations;

(x) except for intercompany loans and capital contributions, lend money or make capital contributions or advances to or make investments in, any Person, or incur or guarantee any Indebtedness (except for advances to employees and consultants for travel and other business related expenses in the ordinary course of business);

(xi) amend or modify in any material respect (other than renewals in the ordinary course of business), waive any rights under, terminate (other than non-renewals of Contracts in the ordinary course of business), replace or release, settle or compromise any material claim, liability or obligation under any Material

 

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Contract or Company Lease or enter into any Contract which if entered into prior to the date hereof would have been a Material Contract or Company Lease, or agree to any requests to add additional, or substitute any, targets under, or otherwise modify the targets or programs that are the subject of, any of its collaboration or license agreements, except that the Company may, following prior written notice to Parent, comply with the existing terms of any collaboration or license agreement;

(xii) (A) make, change or revoke any material Tax election, (B) adopt or change any accounting method in respect of Taxes, (C) amend any Tax Return, (D) file any Tax Return other than as consistent with past practice or as required by Legal Requirements, (E) enter into a closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. Legal Requirements), (F) settle any claim or assessment in respect of Taxes, or (G) consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;

(xiii) commence any Legal Proceeding, except with respect to: (A) routine matters in the ordinary course of business; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Legal Proceedings prior to commencement thereof); or (C) in connection with a breach of this Agreement or any other agreements contemplated hereby;

(xiv) settle, release, waive or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than any Legal Proceeding relating to a breach of this Agreement or any other agreements contemplated hereby or pursuant to a settlement that does not relate to any of the Transactions and (A) that results solely in a monetary obligation involving only the payment of monies by the Acquired Corporations of not more than $50,000 in the aggregate; (B) that results solely in a monetary obligation that is funded by an indemnity obligation to, or an insurance policy of, any Acquired Corporation and the payment of monies by the Acquired Corporations that together with any settlement made under subsection “(A)” are not more than $50,000 in the aggregate (not funded by an indemnity obligation or through insurance policies); or (C) that results in no monetary obligation of any Acquired Corporation or the Acquired Corporation’s receipt of payment;

(xv) enter into any collective bargaining agreement or other agreement with any labor organization (except to the extent required by applicable Legal Requirements);

(xvi) adopt or implement any stockholder rights plan or similar arrangement;

(xvii) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Acquired Corporations; or

(xviii) authorize any of, or agree or commit to take, any of the actions described in clauses “(i)” through “(xvii)” of this Section 5.2(b).

 

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Nothing contained herein shall give to Parent or Purchaser, directly or indirectly, rights to control or direct the operations of the Acquired Corporations prior to the Effective Time and nothing contained in this Agreement is intended to give the Acquired Corporations, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its and its Subsidiaries’ respective operations.

5.3 No Solicitation.

(a) For the purposes of this Agreement, “Acceptable Confidentiality Agreement” shall mean any customary confidentiality agreement that (i) contains provisions (other than standstill provisions) that are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement and (ii) does not prohibit the Company from providing any information to Parent in accordance with this Agreement or otherwise prohibit the Company from complying with its obligations under this Agreement.

(b) Except as permitted by this Section 5.3, the Acquired Corporations shall and shall direct their Representatives to immediately cease any solicitation, encouragement, discussions or negotiations with any Persons that may be ongoing with respect to an Acquisition Proposal and the Acquired Corporations shall not and shall direct their Representatives not to (i) continue any solicitation, knowing encouragement, discussions or negotiations with any Persons that may be ongoing with respect to an Acquisition Proposal and (ii) directly or indirectly, (A) solicit, initiate or knowingly facilitate or knowingly encourage (including by way of furnishing information) any inquiries regarding, or the making of any proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (B) engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other Person any information in connection with or for the purpose of knowingly soliciting, encouraging or facilitating, an Acquisition Proposal or any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal or (C) enter into any letter of intent, acquisition agreement, agreement in principle or similar agreement with respect to an Acquisition Proposal or any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal. On the date hereof, the Company shall, and shall cause the other Acquired Corporations to, terminate access by any third Person who has made or would reasonably be expected to make an Acquisition Proposal (other than Parent and its Representatives) to any data room (virtual or actual) containing any confidential information of any Acquired Corporation. As soon as reasonably practicable after the date of this Agreement (and in any event within three (3) Business Days hereof), the Company shall deliver a written notice to each Person that entered into a confidentiality agreement in anticipation of potentially making an Acquisition Proposal within the last six (6) months, to the effect that the Company is ending all discussions and negotiations with such Person with respect to any Acquisition Proposal, effective on the date thereof, and the notice shall also request such Person to promptly return or destroy all confidential information concerning the Acquired Corporations.

(c) If at any time on or after the date of this Agreement and prior to the Offer Acceptance Time an Acquired Corporation or any of its Representatives receives an unsolicited written Acquisition Proposal from any Person or group of Persons, which Acquisition Proposal was made on or after the date of this Agreement and did

 

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not result from any breach of this Section 5.3, (i) the Company and its Representatives may contact such Person or group of Persons solely to clarify the terms and conditions thereof and inform such Person or group of Persons of the terms of this Section 5.3 and (ii) if the Company Board determines in good faith, (A) after consultation with financial advisors and outside legal counsel, that such Acquisition Proposal constitutes or would reasonably be expected to lead to a Superior Offer and (B) after consultation with the Company’s outside legal counsel, that the failure to take such action described in clauses (x) and (y) of this Section 5.3(c) would be inconsistent with the fiduciary duties of the Company Board to the Company’s stockholders under applicable Legal Requirements, then the Company and its Representatives may (x) furnish, pursuant to (but only pursuant to) an Acceptable Confidentiality Agreement, information (including non-public information) with respect to the Acquired Corporations to the Person or group of Persons who has made such Acquisition Proposal; provided that the Company shall concurrently provide to Parent any information concerning the Acquired Corporations that is provided to any Person given such access which was not previously provided to Parent or its Representatives and (y) engage in or otherwise participate in discussions or negotiations with the Person or group of Persons making such Acquisition Proposal. The Company shall provide Parent with an accurate and complete copy of any Acceptable Confidentiality Agreement entered into as contemplated by this Section 5.3 promptly (and in any event within 24 hours) of the execution thereof.

(d) The Company shall (i) promptly (and in any event within 24 hours) notify Parent if any inquiries, proposals or offers with respect to, or that would reasonably be expected to lead to, an Acquisition Proposal, in each case, that are received by an Acquired Corporation or any of its Representatives, including the identity of the Person or group of Persons making such inquiry, (ii) provide to Parent a summary and copies of the material terms and conditions of any Acquisition Proposal, (iii) keep Parent reasonably informed of any material developments, discussions or negotiations (including any amendments or proposed amendments to any material terms or conditions) regarding any Acquisition Proposal on a reasonably prompt basis, and (iv) upon the request of Parent, reasonably inform Parent of the status of such Acquisition Proposal.

