AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER
Exhibit 2.2
AMENDMENT NO. 1 TO
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
This Amendment No. 1 to Agreement and Plan of Merger (“ Amendment”) is made
and entered into as of January 27, 2011, by and among: Onyx Pharmaceuticals, Inc., a
Delaware corporation (“ Onyx”); and Shareholder Representative Services
LLC, a Colorado limited liability company (“ SRS”).
Recitals
A. Onyx, Profiterole Acquisition Corp., Onyx Therapeutics, Inc (formerly Proteolix, Inc.)
(“ Proteolix”) and SRS are parties to that certain Agreement and Plan of Merger dated as of
October 10, 2009 (the “ Merger Agreement”). Capitalized terms not otherwise defined in this
Amendment shall have the meanings given to such terms in the Merger Agreement.
B. Onyx, SRS and US Bank National Association (the “ Escrow Agent”) are parties to that
certain Escrow Agreement dated as of November 16, 2009 (the “ Escrow Agreement”).
C. Pursuant to Section 10.13 of the Merger Agreement, SRS, acting exclusively for and on
behalf of all of the Effective Time Holders, and Onyx may amend the terms of the Merger Agreement
following the Closing Date.
D. Pursuant to Section 10.1 of the Merger Agreement, SRS was granted full authority by the
Effective Time Holders to, among other things (a) take any actions to resolve or settle all matters
and disputes arising out of the Merger Agreement and (b) execute and deliver, on behalf of the
Effective Time Holders, all documents that SRS determines necessary, desirable or appropriate in
connection therewith. In executing and delivering this Amendment, SRS is acting in all matters
contained herein on its behalf and on behalf of all of the Effective Time Holders.
E. The parties to this Amendment wish to amend the Merger Agreement as set forth in this
Amendment.
Agreement
Accordingly, in consideration of the foregoing, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties to this Amendment hereby
agree as follows:
1. The Merger Agreement is hereby amended by deleting the definition of “ Milestone Event 2
Termination Date” in Section 1.7(a)(ix) in its entirety and replacing it with the following:
“(ix)(1) “ Milestone Event 2 Initial Date” shall mean [*]; provided, however,
that (A) if Milestone Event 2 has not occurred by [*], and such failure to occur by
[*] is due to (1) a request by the FDA for an updated safety database, or to allow the
FDA to hold an advisory committee meeting, or to complete either clinical or manufacturing audits
or to finalize the prescribing information content, (2) a request by
[*] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.
the FDA for Parent to further analyze, format or submit Product data available from studies at the
time of such request or (3) an extension by the FDA of the PDUFA action date with respect thereto
(each event described in clauses “(1)” through “(3)” of this proviso, an “ FDA Delay
Event”), then the Milestone Event 2 Initial Date shall be extended until [*]; or (B)
if Parent implements a Material Modification to the Agreed Trial Design for the 011 Study, then the
Milestone Event 2 Initial Date, as may be extended in accordance with clause “(A)”, will be
extended further by the time period (the “ Material Modification Delay Period”) equal to the
difference, in days, between (1) the expected date of completion (measured by the date of last
visit of the last patient enrolled) of the 011 Study, under the Agreed Trial Design for such study
(as modified by any Permitted Modifications) and (2) the actual date of completion (measured by the
date of last visit of the last patient enrolled) of the 011 Study as implemented with such Material
Modification.
(ix)(2) “ Milestone Event 2 Second Date” shall mean [*]; provided, however,
that (A) if Milestone Event 2 has not occurred by [*], and such failure to occur by
[*] is due to an FDA Delay Event, then the Milestone Event 2 Second Date shall be
extended until [*]; or (B) if Parent implements a Material Modification to the Agreed
Trial Design for the 011 Study, then the Milestone Event 2 Second Date, as may be extended in
accordance with clause “(A)”, will be extended further by the Material Modification Delay Period.
(ix)(3) “ Milestone Event 2 Termination Date” shall mean [*]; provided,
however, that (A) if Milestone Event 2 has not occurred by [*], and such failure to occur
by [*] is due to an FDA Delay Event, then the Milestone Event 2 Termination Date shall be
extended until [*]; or (B) if Parent implements a Material Modification to the Agreed
Trial Design for the 011 Study, then the Milestone Event 2 Termination Date, as may be extended in
accordance with clause “(A)”, will be extended further by the Material Modification Delay Period.”
