Exhibit (a)(1)(a)
OFFER TO PURCHASE FOR CASH
UP TO 100 OUTSTANDING CONTRACTUAL CONTINGENT PAYMENT RIGHTS
(THE "CCPRs")
ARISING FROM THE PURCHASE OF CLASS A INTERESTS OF
AMGEN CLINICAL PARTNERS, L.P.
AT
$265,000 NET PER CCPR
BY
MERIDIAN VENTURE GROUP, LLC
-----------------------------------
Meridian Venture Group, LLC, a Delaware limited liability company (the
"Purchaser"), hereby offers to purchase up to 100 outstanding contractual
contingent payment rights arising from the purchase of Class A Interests of
Amgen Clinical Partners, L.P. (the "CCPRs") for cash consideration per CCPR of
$265,000 (the "Purchase Price") upon the terms and subject to the conditions set
forth in this Offer to Purchase and the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer"). The Purchase Price will be automatically reduced by the
aggregate amount of the value of any distributions made or declared by Amgen
Inc. ("Amgen" or the "Company") on or after September 11, 2000, and prior to the
date on which the Purchaser pays the Purchase Price for the tendered CCPRs. This
Offer is made to all current holders of CCPRs (each a "Holder").
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON OCTOBER 20, 2000 UNLESS THE OFFER IS EXTENDED.
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ACCORDING TO THE QUARTERLY LETTER FROM AMGEN DATED MAY 30, 2000,
THERE ARE 838 CCPRs ISSUED AND OUTSTANDING. THE OFFER IS SUBJECT TO
PRORATION. SEE SECTION 2 OF THE OFFER.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE AGREEMENT OF AMGEN
INC. TO TRANSFER CCPRs TO THE PURCHASER, A CONDITION WHICH IN THE REASONABLE
DISCRETION OF PURCHASER MUST BE SATISFIED OR WAIVED PRIOR TO THE EXPIRATION
DATE.
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THE OFFER IS NOT CONDITIONED UPON ANY NUMBER OF CCPRs BEING TENDERED. THE
OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, PURCHASER BEING SATISFIED
PRIOR TO THE EXPIRATION DATE, IN ITS REASONABLE DISCRETION, THAT UPON
PURCHASE OF THE CCPRs PURSUANT TO THE OFFER IT AND/OR ITS NOMINEE WILL HAVE
FULL RIGHTS TO OWNERSHIP AS TO ALL SUCH CCPRs AND THAT IT AND/OR ITS NOMINEE
WILL BECOME THE REGISTERED HOLDER OF THE PURCHASED CCPRs. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE
SECTIONS 1, 2 AND 14 OF THIS OFFER TO PURCHASE.
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EACH HOLDER IS URGED TO READ CAREFULLY THE ENTIRE OFFER TO PURCHASE, THE
LETTER OF TRANSMITTAL AND RELATED DOCUMENTS.
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IMPORTANT
Any Holder wishing to tender all or a portion of his or her CCPRs should
complete and sign the Letter of Transmittal (or a manually signed facsimile
thereof) in accordance with the instructions in the Letter of Transmittal, mail
or deliver it and any other required documents to the Depositary at its address
set forth on the back cover of this Offer to Purchase and tender such CCPRs
pursuant to the procedures for transfer set forth in Section 3 hereof and in the
Instructions attached to the Letter of Transmittal.
The Purchaser is unaware of any established trading market for the CCPRs.
The Purchase Price has been established by Purchaser, in its sole discretion. No
independent opinion, report or appraisal related to the valuation of the CCPRs
has been obtained by the Purchaser.
Questions and requests for assistance may be directed to the Information
Agent or the Purchaser at their respective addresses and telephone numbers set
forth in the Instructions attached to the Letter of Transmittal and on the back
cover of this Offer to Purchase. Requests for additional copies of this Offer to
Purchase, the Letter of Transmittal and other related materials may be directed
to the Information Agent or the Purchaser.