(e) Nothing in this Section 5.3 or elsewhere in this Agreement shall prohibit the Company from (i) taking and disclosing to the stockholders of the Company a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act, (ii) making any disclosure to the stockholders of the Company that is required by applicable Legal Requirements or (iii) making any “stop, look and listen” communication pursuant to Rule 14d-9(f) promulgated under the Exchange Act; provided, that this Section 5.3(e) shall not be deemed to permit the Company Board to make a Company Adverse Change Recommendation except to the extent permitted by Section 6.1(b).

(f) The Company agrees that in the event any Representative of an Acquired Corporation takes any action that, if taken by the Company, would constitute a breach of this Section 5.3, the Company shall be deemed to be in breach of this Section 5.3.

 

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SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES

6.1 Company Board Recommendation.

(a) The Company hereby consents to the Offer and represents that the Company Board, at a meeting duly called and held, has made the Company Board Recommendation. Subject to Section 6.1(b), the Company hereby consents to the inclusion of a description of the Company Board Recommendation in the Offer Documents. During the Pre-Closing Period, neither the Company Board nor any committee thereof shall (i): (A) withdraw or withhold (or modify or qualify in a manner adverse to Parent or Purchaser), or publicly propose to withdraw or withhold (or modify or qualify in a manner adverse to Parent or Purchaser), the Company Board Recommendation, (B) adopt, approve, recommend or declare advisable, or publicly propose to adopt, approve, recommend or declare advisable, any Acquisition Proposal or (C) resolve, agree or publicly propose to take any such actions (any action described in this clause (i) being referred to as a “Company Adverse Change Recommendation”) or (ii) adopt, approve, recommend or declare advisable, or propose to adopt, approve, recommend or declare advisable, or allow the Company to execute or enter into any Contract (x) with respect to, or that is intended to or would reasonably be expected to lead to, any Acquisition Proposal, or (y) requiring, or reasonably expected to cause, the Company to abandon, terminate, delay or fail to consummate, or that would otherwise materially impede, interfere with or be inconsistent with, the Transactions (other than an Acceptable Confidentiality Agreement entered into in accordance with Section 5.3).

(b) Notwithstanding anything to the contrary in Section 6.1(a), at any time prior to accepting for payment such number of Shares validly tendered and not properly withdrawn pursuant to the Offer as satisfies the Minimum Condition (the “Offer Acceptance Time”):

(i) if the Company has received a written bona fide Acquisition Proposal (which Acquisition Proposal did not arise out of a breach of Section 5.3) from any Person that has not been withdrawn and after consultation with outside legal counsel, the Company Board shall have determined, in good faith, that such Acquisition Proposal is a Superior Offer, (x) the Company Board may make a Company Adverse Change Recommendation or (y) the Company may terminate this Agreement to enter into a Specified Agreement with respect to such Superior Offer in accordance with Section 8.1(f), in each case, if and only if: (A) the Company Board determines in good faith, after consultation with the Company’s outside legal counsel, that the failure to do so would be inconsistent with the fiduciary duties of the Company Board to the Company’s stockholders under applicable Legal Requirements; (B) the Company shall have given Parent prior written notice of its intention to consider making a Company Adverse Change Recommendation or terminate this Agreement pursuant to Section 8.1(f) at least four (4) Business Days prior to making any such Company Adverse Change Recommendation or termination (a “Determination Notice”) (which notice shall not constitute a Company Adverse Change Recommendation); and (C) (1) the Company shall have provided to Parent a summary of the material terms and conditions of the Acquisition Proposal and all other material information contemplated to be provided in accordance with Section 5.3(d), (2) the Company shall have given Parent the four (4) Business Days after Parent’s receipt of the Determination Notice to propose revisions to the terms of this Agreement or make another proposal and shall have negotiated in good faith with Parent and its Representatives (to the extent Parent desires to negotiate) with respect to such proposed revisions or other proposal, if any, and (3) after considering

 

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the results of any such negotiations and giving effect to the proposals made by Parent, if any, (x) after consultation with the Company’s financial advisor and outside legal counsel, the Company Board shall have determined, in good faith, that such Acquisition Proposal is a Superior Offer and (y) after consultation with the Company’s outside legal counsel, that the failure to make the Company Adverse Change Recommendation or terminate this Agreement pursuant to Section 8.1(f) would be inconsistent with the fiduciary duties of the Company Board to the Company’s stockholders under applicable Legal Requirements. Issuance of any “stop, look and listen” communication by or on behalf of the Company pursuant to Rule 14d-9(f) shall not be considered a Company Adverse Change Recommendation and shall not require the giving of a Determination Notice or compliance with the procedures set forth in this Section 6.1. For the avoidance of doubt, the provisions of this Section 6.1(b)(i) shall also apply to any material amendment to any Acquisition Proposal, each of which will require a new Determination Notice, except that for purposes of such subsequent Determination Notice, the references to four (4) Business Days shall be deemed to be two (2) Business Days; and

(ii) other than in connection with an Acquisition Proposal, the Company Board may make a Company Adverse Change Recommendation in response to a Change in Circumstance, if and only if: (A) the Company Board determines in good faith, after consultation with the Company’s outside legal counsel, that the failure to do so would be inconsistent with the fiduciary duties of the Company Board to the Company’s stockholders under applicable Legal Requirements; (B) the Company shall have given Parent a Determination Notice at least four (4) Business Days prior to making any such Company Adverse Change Recommendation; and (C) (1) the Company shall have specified the Change in Circumstance in reasonable detail, (2) the Company shall have given Parent the four (4) Business Days after the Determination Notice to propose revisions to the terms of this Agreement or make another proposal, and shall have negotiated in good faith with Parent and its Representatives (to the extent Parent desires to do so) with respect to such proposed revisions or other proposal, if any, and (3) after considering the results of any such negotiations and giving effect to the proposals made by Parent, if any, after consultation with outside legal counsel, the Company Board shall have determined, in good faith, that the failure to make the Company Adverse Change Recommendation in response to such Change in Circumstance would be inconsistent with the fiduciary duties of the Company Board to the Company’s stockholders under applicable Legal Requirements. For the avoidance of doubt, the provisions of this Section 6.1(b)(ii) shall also apply to any material change to the facts and circumstances relating to such Change in Circumstance and require a new Determination Notice, except that for purposes of such subsequent Determination Notice, the references to four (4) Business Days shall be deemed to be two (2) Business Days.

6.2 Filings, Consents and Approvals.

(a) Subject to the terms and conditions set forth in this Agreement, each of the Parties shall use their respective reasonable best efforts to take, or cause to be taken, all actions, to file, or cause to be filed, all documents and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable Legal Requirements (including applicable Antitrust Laws) or otherwise to consummate and make effective the Transactions as soon as reasonably practicable, including (i) obtaining all necessary actions or nonactions, waivers, consents, clearances, decisions, declarations, approvals and, expirations or terminations of waiting periods from Governmental Bodies and the making of all necessary

 

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registrations and filings and the taking of all steps as may be necessary to obtain any such consent, decision, declaration, approval, clearance or waiver, or expiration or termination of a waiting period by or from, or to avoid an action or proceeding by, any Governmental Body in connection with any Antitrust Law; (ii) obtaining all necessary consents, authorizations, approvals or waivers from third parties (including estoppel certificates and consents from landlords); and (iii) the execution and delivery of any additional instruments necessary to consummate the Transactions. Each Party shall use its respective reasonable best efforts to resolve such objections, if any, as may be asserted by any Governmental Body with respect to the Transactions under any applicable Antitrust Laws.