2. The Merger Agreement is hereby amended by deleting the “Milestone Payment” relating to
Milestone Event 2 in the chart set forth in Section 1.7(b) in its entirety and replacing it with
the following:
“If Milestone Event 2 occurs on or before the Milestone Event 2 Initial Date: $170,000,000
If Milestone Event 2 occurs after the Milestone Event 2 Initial Date but on or before the
Milestone Event 2 Second Date: $130,000,000
If Milestone Event 2 occurs after the Milestone Event 2 Second Date but on or before the
Milestone Event 2 Termination Date: $80,000,000”
3. The Merger Agreement is hereby amended by deleting the first sentence of Section 1.7(h) in
its entirety and replacing it with the following:
“Subject to Section 1.7(i), commencing upon the Closing, Parent and its Subsidiaries
shall use Applicable Efforts to implement and conduct all research, development and clinical
manufacturing activities for, and regulatory activities with respect to, the Product (which
may include activities conducted through third parties) that are components of or directly
related to or required for the achievement of the Milestone Events (other than Milestone
Event 2) by the applicable Milestone Termination Dates.”
4. The Merger Agreement is hereby amended by deleting clause “(i)” of Section 1.7(h) in its
entirety and replacing it with the following
[*] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately
with the Securities and
Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
“(i) [INTENTIONALLY OMITTED];”
5. The parties agree that, notwithstanding anything to the contrary contained in the Merger
Agreement, Onyx shall have no obligation whatsoever to use, and shall be deemed never to have had
to use, Applicable Efforts or any other efforts whatsoever or take any action whatsoever
(including, without limitation, making any particular expenditure or engaging in any particular
activity) with respect to the achievement of Milestone Event 2, including without limitation (i)
conducting and completing the 003-A1 Study based on the Agreed Trial Design for such study, (ii)
using any efforts to implement and conduct any research, development or clinical manufacturing
activities for, and regulatory activities with respect to, the Product (which may include
activities conducted through third parties) that are components of or directly related to or
required for the achievement of Milestone Event 2 by the Milestone Event 2 Termination Date, or
(iii) submitting an NDA to the FDA by [*] (it being understood that the foregoing does
not have any effect on any obligation of Onyx contained in the Merger Agreement to use Applicable
Efforts or to take any particular action with respect to the achievement of any of Milestone Events
3, 4 or 5). Without limiting the generality of the foregoing, SRS (on its behalf and on behalf of
all of the Effective Time Holders) hereby irrevocably, unconditionally and completely releases,
waives and relinquishes any and all past, current and future claims, rights, remedies and causes of
action of any nature (including those relating to fraud, willful or intentional misrepresentation,
breach or other misconduct), known or unknown, that it or any Effective Time Holder has or may
have, under the Merger Agreement or otherwise, arising out of or relating to (A) any failure or
alleged failure by Onyx to use Applicable Efforts or any other efforts whatsoever or to take any
action whatsoever, in the past or in the future, to achieve Milestone Event 2 (including without
limitation the actions referred to in clauses “(i)” through “(iii)” of the preceding sentence), or
(B) any Material Modification made or alleged to have been made to the Agreed Trial Design for the
003-A1 Study to the extent relating to Milestone Event 2 (it being understood that the foregoing
shall not have any effect on any claim, right, remedy or cause of action of SRS under the Merger
Agreement arising out of or relating to any failure by Onyx to use Applicable Efforts or to take
any particular action with respect to the achievement of Milestone Events 3, 4 or 5).