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TABLE OF CONTENTS
PAGE
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SUMMARY TERM SHEET ........................................................ iii
INTRODUCTION .............................................................. 1
RISK FACTORS .............................................................. 1
VALUATION ................................................................. 3
1. Terms of the Offer .................................................... 3
2. Proration; Acceptance For Payment and Payment ......................... 4
3. Procedure for Tendering CCPRs ......................................... 5
4. Withdrawal Rights ..................................................... 6
5. Certain Federal Income Tax Consequences of the Offer .................. 7
6. Price Range of the CCPRs .............................................. 11
7. Effect of the Offer on Exchange Act Registration ...................... 12
8. Certain Information Concerning Contractual Contingent Payment Rights .. 12
9. Certain Information Concerning the Purchaser .......................... 13
10. Source and Amount of Funds ............................................ 14
11. Background of the Offer ............................................... 14
12. Purpose of the Offer .................................................. 15
13. Distributions to Holders .............................................. 15
14. Certain Conditions of the Offer ....................................... 16
15. Certain Legal Matters ................................................. 17
16. Fees and Expenses ..................................................... 18
17. Miscellaneous ......................................................... 18
Schedule I ................................................................ I-1
ii
To the Holders of Contractual Contingent Payment Rights arising from the
purchase of Class A Interests of Amgen Clinical Partners, L.P. ("CCPRs"):
SUMMARY TERM SHEET
* WHAT SECURITIES ARE SOUGHT IN THE OFFER? The securities that are sought in
this Offer are Contractual Contingent Payment Rights arising from the
purchase of Class A Interests of Amgen Clinical Partners, L.P.
* WHO IS OFFERING TO BUY MY CCPRs? Meridian Venture Group, LLC, a Delaware
limited liability company ("we") are offering to purchase your CCPRs which
are securities which entitle you, according to their terms, to contingent
payments based on the sale of the drug Neupogen from the drug maker Amgen,
Inc. Meridian Venture Capital, LLC, a Delaware limited liability company,
and our manager and sole member, formed us to buy and hold CCPRs of
pharmaceutical companies. Meridian Venture Capital, LLC delegated its
rights, powers and duties as our manager with respect to our Offer and the
purchase, sale, holding, and exercise of all rights with respect to CCPRs
on our behalf to Meridian Venture Group Management Ltd., a New York
corporation, which is affiliated with us and Meridian Venture Capital,
LLC. See Section 9 - "Certain Information Concerning the Purchaser" and
Schedule 1.
* WHAT ARE THE TERMS OF THE OFFER? We are offering to purchase up to 100
CCPRs from you and the other beneficial owners at $265,000 per CCPR in
cash, adjusted for distributions. We have the cash to consummate this
transaction. If you are the record owner of your CCPR(s) on September 11,
2000 and you complete and send to us a letter of transmittal that we have
provided to you in connection with this Offer, where you agree to sell or
"tender" your CCPRs to us, you will be able to participate. If you tender
your CCPRs, you will receive the cash price we are offering for your
CCPRs, unless more than 100 units are tendered to us. If that happens, we
will still purchase a total of 100 CCPRs but we may elect to purchase from
you only a fraction of the CCPRs you tender, but still at the rate of
$265,000 per CCPR. The Purchase Price will be automatically reduced by the
aggregate amount of the value of any distributions made or declared by
Amgen Inc. ("Amgen") on or after September 11, 2000, and prior to the date
on which the Purchaser pays the Purchase Price for the tendered CCPRs. You
also will not have to pay any brokerage fees or any similar expenses if
you tender the CCPRs directly to the third party depositary that we hired
to complete this transaction. If you own your CCPRs through a broker or
other nominee, you might want to check whether they will charge any fee to
tender your CCPRs for you. See the "Introduction" to this Offer to
Purchase and Section 1 - "Terms of the Offer".
* DOES THE PURCHASER HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? Yes.
Pursuant to commitments from investors and a credit facility with a
certain commercial lender, we will have the funds available to acquire the
shares in the Offer. See Section 10 - "Source and Amount of Funds".
* IS THE PURCHASER'S FINANCIAL CONDITION RELEVANT TO MY DECISION ON WHETHER
TO TENDER IN THE OFFER? No. Since we are paying cash for your CCPRs and
the Offer is not subject to a financing condition, we do not believe that
the financial condition of the Purchaser is important to your decision to
tender in the Offer. See Section 10 - "Source and Amount of Funds".
* HOW LONG DO YOU HAVE TO DECIDE TO TENDER? You will have until midnight,
New York City Time on October 20, 2000, to tender your CCPR(s) unless we
extend the time period of our Offer, which extends the time period that
you can tender. See Section 1--"Terms of the Offer" and Section 3 -
"Procedure for tendering CCPRs".
iii
* CAN WE EXTEND THE TIME PERIOD OF OUR OFFER? We may but are not obligated
to extend the time period of our tender offer. If we do extend, we will
not only notify the third party depositary we hired about the extension,
but we will also make a public announcement for your benefit on our intent
to extend. This announcement will be made no later than 9:00 a.m., New
York City Time on the business day after what would have been the original
expiration date. See Section 1 - "Terms of the Offer".