(b) Subject to the terms and conditions of this Agreement, each of the Parties hereto shall (and shall cause their respective Affiliates, if applicable, to): (i) promptly, but in no event later than ten (10) Business Days after the date hereof, make an appropriate filing of all Notification and Report forms as required by the HSR Act with respect to the Transactions; and (ii) cooperate with each other in determining whether, and promptly preparing and making, any other filings or notifications or other consents required to be made with, or obtained from, any other Governmental Bodies in connection with the Transactions.

(c) Without limiting the generality of anything contained in this Section 6.2, during the Pre-Closing Period, each Party hereto shall use its reasonable best efforts to (i) cooperate in all respects and consult with each other in connection with any filing or submission in connection with any investigation or other inquiry, including allowing the other Parties to have a reasonable opportunity to review in advance and comment on drafts of filings and submissions (subject to an appropriate confidentiality agreement to limit disclosure to outside counsel), (ii) give the other Parties prompt notice of the making or commencement of any request, inquiry, investigation, action or Legal Proceeding brought by a Governmental Body or brought by a third party before any Governmental Body, in each case, with respect to the Transactions, (iii) keep the other Parties informed as to the status of any such request, inquiry, investigation, action or Legal Proceeding, (iv) promptly inform the other Parties of any communication to or from the FTC, the DOJ or any other Governmental Body in connection with any such request, inquiry, investigation, action or Legal Proceeding, (v) upon request, promptly furnish to the other Parties, subject to an appropriate confidentiality agreement to limit disclosure to outside counsel and consultants retained by such counsel, with copies of documents provided to or received from any Governmental Body in connection with any such request, inquiry, investigation, action or Legal Proceeding, provided, however that such material may be redacted as necessary to (1) comply with contractual arrangements, (2) address legal privilege or confidentiality concerns, and (3) comply with applicable law, (vi) subject to an appropriate confidentiality agreement to limit disclosure to counsel and outside consultants retained by such counsel, and to the extent reasonably practicable, consult in advance and cooperate with the other Parties and consider in good faith the views of the other Parties in connection with any substantive communication, analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal to be made or submitted in connection with any such request, inquiry, investigation, action or Legal Proceeding, and (vii) except as may be prohibited by any Governmental Body or by any Legal Requirement, in connection with any such request, inquiry, investigation, action or Legal Proceeding in respect of the Transactions, each Party hereto shall provide advance notice of and permit authorized Representatives of the other Party to be present at each telephone or in person meeting or conference relating to such request, inquiry, investigation, action or Legal Proceeding and to have access

 

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to and be consulted in advance in connection with any argument, opinion or proposal to be made or submitted to any Governmental Body in connection with such request, inquiry, investigation, action or Legal Proceeding. Each Party shall supply as promptly as practicable such information, documentation, other material or testimony that may be reasonably requested by any Governmental Body, including by complying at the earliest reasonably practicable date with any reasonable request for additional information, documents or other materials received by any Party or any of their respective Subsidiaries from any Governmental Body in connection with such applications or filings for the transactions contemplated by this Agreement. Notwithstanding anything to the contrary in this Agreement, the Company shall permit Parent to direct the defense and settlement of any claim, suit or cause of action relating to the consents, filings and approvals in this Section 6.2 or the Transactions, and the Company shall not settle or compromise any such claim, suit or cause of action without Parent’s written consent. Purchaser shall pay all filing fees under the HSR Act and for any filings required under foreign Antitrust Laws, but the Company shall bear its own costs for the preparation of any such filings. Neither Party shall commit to or agree with any Governmental Body to stay, toll or extend any applicable waiting period under the HSR Act, or pull and refile under the HSR Act, or other applicable Antitrust Laws, without the prior written consent of the other.

6.3 Company Equity Awards and ESPP.

(a) Prior to the Offer Acceptance Time, the Company shall take all actions (including obtaining any necessary determinations and/or resolutions of the Company Board or a committee thereof) that may be necessary (under the Company Equity Plans and award agreements pursuant to which Company Equity Awards are outstanding or otherwise) to (i) accelerate the vesting and exercisability (as applicable) of each unexercised Company Option and Company RSU Award then outstanding so that each such Company Equity Award shall be fully vested and exercisable (as applicable) effective as of immediately prior to, and contingent upon, the Effective Time in accordance with Section 2.8(a), (ii) terminate each Company Equity Plan (except as otherwise agreed by Parent and a holder thereof) effective as of and contingent upon the Effective Time and (iii) following the vesting acceleration described in sub-clause (i) above, cause, as of the Effective Time, each unexpired and unexercised Company Option and each unexpired Company RSU Award then outstanding as of immediately prior to the Effective Time (and each plan, if any, under which any Company Equity Award may be granted except, with respect to any such plan, as otherwise agreed by Parent and a holder thereof) to be cancelled, terminated and extinguished in exchange for the payment of cash pursuant to Section 2.8.

(b) Prior to the Offer Acceptance Time, the Company shall take all actions necessary or required under the ESPP and Legal Requirements to, contingent on the Effective Time, (i) ensure that no new Offering Period (as defined in the ESPP) shall be authorized or commenced on or after the date of this Agreement and (ii) with respect to each Offering Period in existence under the ESPP on the date of this Agreement, provide that no participant may increase contributions under the ESPP following the date of this Agreement and cause the Business Day prior to the Offer Acceptance Time to be treated as the last day of such Offering Period and the final day of the then-current Purchase Period (as defined in the ESPP) under such Offering Period and use the ESPP participants’ accumulated contributions to purchase shares under the ESPP on such date, and by make such other pro-rata adjustments as may be necessary to reflect the shortened Offering Period and shortened Purchase

 

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Period but otherwise treat such shortened Offering Period and Purchase Period as fully effective and completed for all purposes under the ESPP. The Company shall terminate the ESPP in its entirety, contingent upon the Effective Time. Prior to the Offer Acceptance Time, the Company shall take all actions (including, if appropriate, amending the terms of the ESPP) that the Company determines are reasonably necessary to give effect to the transactions contemplated by this Section 6.3(b).