6. The Merger Agreement is hereby amended by deleting Section 1.7(i)(ii) in its entirety and
replacing it with the following:
“(ii) If Parent implements a Material Modification to the Agreed Trial Design for the
003-A1 Study, 009 Study or 011 Study, then (x) the Milestone Termination Date(s) applicable
to such study’s Related Milestone Event(s) (but no other Milestone Event) shall cease to be
applicable, and the Milestone Payment(s) that would become due and payable upon the
satisfaction of such study’s Related Milestone Event(s) (but no other Milestone Payment)
shall become due and payable in accordance with Section 1.7(c) upon the occurrence of such
study’s Related Milestone Event(s) (without regard to the Milestone Termination Date
contemplated thereby) at any time and (y) the obligations of Parent set forth in Sections
1.7(h)(ii) through (iv) shall cease to be applicable with respect to such study’s Related
Milestone Event(s) (but no other Milestone Event) and shall thereafter be replaced with the
following obligations, as applicable:
(1) [INTENTIONALLY OMITTED];
(2) with respect to Milestone Event 3 only: (A) conduct and complete the
011 Study, based on the Agreed Trial Design for such study, as modified, using
Applicable Efforts and, if a Material Modification is made to the 003-A1 Study,
the 003-A1 Study, based on the Agreed Trial Design for such study, as modified,
using Applicable Efforts; (B) submit the MAA for the Product for the Milestone
Event 3 indication to the CHMP and use Applicable Efforts to cause the
designation of day 0
[*] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
of the MAA review clock by EMEA with respect to such MAA on or before the
date that is 9 months after the last patient’s last visit in the 011 Study,
provided in each case that there is a reasonable basis for submission thereof
based upon the outcome of the relevant studies; and (C) if Parent was required
to submit the MAA referred to in clause “(B)” above to CHMP, use Applicable
Efforts to obtain Regulatory Approval for the Product for the Milestone Event 3
indication such that Milestone Event 3 would reasonably be expected to be
achieved;
(3) with respect to Milestone Event 4 only: (A) conduct and complete the
009 Study based on the Agreed Trial Design for such study, as modified, using
Applicable Efforts; (B) complete the interim analysis for the 009 Study using
the Independent Review Committee as contemplated by the Agreed Trial Design for
such study, as modified; (C) complete the final analysis for the 009 Study using
the Independent Review Committee as contemplated by the Agreed Trial Design for
such study, as modified; (D) submit the NDA for the Product for the Milestone
Event 4 indication to the FDA and use Applicable Efforts to cause such NDA to be
accepted for filing by the FDA on or before the date that is 9 months after the
last patient’s last visit in the 009 Study, provided in each case that there is
a reasonable basis for submission thereof based upon the outcome of the relevant
studies; and (E) if Parent was required to submit the NDA referred to in clause
“(D)” above to the FDA, use Applicable Efforts to obtain Regulatory Approval for
the Product for the Milestone Event 4 indication such that Milestone Event 4
would reasonably be expected to be achieved; and
(4) with respect to Milestone Event 5 only: (A) conduct and complete the
009 Study based on the Agreed Trial Design for such study, as modified, using
Applicable Efforts; (B) complete the interim analysis for the 009 Study using
the Independent Review Committee as contemplated by the Agreed Trial Design for
such study, as modified; (C) complete the final analysis for the 009 Study using
the Independent Review Committee as contemplated by the Agreed Trial Design for
such study, as modified; (D) submit the MAA for the Product for the Milestone
Event 5 indication to CHMP and use Applicable Efforts to cause the designation
of day 0 of the MAA review clock by EMEA with respect to such MAA on or before
the date that is 9 months after the last patient’s last visit in the 009 Study,
provided in each case that there is a reasonable basis for submission thereof
based upon the outcome of the relevant studies; and (E) if Parent was required
to submit the MAA referred to in clause “(D)” above to CHMP, use Applicable
Efforts to obtain Regulatory Approval for the Product for the Milestone Event 5
indication such that Milestone Event 5 would reasonably be expected to be
achieved.
For greater clarity, a Permitted Modification to the Agreed Trial Design for the 003-A1
Study, 009 Study or 011 Study shall not constitute a Material Modification to such Agreed
Trial Design. The provisions of Section 1.7(i)(ii) with respect to any specified Milestone
Event shall terminate and be of no further force and effect upon the earliest of: (i) the
payment of the applicable Milestone Payment pursuant to Section 1.7(c), Section 1.7(d) or
Section 1.7(i)(i); and (ii) the occurrence of a Technical Failure (it being understood that
if a Technical Failure occurs, then all provisions in Section 1.7(i)(ii) shall terminate
with respect to all Milestone Events). Notwithstanding anything to the contrary in this
Agreement, Parent, the Company and the Stockholders’ Agent hereby acknowledge and agree that
no failure by Parent or its Subsidiaries to complete any of the actions referenced in
Section 1.7(i)(ii)(2), Section 1.7(i)(ii)(3) or Section 1.7(i)(ii)(4) by the specified
date shall, in and of itself, be the basis of any claim relating to any
[*] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately
with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
alleged breach of this Agreement by Parent, where Parent has undertaken Applicable Efforts
to achieve such actions within such specified timeframe.”
7. The Merger Agreement is hereby amended by deleting the definition of “ Related Milestone
Event” in Section 1.7(a)(xv) in its entirety and replacing it with the following:
“(xv) “ Related Milestone Event” shall mean: (A) with respect to the 001-A3 Study,
Milestone Event 3; (B) with respect to the 011 Study, Milestone Event 3; and (C) with
respect to the 009 Study, Milestone Event 4 and Milestone Event 5.”
