On 28 September 2009, Crucell entered into several agreements with JHC, an Affiliate of Johnson & Johnson, including the Equity Purchase Agreement, the Shareholder Agreement and the Registration Rights Agreement. The following descriptions of the Equity Purchase Agreement, the Shareholder Agreement and the Registration Rights Agreement do not purport to be complete and are qualified in their entirety by reference to the Equity Purchase Agreement, the Shareholder Agreement and the Registration Rights Agreement, which have been filed as exhibits to the Schedule TO filed with the SEC, which you may examine and copy as set forth in Section 2.8 (Language and Availability of Documentation). Shareholders are encouraged to read the full text of the Equity Purchase Agreement, the Shareholder Agreement and the Registration Rights Agreement for a complete under- standing thereof.
7.26.1 Equity Purchase Agreement
Pursuant to the Equity Purchase Agreement, the Company issued 14,626,984 of its shares to JHC, at a price of EUR 20.63 and in exchange received an aggregate amount equal to EUR 301,754,680. The number of shares issued to JHC represented 17.9% of the outstanding share capital of the Company after such issuance. The Equity Purchase Agreement contained customary representations and warranties relating to Crucell, JHC and the acquired shares and contained certain standard conditions precedent as well as a condition precedent relating to entry into the Collaboration Agreements.
7.26.2 Shareholder Agreement
The Shareholder Agreement, which remains in full force and effect at the date of this Offer Document, includes the following principal terms:
Standstill
For three years following the share issuance date, JHC and its Affiliates may not, without Crucell’s prior approval, purchase or acquire any Shares or securities of Crucell convertible into, or exercisable or exchangeable for, or otherwise giving the holder thereof any rights in respect of, Shares or commence a public offer for the Shares, if, in either case, the consummation of such purchase or acquisition or public offer would result in JHC and its Affiliates in the aggregate beneficially owning (assuming the exercise, exchange or conversion of all securities held by JHC and its Affiliates), directly or indirectly, more than 17.9% of the Shares. Customary exceptions apply to the standstill. The foregoing shall not prevent the Offeror or any of its Affiliates from communicating with the Company to request permission to make, or negotiate the terms of, a public offer for the Shares, so long as the Offeror and its Affiliates do not publicly disclose such communication, request or the terms thereof prior to the time the public offer for the Shares is publicly announced by Crucell and the Offeror for the first time (eerste aankondiging) in accordance with Dutch public offer rules.
Drag Along Right
If Crucell receives a bona fide public offer from a third party and (i) the Crucell Management Board and Crucell Supervisory Board have endorsed, approved, recommended or otherwise supported such public offer, (ii) the holders of at least 70% of the issued and outstanding Shares (including those held by JHC and/or its Affiliates) have tendered their shares to the third party in connection with such public offer and (iii) JHC and/or any of its Affiliates do not have a bona fide matching (x) counter public offer to the Shareholders or (y) other proposal involving the acquisition by a third party of more than 30% of the Shares or assets pending, JHC and its Affiliates shall agree to tender and sell all their shares in such public offer.
Pre-Emptive Right
If Crucell plans to issue any shares or any securities convertible into, or exercisable or exchangeable for, or otherwise giving the holder thereof any rights in respect of, shares, JHC has the right to purchase in such offer such number of shares to maintain its proportionate ownership interest in Crucell on a fully diluted basis (disregarding equity-based awards under the employee stock ownership plan) (subject to customary exceptions). JHC’s pre- emptive right shall expire and no longer be available upon JHC (together with its affiliates) ceasing to beneficially own at least 12% of the Shares.
Approval Rights
Crucell may not without the approval of JHC: (i) commence a tender offer or repurchase of Shares if the consummation of such tender offer or repurchase would result in JHC holding more than 18% of the issued and outstanding Shares, (ii) grant options or other equity awards in excess of the amounts authorised under the employee stock option plan or (iii) amend the Articles of Association in a manner that would create a new class of securities, or make the current rights of the general meeting of Shareholders subject to proposals of the Crucell Management Board and/or Crucell Supervisory Board or subject to other limitations. JHC’s approval right shall expire and no longer be available upon JHC (together with its affiliates) ceasing to beneficially own at least 10% of the issued and outstanding Shares.
7.26.3 Registration Rights Agreement
Pursuant to the Registration Rights Agreement, JHC was granted certain customary rights regarding the registration under the U.S. Securities Act of 1933, as amended, of the Shares issued to it pursuant to the Equity Purchase Agreement. Under the terms of the Registration Rights Agreement, Crucell agreed: (i) to file with the SEC a registration statement on Form F-3 (or any successor form or other appropriate form under the U.S. Securities Act of 1933, as amended) relating to the offer and sale of all of the Ordinary Shares issued to JHC as a result of the equity purchase no later than 90 days from the closing date of the equity purchase and to cause the initial registration statement to remain continuously effective for not less than two years, subject to certain exceptions; (ii) to file with the SEC up to six shelf registration statements within 45 days of JHC’s request for a shelf registration and to cause such shelf registration statement to remain continuously effective for not less than 90 days, subject to certain exceptions; (iii) to provide JHC with the right to include its Shares in certain of Crucell’s registrations of any securities; and (iv) to bear the costs of any registration expenses. The Registration Rights Agreement contains covenants and indemnities that are customary for private placements by public companies.