6.4 Employee Benefits. Through December 31, 2019, Parent shall provide, or cause to be provided, to each employee of the Company who is employed by the Company as of immediately prior to the Effective Time and who continues to be employed by the Surviving Corporation (or any Affiliate thereof) during such one year period (each, a “Continuing Employee”) base salary (or base wages, as the case may be) and annual cash bonus opportunities, each of which is no less favorable than the base salary (or base wages, as the case may be) and annual cash bonus opportunities (which may be provided either under the Company’s annual bonus plan or Parent’s annual bonus plan applicable to similarly-situated non-unionized headquarters employees, as determined by Parent) provided to such Continuing Employee immediately prior to the execution of this Agreement, and employee benefits (excluding equity incentives, long-term incentives, 401(k) plan participation and change in control and retention benefits) that are substantially comparable in the aggregate to either the employee benefits (excluding equity incentives, long-term incentives, 401(k) plan participation and change in control and retention benefits) provided to such Continuing Employee immediately prior to the execution of this Agreement or provided by Parent to its similarly-situated non-unionized headquarters employees. Without limiting the foregoing:

(a) Each Continuing Employee shall be given service credit for all purposes, including for eligibility to participate, benefit levels (including, for the avoidance of doubt, levels of benefits under Parent’s and/or the Surviving Corporation’s vacation policy) and eligibility for vesting under Parent and/or the Surviving Corporation’s employee benefit plans and arrangements with respect to his or her length of service with the Company (and its Subsidiaries and predecessors) prior to the Closing Date that was credited under the corresponding Employee Plan, provided, that the foregoing shall not result in the duplication of benefits or apply for purposes of determining benefit accruals under any pension plan or for purposes of post-employment welfare benefits.

(b) With respect to any accrued but unused personal, sick or vacation time to which any Continuing Employee is entitled pursuant to the personal, sick or vacation policies applicable to such Continuing Employee immediately prior to the Effective Time, Parent shall, or shall cause the Surviving Corporation to and instruct its Affiliates to, as applicable (and without duplication of benefits), assume, as of the Effective Time, the liability for such accrued personal, sick or vacation time and allow such Continuing Employee to use such accrued personal, sick or vacation time in accordance with the practice and policies of the Company.

(c) Parent shall use commercially reasonable efforts to (or, where specifically permitted by such plans, Parent shall) (i) waive all limitations as to pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under health and welfare plans, to the extent that such conditions, exclusions and waiting periods would not apply under a similar Employee Plan in which such employees participated prior to the Effective Time and (ii) ensure that such health or welfare

 

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benefit plan shall, for purposes of determining deductibles, co-payments and out-of-pocket, credit Continuing Employees for deductibles, co-payments and other out-of-pocket amounts paid prior to the Effective Time in the calendar year in which the Closing occurs to the same extent that such amounts paid were recognized prior to the Effective Time under the corresponding health or welfare benefit plan of the Company for such calendar year.

(d) The provisions of this Section 6.4 are solely for the benefit of the Parties to this Agreement, and no provision of this Section 6.4 is intended to, or shall, constitute the establishment or adoption of or an amendment to any employee benefit plan for purposes of ERISA or otherwise and no current or former employee or any other individual associated therewith shall be regarded for any purpose as a third party beneficiary of the Agreement or have the right to enforce the provisions hereof. Nothing herein shall restrict Parent’s or any of its Affiliates’ right to terminate the employment or any Continuing Employee at any time or to change the terms and conditions of any such Continuing Employee’s employment.

6.5 Indemnification of Officers and Directors.

(a) All rights to indemnification, advancement of expenses and exculpation by the Company existing as of the date hereof in favor of those Persons who are directors and officers of the Acquired Corporations as of the date of this Agreement or have been directors and officers of the Acquired Corporations in the past (the “Indemnified Persons”) for their acts and omissions occurring prior to the Effective Time, as provided in the certificate of incorporation and bylaws (or applicable governing documents) of each Acquired Corporation (as in effect as of the date of this Agreement) and as provided in the indemnification agreements between each Acquired Corporation and said Indemnified Persons (as set forth on Part 6.5(a) of the Company Disclosure Schedule and in effect as of the date of this Agreement) in the forms made available by the Company to Parent or Parent’s Representatives prior to the date of this Agreement, shall survive the Merger and shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder of such Indemnified Persons, and shall be observed by the Surviving Corporation and its Subsidiaries to the fullest extent available under Delaware law for a period of six (6) years from the Effective Time, and any claim made pursuant to such rights within such six (6)-year period shall continue to be subject to this Section 6.5(a) and the rights provided under this Section 6.5(a) until disposition of such claim.

(b) From the Effective Time until the sixth anniversary of the date on which the Effective Time occurs, the Surviving Corporation (together with their successors and assigns, the “Indemnifying Parties”) shall, to the fullest extent permitted under applicable Legal Requirements, indemnify and hold harmless each Indemnified Person in his or her capacity as an officer or director of the Acquired Corporations against all losses, claims, damages, liabilities, fees, expenses, judgments or fines incurred by such Indemnified Person as an officer or director of the Acquired Corporations in connection with any pending or threatened Legal Proceeding based on or arising out of, in whole or in part, the fact that such Indemnified Person is or was a director or officer of the Acquired Corporations at or prior to the Effective Time and pertaining to any and all matters pending, existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, including any such matter arising under any claim with respect to the transactions contemplated herein. Without limiting the foregoing, from the Effective Time until the sixth anniversary of the date on which the Effective

 

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Time occurs, the Indemnifying Parties shall also, to the fullest extent permitted under applicable Legal Requirements, advance reasonable and documented out-of-pocket costs and expenses (including reasonable and documented attorneys’ fees) incurred by the Indemnified Persons in connection with matters for which such Indemnified Persons are eligible to be indemnified pursuant to this Section 6.5(b) within 15 days after receipt by Parent of a written request for such advance, subject to the execution by such Indemnified Persons of appropriate undertakings in favor of the Indemnifying Parties to repay such advanced costs and expenses if it is ultimately determined in a final and non-appealable judgment of a court of competent jurisdiction that such Indemnified Person is not entitled to be indemnified under this Section 6.5(b).

(c) (i) From the Effective Time until the sixth anniversary of the Effective Time, the Surviving Corporation shall maintain, and Parent shall cause Surviving Corporation to maintain, in effect, the existing policies of directors’ and officers’ liability insurance maintained by the Acquired Corporations as of the date of this Agreement (accurate and complete copies of which has been made available by the Company to Parent or Parent’s Representatives prior to the date of this Agreement) for the benefit of the Indemnified Persons who are currently covered by such existing policies with respect to their acts and omissions occurring prior to the Effective Time in their capacities as directors and officers of the Acquired Corporations (as applicable), on terms with respect to coverage, deductibles and amounts no less favorable than the existing policies, or (ii) at or prior to the Effective Time, Parent may (and the Acquired Corporations, upon Parent’s written request delivered to the Company not less than ten Business Days prior to the Effective Time, shall) through a nationally recognized insurance broker approved by Parent (such approval not to be unreasonably withheld, delayed or conditioned) purchase a six (6)-year “tail” policy for the director and officer insurance policies of the Acquired Corporations in effect as of the date hereof, with such “tail policy” to be effective as of the Effective Time, and if such “tail policy” has been obtained, it shall be deemed to satisfy all obligations to obtain and/or maintain insurance pursuant to this Section 6.5(c); provided, however, that in no event shall the Surviving Corporation be required to expend in any one (1) year an amount in excess of 300% of the annual premium currently payable by the Acquired Corporations with respect to such current policies, it being understood that if the annual premiums payable for such insurance coverage exceeds such amount, Parent shall be obligated to cause the Surviving Corporation to obtain a policy with the greatest coverage available for a cost equal to such amount; provided, further, however, that the Acquired Corporations’ insurance broker as of the date of this Agreement shall be deemed to be a nationally recognized insurance broker.

