Full Press Release Details
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH [***] . SUCH IDENTIFIED INFORMATION HAS BEEN
EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.
SEPARATION AGREEMENT
GILEAD THERAPEUTICS A1
GILEAD SCIENCES INC.
| Page | ||||||
| Articles | ||||||
| 1. | Definitions and Construction | 2 | ||||
| 2. | Separation | 6 | ||||
| 3. | Specific Provisions regarding Potential Acquisitions | 14 | ||||
| 4. | Restructuring | 14 | ||||
| 5. | Specific Provisions regarding SpinCo | 14 | ||||
| 6. | Specific Provisions regarding the Company | 17 | ||||
| 7. | Specific Covenants of the Investor and Parent Investor | 24 | ||||
| 8. | Transitional Services | 25 | ||||
| 9. | Adherence by SpinCo | 26 | ||||
| 10. | Company Intellectual Property | 26 | ||||
| 11. | Convertible Loan by SpinCo to the Company | 26 | ||||
| 12. | Further Assurance | 26 | ||||
| 13. | Confidentiality and Announcements | 26 | ||||
| 14. | Miscellaneous | 28 | ||||
| 15. | Governing Law and Dispute Resolution | 30 | ||||
| Page S- | ||||||
| Schedules | ||||||
| Schedule 1 Separation | 1 | |||||
| Schedule 2 Principal terms of Backstop Facility Agreement | 5 | |||||
| Schedule 3 Agreed Form Announcement | 6 | |||||
| Schedule 4 Adherence Letter | 7 | |||||
| Schedule 5 Agreed Form Royalty Agreement | 9 |
SEPARATION AGREEMENT
This Separation Agreement (the Agreement ) is entered into on 7 January 2025,
The parties listed in (1) to (3) above are
each hereinafter referred to as the Parties , and each individually as a Party .
Terms and expressions that are not otherwise defined in this Agreement will have the following meanings, save where the content or context
Acting in Concert means, when used in relation to a person or entity, acting in concert
( in onderling overleg handelende personen / personnes agissant de concert ) in the sense of Article 3, 1, 5 and 2 of the Belgian Act of 1 April 2007 regarding public takeover bids, or Article 1, 2,
5 of the Belgian Royal Decree of 27 April 2007 regarding public takeover bids.
Adherence Letter means the
letter substantially in the agreed form as attached in Schedule 4 or in such other form as may be agreed between the Parties.
Adjusted SpinCo Share Value means the product obtained by multiplying (i) the SpinCo Share Value times
(ii) the Demerger Ratio.
Affiliate means, with respect to a particular person or entity, any person, corporation,
partnership, or other entity that controls, is controlled by or is under common control with such person or entity, for so long as such control exists, regardless of whether such person or entity is or becomes an Affiliate on or after the Agreement
Date; provided that (a) the Company, SpinCo and their respective Subsidiaries shall not be Affiliates of Parent Investor or Investor; and (b) Parent Investor and Investor shall not be Affiliates of the Company, SpinCo or their
respective Subsidiaries. For the purposes of this definition, the word control (including, with correlative meaning, the terms controlled by or under the common control with ) means the actual power, either
directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting stock of such entity, or by contract
Agreement Date means the date on which this Agreement is entered into.
Announcement means the public announcement regarding the transactions contemplated by this Agreement, attached hereto a
Belgian Companies and Associations Code means the Belgian Companies and Associations Code of 23 March
2019, as amended from time to time, and the rules and regulations promulgated thereunder.
BiotechCo Ratio means the
quotient obtained by dividing the Company Share Value by the BiotechCo Share Value.
BiotechCo Share Value means the
volume weighted average of the trading prices of a share of the Company, as reported on Euronext on the first five consecutive trading days following the Separation Effective Time.
Board of Directors means, when used with respect to the Company or SpinCo, the board of directors ( raad van bestuur
/ conseil d administration ) of the Company or SpinCo.
Business Day means a day (excluding
Saturday and Sunday) on which banks generally are open in Mechelen, Belgium, California, United States and Dublin, Ireland for the transaction of normal banking business, and excluded the period commencing on 25 December and ending on
1 January (inclusive).
Capital Allocation means the capital allocation principles as set out in Part B of Schedule
Company Share Value means the sum of the BiotechCo Share Value and the Adjusted SpinCo Share Value.
Confidential Information has the meaning given to that term in Article 13.1.
Demerger Ratio means the number of shares of SpinCo provided in the Separation in respect of one share of the Company.
Director means, when used in respect of the Company or SpinCo, a member of the Board of Directors of the Company or SpinCo,
EGM means, when used in respect of the Company or SpinCo, an extraordinary shareholders meeting of
the Company or SpinCo, as relevant.
Equity Security means, when used in relation to the Company or SpinCo,
(i) any share representing the share capital of the Company or SpinCo, respectively, and (ii) any other security, financial instrument, certificate and other right (including options, futures, swaps and other derivatives) issued or, with
respect to options, futures, swaps and other derivatives, contracted by Company or SpinCo, respectively, and representing, being exercisable, convertible or exchangeable into or for, or otherwise providing a right to acquire, directly or indirectly,
any of the Equity Securities referred to in (i).
