EXHIBIT (a)(7)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
OF
CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
AT $4.60 NET PER SHARE
BY
AC ACQUISITION SUBSIDIARY, INC.
A WHOLLY OWNED SUBSIDIARY
OF
CANGENE CORPORATION
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON JANUARY 3, 2001, UNLESS THE OFFER IS EXTENDED.
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November 17, 2000
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated November
17, 2000 (the "Offer to Purchase") and the related Letter of Transmittal
(which, together with any amendments or supplements thereto, constitute the
"Offer") relating to the third party tender offer by AC Acquisition Subsidiary,
Inc., a Maryland corporation (the "Purchaser") and a wholly owned subsidiary of
Cangene Corporation, a Canadian corporation ("Cangene"), to purchase all of the
issued and outstanding shares of class A common stock, par value $.01 per share
(the "Shares") of Chesapeake Biological Laboratories, Inc. , a Maryland
corporation (the "Company"), at a price of $4.60 per Share, net to the seller
in cash, less any required withholding of taxes and without the payment of any
interest, upon the terms and subject to the conditions set forth in the Offer.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. THE 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. A TENDER OF SUCH SHARES
CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all of the Shares held by us for your account, in
accordance with the terms and subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The Offer price is $4.60 per Share, net to the seller in cash, less
any required withholding of taxes.
2. The Offer is being made for all of the issued and outstanding Shares.
3. The Offer is being made pursuant to the terms of a Merger Agreement,
dated as of October 30, 2000, among Cangene, Company and Purchaser
(the "Merger Agreement"). The Merger Agreement provides, among other
things, for the making of the Offer by Purchaser. The Merger Agreement
further provides that Purchaser will be merged with and into the
Company (the "Merger") promptly after satisfaction or waiver of
certain conditions. The Company will continue as the surviving
corporation after the Merger and will be a wholly owned subsidiary of
Cangene.
4. The Board of Directors of the Company has (i) determined that each of
the Offer and the Merger is advisable and is fair to the stockholders
of the Company and in the best interests of such stockholders, (ii)
approved and adopted the Merger Agreement and the transactions
contemplated thereby and (iii) recommend acceptance of the Offer and
approval and adoption by the stockholders of the Company, if
necessary, of the Merger Agreement.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on January 3, 2001, unless the Offer is extended.
6. Tendering stockholders will not be obligated to pay any commissions or
fees to any broker, dealer or other person or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with
respect to the transfer and sale of Shares to Purchaser or to its
order pursuant to the Offer.
7. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OR
WAIVER OF CERTAIN CONDITIONS TO THE OBLIGATIONS OF PURCHASER AND THE
COMPANY TO CONSUMMATE THE OFFER, INCLUDING (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES (INCLUDING
SHARES INTO WHICH THE COMPANY'S SERIES A-1 CONVERTIBLE PREFERRED STOCK
IS CONVERTIBLE AND THE SHARES FOR WHICH THE COMPANY'S WARRANTS ARE
EXERCISABLE), (II) RECEIPT BY PURCHASER AND THE COMPANY OF CERTAIN
GOVERNMENTAL AND REGULATORY APPROVALS, AND (III) THE LOAN COMMITMENT
FROM THE BANK OF NOVA SCOTIA NOT BEING WITHDRAWN.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf on or prior to the expiration of
the Offer.
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INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE
ALL OF THE OUTSTANDING SHARES OF CLASS A COMMON STOCK
OF
CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
AT
$4.60 NET PER SHARE
BY
AC ACQUISITION SUBSIDIARY, INC.
A WHOLLY OWNED SUBSIDIARY
OF
CANGENE CORPORATION
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated November 17, 2000 of AC Acquisition Subsidiary, Inc., a
Maryland corporation and a wholly owned subsidiary of Cangene Corporation
("Purchaser"), and the related Letter of Transmittal, relating to the shares of
class A common stock, par value $.01, of Chesapeake Biological Laboratories,
Inc., a Maryland corporation (the "Shares").
This will instruct you to tender to Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) which are
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 in the related Letter of
Transmittal furnished to the undersigned.
Number of Shares to be Tendered*
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Dated: , 2000
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Signature(s)
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Print Name(s)
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Address(es)
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Area Code and Telephone Number
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Tax ID or Social Security Number
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* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
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