(d) In the event Parent or the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or Entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, Parent shall use commercially reasonable efforts to ensure that the successors and assigns of Parent or the Surviving Corporation, as the case may be, or at Parent’s option, Parent, shall assume the obligations set forth in this Section 6.5.

(e) The provisions of this Section 6.5 shall survive the acceptance of Shares for payment pursuant to the Offer and the consummation of the Merger and are (i) intended to be for the benefit of, and shall be enforceable by, each of the Indemnified Persons and their successors, assigns and heirs and (ii) in addition to, and not in substitution for, any other rights to indemnification or contribution that any such Person may have by

 

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contract or otherwise. Unless required by applicable Legal Requirement, this Section 6.5 may not be amended, altered or repealed after the Offer Acceptance Time in such a manner as to adversely affect the rights of any Indemnified Person or any of their successors, assigns or heirs without the prior written consent of the affected Indemnified Person.

6.6 Securityholder Litigation. Until the termination of this Agreement in accordance with Section 8, the Company shall promptly notify Parent of any Legal Proceedings against the Acquired Corporations and/or any of their directors or officers relating to the Transactions. Parent shall have the right to participate in the defense or settlement of any such Legal Proceeding and to review and comment on all material filings or responses to be made by the Company in connection with such Legal Proceedings, and the Company will in good faith take such comments into account, and no settlement, release, waiver or compromise relating to the Transactions shall be agreed to without Parent’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed).

6.7 Additional Agreements. Without limitation or contravention of the provisions of Section 6.2, and subject to the terms and conditions of this Agreement, Parent and the Company shall use commercially reasonable efforts to take, or cause to be taken, all actions necessary to consummate the Offer and the Merger and make effective the other Transactions. Without limiting the generality of the foregoing, subject to the terms and conditions of this Agreement, each Party to this Agreement shall (a) make all filings (if any) and give all notices (if any) required to be made and given by such Party in connection with the Offer and the Merger and the other Transactions, (b) use commercially reasonable efforts to obtain each Consent (if any) required to be obtained pursuant to any applicable Legal Requirement or Material Contract by such Party in connection with the Transactions and (c) use commercially reasonable efforts to lift any restraint, injunction or other legal bar to the Offer or the Merger brought by any third Person against such Party. The Company shall promptly deliver to Parent a copy of each such filing made, each such notice given and each such Consent obtained by the Company during the Pre-Closing Period.

6.8 Disclosure. The initial press release relating to this Agreement shall be a joint press release issued by the Company and Parent and thereafter Parent and the Company shall consult with each other before issuing any further press release(s) or otherwise making any public statement, making any disclosures in any SEC documents, or making any announcement to Company Associates (to the extent not previously issued or made in accordance with this Agreement) with respect to the Offer, the Merger, this Agreement or any of the other Transactions and shall not issue any such press release or make any such public statement, SEC disclosure or announcement to Company Associates without the other Party’s written consent (which shall not be unreasonably withheld, conditioned or delayed). (a) Each Party may, without such consultation or consent, make any public statement in response to questions from the press, analysts, investors or those attending industry conferences, make internal announcements to employees and make disclosures in Company SEC Documents, so long as such statements are consistent with previous press releases, public disclosures or public statements made jointly by the parties (or individually, if approved by the other Party); (b) a Party may, without the prior consent of the other Party hereto but subject to giving advance notice to the other Party, issue any such press release or make any such public announcement or statement as may be required by any Legal Requirement; and (c) the

 

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Company need not consult with Parent in connection with such portion of any press release, public statement or filing to be issued or made pursuant to Section 5.3(e) or with respect to any Acquisition Proposal or Company Adverse Change Recommendation.

6.9 Takeover Laws; Advice of Changes.

(a) If any Takeover Law may become, or may purport to be, applicable to the Transactions, each of Parent and the Company and the members of their respective Boards of Directors shall use their respective reasonable best efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms and conditions contemplated hereby and otherwise act to lawfully eliminate the effect of any Takeover Law on any of the Transactions.

(b) The Company shall give prompt notice to Parent (and shall subsequently keep Parent informed on a current basis of any developments related to such notice) upon its becoming aware of the occurrence or existence of any fact, event or circumstance that (i) has had or would reasonably be expected to result in any Material Adverse Effect with respect to it and (ii) is reasonably likely to result in any of the conditions set forth in Section 7 or Annex I not being able to be satisfied prior to the End Date. Parent shall give prompt notice to the Company (and shall subsequently keep the Company informed on a current basis of any developments related to such notice) upon its becoming aware of the occurrence or existence of any fact, event or circumstance that (i) has had or would reasonably be expected to have a Parent Material Adverse Effect or (ii) is reasonably likely to result in any of the conditions set forth in Section 7 not being able to be satisfied prior to the End Date. For the avoidance of doubt, the delivery of any notice pursuant to this Section 6.9(b) shall not affect or be deemed to modify any representation, warranty, covenant, right, remedy or condition to any obligation hereunder.

6.10 Section 16b-3 Matters. The Company shall take appropriate action to approve, for purposes of Section 16(b) of the Exchange Act, the disposition and cancellation or deemed disposition and cancellation of Shares and Company Options in the Transactions by applicable individuals and to cause such dispositions and/or cancellations to be exempt under Rule 16b-3 promulgated under the Exchange Act.

6.11 Rule 14d-10 Matters. Prior to the Offer Acceptance Time and to the extent permitted by applicable Legal Requirements, the Compensation Committee of the Company Board shall approve, as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(2) under the Exchange Act, each agreement, arrangement or understanding between the Company or any of its Affiliates and any of the officers, directors or employees of the Company that are effective as of the date of this Agreement pursuant to which compensation is paid to such officer, director or employee and shall take all other action reasonably necessary to satisfy the requirements of the non-exclusive safe harbor set forth in Rule 14d-10(d) (2) under the Exchange Act.

6.12 Purchaser Stockholder Consent. Immediately following the execution of this Agreement, Parent shall execute and deliver, in accordance with Section 228 of the DGCL and in its capacity as the sole stockholder of Purchaser, a written consent adopting this Agreement.

 

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6.13 Stock Exchange Delisting; Deregistration. The Surviving Corporation shall cause the Company’s securities to be de-listed from Nasdaq and de-registered under the Exchange Act as promptly as practicable following the Effective Time.

6.14 401(k) Plan. Unless directed otherwise by Parent in writing no less than five business days before the Effective Time, the Company shall take all actions as are necessary to terminate any Employee Plan that is intended to be tax-qualified under Section 401(a) of the Code and includes a cash or deferred arrangement under Section 401(k) of the Code, with such termination effective immediately prior to the Effective Time. The Company shall provide Parent copies of all such corporate actions at least three Business Days before their adoption for Parent’s reasonable review and comment.

6.15 FIRPTA Certificate. At the Closing, the Company shall deliver to Purchaser a copy of a statement that meets the requirements of Treasury Regulations Section 1.897-2(h) and 1.1445-2(c)(3), in substantially the form attached hereto as Exhibit D, issued by the Company and executed not more than thirty (30) days prior to the Closing Date, certifying that the Shares are not U.S. real property interests and that the Company is not, and has not been during the five-year period ending on the Closing Date, a U.S. real property holding corporation within the meaning of Section 897 of the Code.