EU Market Abuse Regulation means Regulation (EU) No 596/2014 of
the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and
2004/72/EC, as amended from time to time, and the rules and regulations promulgated thereunder.
First Equity Financing
means the raising of an aggregate gross amount in cash of at least [***] in equity by the Company, provided the raising of equity as a result of an exercise or conversion of the following Equity Securities shall not qualify as or count towards a
First Equity Financing: (i) the Warrants, (ii) Subscription Rights, (iii) the RSUs, or (iv) any other share based incentive plan of the Company from time to time for one or more members of the personnel of the Company or its
Subsidiaries (as defined by Article 1:27 of the Belgian Companies and Associations Code), in each case of (i) to (iv) as adjusted as contemplated by this Agreement in connection with or pursuant to the Separation.
Independent Non-Executive Director
or INED means, when used in respect of the Company or SpinCo, an independent non-executive Director of the Company or SpinCo, as relevant.
Option, License and Collaboration Agreement or OLCA has the meaning given to it in Recital (C).
Novated Agreements means the OLCA, the Security Agreement and the Patent Security Agreement.
Novation Agreement means the novation agreement in the form attached to the Transfer Agreement as Exhibit A.
Patent Security Agreement means the patent security agreement, dated 23 August 2019 by and between the Company and the
Parent Investor in connection with the OLCA, and any other Patent Security Agreements entered into pursuant to the Security Agreement.
Quorate EGM means an EGM that has been duly and validly convened and meets the requirements, as the case may be, in relation
to the attendance quorum for the shares that are to be present or represented at such EGM in order to allow such EGM to duly and validly deliberate and vote on the respective proposals and items on the agenda of such EGM in accordance with
applicable law and/or the articles of association of the Company or SpinCo, as relevant.
RSU means a restricted stock
unit or other form of long term incentive that has been or will be issued, granted or put in place by the Company (or its Subsidiaries) prior to or after the Agreement Date in accordance with its existing practices.
Security Agreement means the security agreement entered into on 23 August 2019 by and between the Company and the
Parent Investor in connection with the OLCA.
Separation has the meaning given to it in Recital (E).
Separation Effective Time has the meaning given to it in Article 2.5(c).
SpinCo means the company into which the Allocated Assets and Allocated Liabilities of the Company are to be transferred by
means of the Separation through a partial demerger pursuant to the Belgian Companies and Associations Code as contemplated by this Agreement.
SpinCo Initial Capital Allocation has the meaning given to that term in Part B of Schedule 1.
SpinCo Ratio means the quotient obtained by dividing the Company Share Value by the SpinCo Share Value.
SpinCo Share Value means the volume weighted average of the trading prices of a share of SpinCo, as reported on Euronext
Brussels, on the first five consecutive trading days following the Separation Effective Time.
Subscription Agreement
has the meaning given to it in Recital (D).
Subscription Right means any subscription right
( inschrijvingsrecht / droit the souscription ) that has been or will be issued or granted by the Company for the benefit of one or more members of the personnel of the Company or its Subsidiaries (as defined by Article 1:27
of the Belgian Companies and Associations Code) prior to or after the Agreement Date in accordance with its existing practices.
Subsidiary means, when used in relation to an entity (for the purpose of this definition, the reference entity ),
an entity in which the reference entity directly or indirectly owns, beneficially or of record, (a) an amount of voting securities or other interests in such entity that is sufficient to enable the reference entity to elect at least a majority
of the members of such entity s board of directors or other governing body, or (b) at least 50% of the outstanding equity or financial interests of such entity.
Third Party means any person or entity other than the Company, Investor,
Investor Parent or any of their respective Affiliates.
Transfer Agreement means the transfer agreement entered into on
the Agreement Date by and between the Company and the Parent Investor.
Transfer Regulations means any law implementing
Council Directive 77/187/EEC as amended by Council Directive 98/50EC and any similar legislation in any country which provides for the automatic transfer of employment in the event of the transfer of a business or services;
Warrant means the subscription right, named Subsequent Gilead Warrant B , that has been issued by the
Company s extraordinary general shareholders meeting held on 30 April 2024.
Subject to and in accordance with the terms and conditions set out in this Agreement and the relevant provisions of the Belgian Companies and
Associations Code, the Company will take the necessary steps in order to allow a Quorate EGM of the Company to approve (the relevant elements of) the Separation through a partial demerger in accordance with Article 12:8, 1 of the Belgian
Companies and Associations Code ( een met splitsing gelijkgestelde verrichting / une op ration assimil e la scission ) (including the adjustment of the Warrant,
the Subscription Rights, the Belgian Tax Recuperation Mechanism and the RSUs, as contemplated by Articles 2.3 and 2.4) and the grant of rights to the Parent Investor under the Royalty Agreement in accordance with Article 7:151 of the Belgian
Companies and Associations Code by undertaking the respective steps set out in Part 1 of Schedule 1 (the Separation Completion Steps ).
provided that the rights and interests in the Allocated Agreements shall be transferred to SpinCo
only to the extent that they relate to any period on or after the Separation Effective Time.
From and after the Separation Effective Time: