| | On August 12, 2020, the Issuer announced in a press release that it had entered into an Agreement and Plan of Merger, dated as of August 11, 2020 (the “Merger Agreement”), by and among CBMG Holdings, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“Parent”), CBMG Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”) and the Issuer. Pursuant to the Merger Agreement, Merger Sub will be merged with and into the Issuer (the “Merger”), with the Issuer surviving the Merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are newly-formed entities formed on behalf of a consortium consisting of (i) Bizuo (Tony) Liu, Yihong Yao, Viktor Pan, Zheng Zhou, Li (Helen) Zhang, Chengxiang (Chase) Dai, Dangdai International Group Co., Limited, Mission Right Limited, Wealth Map Holdings Limited, Earls Mill Limited, OPEA SRL, Maplebrook Limited and Full Moon Resources Limited (the “Consortium Rollover Stockholders”) and (ii) Yunfeng Fund III, L.P., TF Capital Fund III L.P., Velvet Investment Pte. Ltd., and Bizuo (Tony) Liu (the “Equity Investors,” and together with the Consortium Rollover Stockholders, the “Consortium”).
Pursuant to the Merger Agreement, each share of the Common Stock issued and outstanding immediately prior to the effective time of the Merger, other than (i) shares of the Common Stock owned by Parent, Merger Sub or any other direct or indirect wholly-owned subsidiary of Parent and shares of the Common Stock owned by the Issuer, (ii) the Rollover Shares (as defined below), and (iii) shares of the Common Stock owned by stockholders who are entitled to, and who have timely perfected and not withdrawn a demand for (or lost their right to), appraisal rights pursuant to Section 262 of the General Corporation Law of the State of Delaware, will be converted into the right to receive $19.75 in cash, without interest. The Merger is subject to the approval of the Issuer’s stockholders, including a non-waivable condition requiring approval by the holders of a majority of the outstanding shares of the Common Stock that are not beneficially owned by Parent, the Consortium Rollover Stockholders, Novartis Pharma AG, the Equity Investors and their respective affiliates, and various other closing conditions. If the Merger is consummated, the Common Stock will no longer be traded on the Nasdaq Global Select Market and will be deregistered under the Act, and the Issuer will be privately held by the members of the Consortium and Novartis Pharma AG. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 99.3 hereto and incorporated herein by reference.
Concurrently with the execution and delivery of the Merger Agreement, Novartis Pharma AG entered into a Rollover and Support Agreement with Parent (the “Novartis Support Agreement”). Pursuant to the Novartis Support Agreement, Novartis Pharma AG has agreed that its shares of Common Stock (the “Novartis Rollover Shares”) will be canceled for no consideration in the Merger and that it will subscribe for newly issued ordinary shares of Parent immediately prior to the closing of the Merger. Novartis Pharma AG also agreed, until the earlier of the effective time of the Merger and the termination of the Merger Agreement, to vote all of its shares of the Common Stock (i) in favor of the adoption of the Merger Agreement and any related action reasonably required in furtherance thereof, (ii) against any other acquisition proposal, (iii) against any action, agreement or proposal which could reasonably be expected to impede, interfere with, delay or adversely affect the Merger Agreement, the Merger or the Novartis Support Agreement, and (iv) any action, proposal, transaction or agreement that could reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of Parent and Merger Sub under the Merger Agreement, or of Novartis Pharma AG under the Novartis Support Agreement. The foregoing description of the Novartis Support Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Novartis Support Agreement, a copy of which is filed as Exhibit 99.4 hereto and incorporated herein by reference. Concurrently with the execution and delivery of the Merger Agreement, the Consortium Rollover Stockholders also entered into a Rollover and Support Agreement with Parent (the “Consortium Support Agreement”) with terms substantially similar to the terms of the Novartis Support Agreement and pursuant to which each Consortium Rollover Stockholder has agreed that the shares of Common Stock held by it (except for certain shares of Common Stock held by Consortium Rollover Stockholders that are specifically excluded in the Consortium Support Agreement, which excluded shares will be canceled for cash consideration in the Merger to the same extent as shares of Common Stock generally) (“Consortium Rollover Shares”, and together with the Novartis Rollover Shares, the “Rollover Shares”) will be canceled for no consideration in the Merger and that it will subscribe for newly issued ordinary shares of Parent immediately prior to the closing of the Merger. Each Consortium Rollover Stockholder also agreed in the Consortium Support Agreement to substantially similar voting undertakings as Novartis Pharma AG agreed in the Novartis Support Agreement. |