SECTION 7. CONDITIONS PRECEDENT TO THE MERGER

The obligations of the Parties to effect the Merger are subject to the satisfaction, at or prior to the Closing, of each of the following conditions:

7.1 No Restraints. There shall not have been issued by any court of competent jurisdiction and remain in effect any judgment, temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the Merger, nor shall any Legal Requirement, judgment or order promulgated, entered, enforced, enacted, issued or deemed applicable to the Merger by any Governmental Body which directly or indirectly prohibits, or makes illegal the consummation of the Merger; provided, however, that no Party shall be permitted to invoke this Section 7.1 unless it shall have taken all actions required under this Agreement to have any such order lifted.

7.2 Consummation of Offer. Purchaser (or Parent on Purchaser’s behalf) shall have accepted for payment all of the Shares validly tendered pursuant to the Offer and not validly withdrawn.

SECTION 8. TERMINATION

8.1 Termination. This Agreement may be terminated prior to the Effective Time:

(a) by mutual written consent of Parent and the Company at any time prior to the Offer Acceptance Time;

(b) by either Parent or the Company if the Offer (as may be extended in accordance with this Agreement) shall have expired without the acceptance for payment of Shares pursuant to the Offer; provided,

 

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however, that a Party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(b) if the failure of the acceptance for payment of Shares pursuant to the Offer is primarily caused by a failure on the part of such Party to perform in any material respect any covenant or obligation in this Agreement required to be performed by such Party at or prior to the acceptance for payment of Shares pursuant to the Offer;

(c) by either Parent or the Company if a court of competent jurisdiction or other Governmental Body shall have issued a decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the acceptance for payment of Shares pursuant to the Offer or the Merger or making consummation of the Offer or the Merger illegal, which order, decree, ruling or other action shall be final and nonappealable; provided, however, that a Party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(c) if the issuance of such final and nonappealable order, decree, ruling or other action is primarily caused by a failure on the part of such Party to perform in any material respect any covenant or obligation in this Agreement required to be performed by such Party at or prior to the Effective Time;

(d) by Parent at any time prior to the Offer Acceptance Time, if, whether or not permitted to do so: (i) the Company Board shall have failed to include the Company Board Recommendation in the Schedule 14D-9 when mailed, or shall have effected a Company Adverse Change Recommendation; (ii) the Company Board shall have failed to publicly reaffirm its recommendation of this Agreement within ten (10) Business Days after Parent so requests in writing (or, if earlier, within two (2) Business Days prior to the Expiration Date), provided that, Parent may only make such request once every 30 days if no Acquisition Proposal has been publicly disclosed; or (iii) in the case of a tender offer or exchange offer by a party other than Parent and Purchaser that is subject to Regulation 14D under the Exchange Act, the Company Board fails to reaffirm the Company Board Recommendation and recommend, in a Solicitation/Recommendation Statement on Schedule 14D-9, rejection of such tender offer or exchange offer within ten (10) Business Days of the commencement of such tender offer or exchange offer;

(e) by either Parent or the Company if the Offer Acceptance Time shall not have occurred on or prior to 5:00 p.m. Eastern Time on June 20, 2019 (such date, the “End Date”); provided, however, that a Party shall not be permitted to terminate this Agreement pursuant to this Section 8.1(e) if the failure of the Offer Acceptance Time to occur prior to the End Date is primarily caused by the failure on the part of such Party to perform in any material respect any covenant or obligation in this Agreement required to be performed by such Party;

(f) by the Company, at any time prior to the Offer Acceptance Time, in order to accept a Superior Offer and substantially simultaneously with such termination enter into a binding written definitive acquisition agreement providing for the consummation of a transaction constituting a Superior Offer (a “Specified Agreement”); provided that the Company has complied in all respects with the requirements of Section 5.3 and Section 6.1(b)(i) with respect to such Superior Offer and substantially concurrently with such termination, the Company has paid the Termination Fee to Parent in accordance with Section 8.3;

 

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(g) by Parent at any time prior to the Offer Acceptance Time, if a breach of any representation or warranty contained in this Agreement or failure to perform any covenant or obligation in this Agreement on the part of the Company shall have occurred such that the condition set forth in clause “(b)”, “(c)” or “(e)” of Annex I would not be satisfied and cannot be cured by the Company by the End Date, or if capable of being cured by the End Date, shall not have been cured within 30 days of the date Parent gives the Company written notice of such breach or failure to perform; provided, however, that, Parent shall not have the right to terminate this Agreement pursuant to this Section 8.1(g) if either Parent or Purchaser is then in material breach of any representation, warranty, covenant or obligation hereunder; or

(h) by the Company at any time prior to the Offer Acceptance Time, if a breach of any representation or warranty contained in this Agreement or failure to perform any covenant or obligation in this Agreement on the part of Parent or Purchaser shall have occurred, in each case if such breach or failure has prevented or would reasonably be expected to prevent Parent or Purchaser from consummating the Offer or the Merger when required pursuant to this Agreement and such breach or failure cannot be cured by Parent or Purchaser, as applicable, by the End Date, or if capable of being cured by the End Date, shall not have been cured within 30 days of the date the Company gives Parent written notice of such breach or failure to perform; provided, however, that, the Company shall not have the right to terminate this Agreement pursuant to this Section 8.1(h) if the Company is then in material breach of any representation, warranty, covenant or obligation hereunder.

8.2 Effect of Termination. In the event of the termination of this Agreement as provided in Section 8.1, written notice thereof shall be given to the other Party or Parties, specifying the provision hereof pursuant to which such termination is made, and this Agreement shall be of no further force or effect and there shall be no liability on the part of Parent, Purchaser or the Company or any of their respective directors, officers and Affiliates following any such termination; provided, however, that (a) this Section 8.2, Section 8.3 and Section 9 shall survive the termination of this Agreement and shall remain in full force and effect, (b) the Confidentiality Agreement shall survive the termination of this Agreement and shall remain in full force and effect in accordance with its terms and (c) the termination of this Agreement shall not relieve any Party from any liability for common law fraud or Willful Breach of this Agreement prior to the date of termination. Nothing herein shall limit or prevent any Party from exercising any rights or remedies it may have under Section 9.5(b) in lieu of terminating this Agreement pursuant to Section 8.1.

8.3 Expenses; Termination Fee.

(a) Except as set forth in this Section 8.3, all fees and expenses incurred in connection with this Agreement and the Transactions shall be paid by the Party incurring such expenses, whether or not the Offer and Merger are consummated.