8. The Merger Agreement is hereby amended by deleting the word “or” from before clause “(D)”
of the definition of Permitted Modification in Section 1.7(a)(xiv) and adding the following to the
end of such definition:
“or (E) set forth or otherwise described on Schedule 1.7(a)(xiv)”
9. The Merger Agreement is hereby amended by adding Schedule 1.7(a)(xiv) to this Amendment as
Schedule 1.7(a)(xiv) to the Merger Agreement.
10. The Merger Agreement is hereby amended by deleting the parenthetical in Section 9.3(c) in
its entirety and replacing it with the following:
“( other than the First Milestone Payment and any Milestone Payment that becomes due upon the
occurrence of Milestone Event 2
(the “ Milestone Event 2 Payment”))”
(the “ Milestone Event 2 Payment”))”
11. The Merger Agreement is hereby amended by deleting Section 9.3(d) in its entirety and
replacing it with the following:
“(d) Other Liability Caps. Subject to Section 9.3(e), the limitations set forth in
Section 9.3(c) shall not apply: (i) in the event of a willful breach of any covenant or
obligation of the Company in this Agreement or in the event of fraud; (ii) to inaccuracies
in or breaches of any of the Specified Representations or the IP Representations; (iii) to
the matters referred to in Sections 9.2(a)(iii) and 9.2(a)(v); or (iv) to the matters
referred to in Section 9.2(a)(vi) (to the extent related to any of the matters referred to
in clauses “(i)” through “(iii)” of this sentence). Except in the event of fraud: (A)
recourse by the Indemnitees to (1) the Indemnification Escrow Amount and (2) an offset
against up to 30% of any unpaid Milestone Payments (other than the First Milestone Payment
and the Milestone Event 2 Payment) in accordance with Section 9.6 shall be the Indemnitees’
sole and exclusive remedies against any Effective Time Holder, and shall be the Effective
Time Holders’ aggregate maximum liability, for Damages resulting from any inaccuracies in or
breaches of the IP Representations (or resulting from the matters referred to in Section
9.2(a)(vi), to the extent related to any such inaccuracies or breaches); and (B) recourse
by the Indemnitees to (1) the Indemnification Escrow Amount and (2) an offset against up to
100% of any unpaid Milestone Payments (other than the First Milestone Payment and the
Milestone Event 2 Payment) in accordance with Section 9.6 shall be the Indemnitees’ sole
and exclusive remedies against any Effective Time Holder, and shall be the Effective Time
Holders’ aggregate maximum liability, for Damages resulting from: (x) any inaccuracies in or
breaches of the Specified Representations or from any willful breaches of any covenants or
obligation of the Company contained in this Agreement; (y) the matters referred to in
Sections 9.2(a)(iii) and 9.2(a)(v); or (z) the matters referred to in Section 9.2(a)(vi),
to the extent related to any of the matters referred to in clauses “(x)” or “(y)” of this
sentence). Even in the event of fraud, no Indemnitee may offset any Damages against the
Milestone Event 2 Payment.”
[*]
= Certain confidential information contained in this document, marked
by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
12. The Merger Agreement is hereby amended by deleting Section 9.3(e) in its entirety and
replacing it with the following:
“(e) Limit on Direct Recovery from Effective Time Holders. Notwithstanding anything
to the contrary set forth herein, except in the event of fraud, in no event will any
Indemnitee have any recourse to recover directly from any Effective Time Holder any Damages
resulting from the matters referred to in Section 9.2 or from any breach of this Agreement
by the Company from any Merger Consideration that has been paid to such Effective Time
Holder. In the event of fraud, there shall be no limits on the obligation of the Effective
Time Holders pursuant to Section 9.2, and each Indemnitee shall have the right to proceed
directly against, and recover Damages directly from, the Effective Time Holders; provided,
however, that, unless a particular Effective Time Holder committed (or was actively involved
in the commission of) such fraud, the Indemnitees’ right to recover Damages directly from
such Effective Time Holder in connection with such fraud shall be limited to the amount by
which (i) the aggregate amount of the Merger Consideration actually received by such
Effective Time Holder exceeds (ii) the sum of (A) the amount such Effective Time Holder
contributed to the Indemnification Escrow Fund plus (B) such Effective Time Holder’s pro
rata portion of any Milestone Event 2 Payment.”
13. The Merger Agreement is hereby amended by deleting Section 9.6 in its entirety and
replacing it with the following:
“9.6 Setoff. To the extent not fully satisfied out of the Indemnification Escrow Amount,
and subject to any applicable limitations contained in Section 9.3, Parent shall have the
right to withhold and deduct any sum that is owed to any Indemnitee under this Section 9
from any unpaid Milestone Payment (other than the First Milestone Payment and the Milestone
Event 2 Payment). In addition, notwithstanding anything to the contrary contained in this
Agreement, if: (a) prior to the Milestone End Date, any Indemnitee has delivered to the
Stockholders’ Agent a Claim Notice (as defined in Exhibit D) asserting a claim for
recovery under Section 9.2, and (b) the claim for recovery by such Indemnitee referred to
in such Claim Notice has not been resolved prior to the date of payment of a particular
Milestone Payment (other than the First Milestone Payment and the Milestone Event 2
Payment), then, Parent shall have the right to withhold and deduct the Contested Amount (as
defined in Exhibit D) with respect to such unresolved claim (or the Claimed Amount
(as defined in Exhibit D) if the Stockholders’ Agent has not delivered a Response
Notice (as defined in Exhibit D) with respect to such claim for recovery by such
Indemnitee) from such Milestone Payment until such claim has been finally resolved in
accordance with Exhibit D (an amount withheld from any Milestone Payment in
accordance with this sentence, a “ Milestone Holdback Amount”).”
14. Except as it has been specifically amended pursuant to Sections 1 through 13 of this
Amendment, the Merger Agreement shall continue in full force and effect.
15. Onyx hereby withdraws the Claim Notice that it delivered to SRS and the Escrow Agent on
December 30, 2010 (the “ Indemnification Claim”) and Onyx and SRS hereby execute and deliver
joint written instructions to the Escrow Agent (the “ Joint Instructions”) instructing the
Escrow Agent to deliver the entire Indemnity Escrow Property (as defined in the Escrow Agreement)
to the Payment Agent for distribution to the Escrow Holders in accordance with Section 4 of the
Escrow Agreement. Onyx hereby irrevocably, unconditionally and completely releases, waives and
relinquishes any and all past, current and future claims, rights, remedies and causes of action of
any nature (including those relating to fraud, willful or intentional misrepresentation, breach or
other misconduct), known or unknown, that it or any of its affiliates has or may have, under the
Merger Agreement or otherwise, arising out of or relating to (a) the facts and events described in
the Indemnification Claim, or (b) any failure by Onyx to achieve
[*]
= Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
Milestone Event 2, any delay in the achievement of Milestone Event 2 or any increased
costs of achieving Milestone Event 2 (for purposes of this clause “(b)”, achieving Milestone Event
2 includes obtaining the Regulatory Approval referenced in the definition of Milestone Event 2
(without regard to any time limitations set forth in such definition)).
16. Each of SRS (on its behalf and on behalf of each Effective Time Holder) and Onyx: (a)
represents, warrants and acknowledges that the undersigned has been fully advised by its attorney
of the contents of Section 1542 of the Civil Code of the State of California; and (b) hereby
expressly waives the benefits thereof and any rights that it may have thereunder. Section 1542 of
the Civil Code of the State of California provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”
Each of SRS (on its behalf and on behalf of each Effective Time Holder) and Onyx hereby waives the
benefits of, and any rights that it may have under, any statute or common law regarding protection
of release of unknown claims in any jurisdiction.
17. SRS agrees that it will promptly deliver a letter to the Effective Time Holders, the form
and substance of which Onyx has consented to in writing (such consent not to be unreasonably
withheld), informing them of the terms of this Amendment.
18. This Amendment, the Merger Agreement and the agreements referred to herein and therein set
forth the entire understanding of the parties relating to the subject matter hereof and thereof and
supersede all prior agreements and understandings between the parties relating to the subject
matter hereof and thereof.
19. This Amendment may be executed in several counterparts, each of which shall constitute an
original and all of which, when taken together, shall constitute one agreement. The exchange of
fully executed signature pages to this Amendment (in counterparts or otherwise) by electronic
transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms
and conditions of this Amendment.
[Remainder of page intentionally left blank]
[*]
= Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered as of the date first set forth above.
ONYX PHARMACEUTICALS, INC. |
||||
By: | /s/ Xxxxxxx X. Xxxx | |||
Name: | Xxxxxxx X. Xxxx | |||
Title: | Chief Financial Officer | |||
SHAREHOLDER REPRESENTATIVE SERVICES LLC (acting on its behalf and on behalf of all of the Effective Time Holders) |
||||
By: | /s/ Xxxx X. Xxxxx | |||
Name: | Xxxx X. Xxxxx | |||
Title: | Managing Director | |||
Signature Page to Amendment No. 1 to Agreement and Plan of Merger
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately
with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934, as amended.
Schedule 1.7(a)(xiv)
Permitted Modifications to 009 Study
[*]
Permitted Modifications to 011 Study
[*]
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.