(b) In the event that:

(i) this Agreement is terminated by the Company pursuant to Section 8.1(f);

 

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(ii) this Agreement is terminated by Parent pursuant to Section 8.1(d); or

(iii) (x) this Agreement is terminated pursuant to Section 8.1(b), Section 8.1(e) or Section 8.1(g) (but only if at such time Parent would not be prohibited from terminating this Agreement pursuant to Section 8.1(g)), (y) any Person shall have publicly disclosed a bona fide Acquisition Proposal (or, in the case of Section 8.1(g), any Acquisition Proposal shall been communicated to the Company Board) after the date hereof and prior to such termination and (z) within twelve (12) months of such termination the Company shall have consummated an Acquisition Proposal or entered into a definitive agreement with respect to any Acquisition Proposal that is subsequently consummated (provided that for purposes of this clause (z) the references to “20%” in the definition of “Acquisition Proposal” shall be deemed to be references to “50%”);

then, in any such event under clause “(i)”, “(ii)” or “(iii)” of this Section 8.3(b), the Company shall pay to Parent or its designee the Termination Fee by wire transfer of same day funds (x) in the case of Section 8.3(b)(i), substantially concurrently with such termination, (y) in the case of Section 8.3(b)(ii), within two (2) Business Days after such termination or (z) in the case of Section 8.3(b)(iii), within two (2) Business Days after the consummation of the Acquisition Proposal referred to in subclause (iii)(z) above; it being understood that in no event shall the Company be required to pay the Termination Fee on more than one occasion. As used herein, “Termination Fee” shall mean a cash amount equal to $10,500,000.

(c) Without limiting any remedies of Parent or Purchaser in the case of common law fraud or Willful Breach of this Agreement prior to the date of termination of this Agreement, each of Parent and Purchaser acknowledges and agrees on behalf of itself and its Affiliates that (i) Parent’s right to receive payment from the Company of the Termination Fee pursuant to Section 8.3(b) and any payments pursuant to Section 8.3(d) shall be the sole and exclusive remedy of Parent, Purchaser, and/or any of their respective Affiliates against the Acquired Corporations and any of their respective former, current or future officers, directors, partners, stockholders, optionholders, managers, members or Affiliates (collectively, “Company Related Parties”) for any loss suffered in connection with the termination of this Agreement, the Offer, the Merger and the other transactions contemplated hereby, (ii) the receipt of the Termination Fee shall be deemed to be liquidated damages for any and all losses or damages suffered or incurred by Parent, Purchaser, and/or any of their respective Affiliates and any other Person in connection with the termination of this Agreement, the Offer, the Merger and the other transactions contemplated hereby, and (iii) none of the Company Related Parties shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions; provided, however, that nothing in this Section 8.3(c) shall limit the rights of Parent or Purchaser under Section 9.5(b).

(d) The Parties acknowledge that the agreements contained in this Section 8.3 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, the Parties would not enter into this Agreement; accordingly, if the Company fails to timely pay any amount due pursuant to this Section 8.3, and, in order to obtain the payment, Parent commences a Legal Proceeding which results in a judgment against the Company, the Company shall pay Parent its reasonable and documented costs and expenses (including reasonable and documented attorneys’ fees) in connection with such Legal Proceeding, together with interest on

 

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such amount at the prime rate as published in the Wall Street Journal in effect on the date such payment was required to be made through the date such payment was actually received the date such payment was actually received by Parent or its designee.

SECTION 9. MISCELLANEOUS PROVISIONS

9.1 Amendment. Prior to the Offer Acceptance Time, this Agreement may be amended with the approval of the respective boards of directors of the Company and Parent at any time. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties.

9.2 Waiver. No failure on the part of any Party to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Party in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No Party shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Party; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

9.3 No Survival of Representations and Warranties. None of the representations and warranties contained in this Agreement, the Company Disclosure Schedule or in any certificate or schedule or other document delivered pursuant to this Agreement shall survive the Merger.

9.4 Entire Agreement; Counterparts. This Agreement and the other agreements and schedules referred to herein constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among or between any of the Parties, with respect to the subject matter hereof and thereof; provided, however, that the Confidentiality Agreement shall not be superseded and shall remain in full force and effect; provided, further, that, if the Effective Time occurs, the Confidentiality Agreement shall automatically terminate and be of no further force and effect. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. The exchange of a fully executed Agreement (in counterparts or otherwise) by PDF shall be sufficient to bind the Parties to the terms and conditions of this Agreement.

9.5 Applicable Legal Requirements; Jurisdiction; Specific Performance; Remedies.

(a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Subject to Section 9.5(c), in any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated by this Agreement: (i) each of the Parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the Chancery Court of the State of Delaware and

 

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any state appellate court therefrom or, if such court lacks subject matter jurisdiction, the United States District Court sitting in New Castle County in the State of Delaware (it being agreed that the consents to jurisdiction and venue set forth in this Section 9.5(a) shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the Parties hereto); and (ii) each of the Parties irrevocably consents to service of process by first class certified mail, return receipt requested, postage prepaid, to the address at which such Party is to receive notice in accordance with Section 9.8. The Parties hereto agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Legal Requirements; provided, however, that nothing in the foregoing shall restrict any Party’s rights to seek any post-judgment relief regarding, or any appeal from, such final trial court judgment.

(b) The Parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the Parties hereto do not perform their obligations under the provisions of this Agreement in accordance with its specified terms or otherwise breach such provisions. Subject to the following sentence, the Parties acknowledge and agree that (i) the Parties shall be entitled to an injunction or injunctions, specific performance, or other equitable relief, to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 9.5(a) without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Agreement, (ii) the provisions set forth in Section 8.3: (x) are not intended to and do not adequately compensate for the harm that would result from a breach of this Agreement; and (y) shall not be construed to diminish or otherwise impair in any respect any Party’s right to specific enforcement and (iii) the right of specific performance is an integral part of the transactions contemplated by this Agreement and without that right, neither the Company nor Parent would have entered into this Agreement. Each of the Parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that the other Parties hereto have an adequate remedy at law or an award of specific performance is not an appropriate remedy for any reason at law or equity. The Parties hereto acknowledge and agree that any Party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 9.5(b) shall not be required to provide any bond or other security in connection with any such order or injunction.

(c) EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

9.6 Assignability. This Agreement shall be binding upon, and shall be enforceable by and inure solely to the benefit of, the Parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights hereunder may be assigned without the prior written consent of the other Parties hereto, and any attempted assignment of this Agreement or any of such rights without such consent shall be void and of no effect; provided, further, however, that Parent or Purchaser may assign this Agreement to any of their Affiliates (provided that such assignment shall not impede or delay the consummation of the

 

52.


Transactions); provided that no such assignment or pledge permitted pursuant to this Section 9.6 shall relieve Parent of its obligations hereunder.

9.7 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person (other than the Parties hereto) any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; except for (a) the provisions set forth in Section 6.5 of this Agreement; and (b) the limitations on liability of the Company Related Parties set forth in Section 8.3(c).

9.8 Notices. Any notice or other communication required or permitted to be delivered to any Party under this Agreement shall be in writing and shall be deemed properly delivered, given and received (a) upon receipt when delivered by hand, (b) two (2) Business Days after being sent by registered mail or by courier or express delivery service, (c) if sent by email transmission prior to 6:00 p.m. recipient’s local time, upon transmission when receipt is confirmed or (d) if sent by email transmission after 6:00 p.m. recipient’s local time and receipt is confirmed, the Business Day following the date of transmission; provided that in each case the notice or other communication is sent to the physical address or email address set forth beneath the name of such Party below (or to such other physical address or email address as such Party shall have specified in a written notice given to the other Parties hereto):

if to Parent or Purchaser (or following the Effective Time, the Company):

Merck Sharp & Dohme Corp.

Attn: SVP & Head of Corporate Development

2000 Galloping Hill Road

Kenilworth, NJ 07033

with a copy to (which shall not constitute notice):

Gibson, Dunn & Crutcher LLP

Attn: Barbara L. Becker and Saee M. Muzumdar

200 Park Avenue

New York, NY 10166

Email: bbecker@gibsondunn.com; smuzumdar@gibsondunn.com

if to the Company (prior to the Effective Time):

Immune Design Corp.

Attn: Stephen R. Brady

601 Gateway Boulevard, Suite 1020

South San Francisco, CA 94080

Email: stephen.brady@immunedesign.com

 

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with a copy to (which shall not constitute notice):

Cooley LLP

Attn: Laura Berezin and Jamie Leigh

3175 Hanover Street

Palo Alto, CA 94304

Email: lberezin@cooley.com; jleigh@cooley.com

9.9 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions of this Agreement or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If a final judgment of a court of competent jurisdiction declares that any term or provision of this Agreement is invalid or unenforceable, the Parties hereto agree that the court making such determination shall have the power to limit such term or provision, to delete specific words or phrases or to replace such term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be valid and enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the Parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term or provision.

9.10 Obligation of Parent. Parent shall ensure that Purchaser duly performs, satisfies and discharges on a timely basis each of the covenants, obligations and liabilities applicable to Purchaser under this Agreement, and Parent shall be jointly and severally liable with Purchaser for the due and timely performance and satisfaction of each of said covenants, obligations and liabilities.

9.11 Transfer Taxes. Except as expressly provided in Section 2.6(b), all transfer, documentary, sales, use, stamp, registration, value-added and other similar Taxes and fees incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by Parent and Purchaser when due.

9.12 Construction.

(a) For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include masculine and feminine genders.

(b) The Parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be applied in the construction or interpretation of this Agreement.

 

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(c) As used in this Agreement, the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.”

(d) Except as otherwise indicated, all references in this Agreement to “Sections,” “Exhibits,” “Annexes” and “Schedules” are intended to refer to sections of this Agreement and Exhibits, Annexes or Schedules to this Agreement.

(e) The bold-faced headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

(f) The phrases “made available” and “delivered,” when used in reference to anything made available to Parent, Purchaser or any of their respective Representatives prior to the execution of this Agreement, shall be deemed to mean uploaded to and made available to Parent, Purchaser and their respective Representatives in complete and unredacted form no later than two (2) Business Days prior to the date of this Agreement in the online data room hosted on behalf of the Company by Firmex under the name “IMDZ — Total Company”.

[Signature page follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the date first above written.

 

IMMUNE DESIGN CORP.
By:  

/s/ Carlos M. Paya M.D., Ph.D.

Name:  

Carlos M. Paya M.D., Ph.D.

Title:  

President and Chief Executive Officer

[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]

 

56.


MERCK SHARP & DOHME CORP.
By:  

/s/ Sunil A. Patel

Name:  

Sunil A. Patel

Title:  

Sr. VP & Head of Corporate Development

 

CASCADE MERGER SUB INC.
By:  

/s/ Faye C. Brown

Name:  

Faye C. Brown

Title:  

Assistant Secretary

[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]

 

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EXHIBIT A

CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):

Acceptable Confidentiality Agreement. “Acceptable Confidentiality Agreement” is defined in Section 5.3(a) of the Agreement.

Acquisition Proposal. “Acquisition Proposal” shall mean any proposal or offer by or from any Person (other than Parent and its Affiliates) or “group”, within the meaning of Section 23(d) of the Exchange Act, including any amendment or modification to any such proposal or offer, relating to, in a single transaction or series of related transactions, any (a) acquisition or license of assets of the Acquired Corporations equal to 20% or more of the Company’s assets or to which 20% or more of the Company’s revenues or earnings are attributable, (b) issuance or acquisition of 20% or more of the outstanding Shares, (c) recapitalization, tender offer or exchange offer that if consummated would result in any Person or group beneficially owning 20% or more of the outstanding Shares or (d) merger, consolidation, amalgamation, share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company that if consummated would result in any Person or group beneficially owning 20% or more of the outstanding Shares, in each case other than the Transactions.

Acquired Corporations. “Acquired Corporations” shall mean the Company and each of its Subsidiaries.

Affiliate. “Affiliate” shall mean, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean 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.

Agreement. “Agreement” shall mean the Agreement and Plan of Merger to which this Exhibit A is attached, as it may be amended from time to time.

Anti-Corruption Laws. “Anti-Corruption Laws” shall mean the Foreign Corrupt Practices Act of 1977, as amended, the Anti-Kickback Act of 1986, as amended, the UK Bribery Act of 2010, and the Anti-Bribery Laws of the People’s Republic of China or any applicable Legal Requirements of similar effect, and the related regulations and published interpretations thereunder.

Antitrust Laws. “Antitrust Laws” shall mean the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, state antitrust laws, and all other applicable Legal Requirements and regulations (including non-U.S. laws and regulations) issued by a Governmental Body that are designed or intended to preserve or protect competition, prohibit and restrict agreements in restraint of trade or monopolization, attempted monopolization, restraints of trade and abuse of a dominant position, or to prevent acquisitions, mergers or other business combinations and similar transactions, the effect of which may be to

 

A-1.


lessen or impede competition or to tend to create or strengthen a dominant position or to create a monopoly.

Balance Sheet. “Balance Sheet” is defined in Section 3.6 of the Agreement.

Book-Entry Shares. “Book-Entry Shares” shall mean non-certificated Shares represented by book-entry.

Business Day. “Business Day” shall mean a day except a Saturday, a Sunday or other day on which banks in the City of New York are authorized or required by Legal Requirements to be closed.

Certificates. “Certificates” is defined in Section 2.6(b) of the Agreement.

Change in Circumstance. “Change in Circumstance” shall mean any material event or development or material change in circumstances with respect to the Company that (a) was neither known to the Company Board nor reasonably foreseeable as of or prior to the date of the Agreement and (b) does not relate to (i) any Acquisition Proposal, (ii) any events, changes or circumstances relating to Parent, Purchaser or any of their Affiliates, (iii) clearance of the Merger or the expiration or termination of any waiting period under the Antitrust Laws, or (iv) (1) the results of, or any data derived from, any pre-clinical or clinical testing being conducted by or on behalf of the Acquired Corporations, any of their competitors or any of their respective collaboration partners or any announcement relating thereto, or (2) any action or announcement by any Governmental Body that relates to any of the Acquired Corporations’ assets or programs.

Change of Control Payment. “Change of Control Payment” is defined in Section 3.9(a)(vii) of the Agreement.

Closing. “Closing” is defined in Section 2.3(a) of the Agreement.

Closing Date. “Closing Date” is defined in Section 2.3(a) of the Agreement.

Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.

Company. “Company” is defined in the preamble to the Agreement.

Company Adverse Change Recommendation. “Company Adverse Change Recommendation” is defined in Section 6.1(a) of the Agreement.