* HOW DO I TENDER MY CCPRs? Tendering your CCPRs is easy. All you have to do
is complete and sign the transmittal letter which was provided which
indicates you want to sell your CCPRs to us. Then send it to the
depositary we hired to help us complete this Offer prior to the expiration
of the Offer. See Section 3 - "Procedure for Tendering CCPRs".
* IF I TENDER MY CCPRs, CAN I CHANGE MY MIND? You can withdraw your tender
any time if your notice electing withdrawal is received by the depositary
prior to the expiration of the Offer. In order to withdraw, send written
notice of your intent to withdraw. Be sure to specify the name of the
registered holder which is probably you, the name of the person who
tendered the CCPR(s), and the number of CCPR(s) that are being withdrawn.
See Section 4 - "Withdrawal Rights".
* WHAT DOES AMGEN INC.'S BOARD OF DIRECTORS THINK OF THE OFFER? As of the
time of the commencement of our Offer, Amgen's Board of Directors has not
expressed any opinion on our Offer. Amgen must file a response with the
Securities and Exchange Commission within 10 business days after the date
of our Offer. See Section 11 - "Background of Offer".
* IF I DO NOT TENDER ALL OF MY CCPRs, WHAT HAPPENS TO THE VALUE OF THE CCPRs
I KEEP? We believe that the current value of any CCPR(s) that you do not
tender will not be affected. However, there can be no assurance that there
will be an available market at the time you decide to sell your CCPRs in
the future. Assuming there is an available future market, it is unknown
whether the sales price that you would receive for your CCPRs at a future
time would be more or less than the price we are offering as part of this
Offer.
* WHAT IS THE MARKET VALUE OF MY CCPRs AS OF A RECENT DATE? There is no
established market for the CCPRs. From time to time, we and others have
made offers to purchase CCPRs or fractional units of CCPRs. No independent
person has been retained by us to evaluate or render any opinion with
respect to the purchase price we are offering, and we make no
representations as to the fairness of our Offer. We did not attempt to
attain current independent valuations or appraisals of the CCPRs. See
Section 6 --"Price Range of the CCPRs."
* IF I OBJECT TO THE PRICE BEING OFFERED, WILL I HAVE APPRAISAL RIGHTS? No.
Appraisal rights are not available in the Offer. You may choose to retain
your CCPRs by not tendering in the Offer and any CCPR(s) retained by you
will be unaffected by this Offer. See Section 12--"Purpose of the Offer"
and Section 15--"Certain Legal Matters".
* WHAT ARE THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF TENDERING MY
CCPRs? Your sale of a CCPR pursuant this Offer is a taxable event for United
States federal income tax purposes and in all likelihood for state,
local and perhaps foreign income tax purposes also. For original Holders
and possibly secondary Holders, a portion of the proceeds that you receive
from the sale of the CCPR may constitute ordinary interest income. In
addition, if you are an original Holder of a CCPR, a portion of the
proceeds that you receive from such sale may give rise to additional
ordinary income attributable to your share of certain inventory items and
"unrealized receivables" of ACPLP. The remaining proceeds that you receive
from your sale of a CCPR pursuant to this Offer, to the extent exceeding
or less than your basis in the sold CCPR, should result in, respectively,
capital gain or loss. Currently, for individuals, trusts and estates, a
capital gain attributable to property held for more than 12 months is
generally taxed at a maximum 20%
iv
tax rate. It is recommended that you consult your tax advisor concerning
the taxable impact of tendering your CCPRs. See Section 5 - "Certain
United States Federal Income Tax Consequences of the Offer".
WHAT ARE THE CONDITIONS TO THE TENDER OFFER? The consummation of this tender
offer is conditioned upon us being satisfied that, upon purchase of the
CCPRs pursuant to the Offer, we will have full ownership rights and will
become the registered holder all of the purchased CCPRs. These conditions
include the consent of Amgen to transfer the CCPRs to us and to make
payments with respect to the CCPRs directly into a collection account
controlled by a collateral agent to which we have pledged a security
interest in the CCPRs on behalf of the parties that are providing us with
the financing for their purchase. The consummation is also conditioned
upon all material regulatory and related approvals having been obtained or
made on terms reasonably satisfactory to us; the absence of litigation
challenging this tender offer or any law enacted preventing this tender
offer; and the absence of a competing tender offer; or the absence of any
change effecting the contingent payments relevant to each CCPR. See
Section 14--"Certain Conditions of the Offer."
* WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You may call either of the following:
Purchaser
David B. Schmickel
Meridian Venture Group, LLC
767 Fifth Avenue
New York, New York 10153
(212) 688-2015
Information Agent
MMS Escrow and Transfer Agency
PO Box 7090
Troy, Michigan 48007-7090
Attention: Matthew Fisher
(877) 346-8317
v
INTRODUCTION
Meridian Venture Group, LLC, a Delaware limited liability company (the
"Purchaser"), hereby offers to purchase up to 100 outstanding Class A
contractual contingent payment rights (the "CCPRs") arising from the purchase of
Class A Interests of Amgen Clinical Partners, L.P. ("ACPLP" or the
"Partnership"), for cash consideration per CCPR of $265,000, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in this Offer to Purchase and the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). The Purchase Price will be automatically
reduced by the aggregate amount of the value of any distributions made or
declared by Amgen Inc. ("Amgen"), on or after September 11, 2000, and prior to
the date on which the Purchaser pays the Purchase Price for the tendered CCPRs.
This Offer is made to all current holders of the CCPRs (collectively "Holders"
and individually a "Holder").
In March 1993, Amgen purchased all of the Class A Interests in ACPLP for a
payment of $25,000 (the "Advance Payment") per interest in cash. In addition to
the Advance Payment, Amgen issued to each former Class A Limited Partner a CCPR,
whereby Amgen pays to each Holder an amount equal to a percentage of revenue
from the sale of the Partnership's products through the year 2005. According to
the quarterly letter from Amgen dated May 30, 2000, there are 838 CCPRs issued
and outstanding.
The Purchaser is acquiring the CCPRs solely for investment purposes.
Purchaser believes that the ownership of CCPRs (either by Purchaser or a Holder
who retains his or her CCPRs) remains a speculative investment. The Offer is not
conditioned upon any number of CCPRs being tendered. The Offer is conditioned
upon, among other things, Purchaser being satisfied prior to the Expiration
Date, in its reasonable discretion, that upon purchase of the CCPRs pursuant to
the Offer, Purchaser or its nominee will have full rights to ownership as to all
such CCPRs and that it and/or its nominee will become the registered holder of
the purchased CCPRs. The Offer is also subject to certain other conditions
contained in this Offer to Purchase. See Sections 1, 2 and 14.
Tendering Holders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 to the Letter of
Transmittal, transfer taxes on the purchase of CCPRs pursuant to the Offer.
Purchaser will pay all charges and expenses of MMS Escrow and Transfer Agency,
as the depositary (the "Depositary") and the information agent (the "Information
Agent"), incurred in connection with the Offer. See Section 16--"Fees and
Expenses".
RISK FACTORS
Before tendering, Holders are urged to consider the following risk factors
in addition to the information previously provided:
Although Purchaser cannot predict the future value of the CCPRs, the
Purchase Price could differ significantly from the proceeds that would be
realized by holding the CCPRs for the entire life of the expected payment
stream.
Purchaser is making the Offer with a view toward making a profit.
Accordingly, there may be a conflict between the desire of Purchaser to
acquire the CCPRs at the Purchase Price and the ultimate value of the
CCPRs at the end of the applicable payment stream. There can be no
assurance that the Purchase Price will exceed or fall below such ultimate
value.
The actual value that a Holder may realize by retaining the CCPRs and not
tendering in the Offer may exceed the Purchase Price. The Purchase Price
may not fully reflect the present value of the future sale of Neupogen.
Purchaser's determination of the Purchase Price is in part based upon
assumptions that may or may not prove to be true.
No independent person has been retained by Purchaser or any affiliate to
value or make any appraisal of the CCPRs or to render any opinion with
respect to the fairness of the Purchase Price and no representation is
made with respect to the fairness of the Purchase Price.
Purchaser believes that there is a limited market for resale of the CCPRs.
While the Offer represents an opportunity for any holder of CCPRs to
obtain liquidity, there can be no assurance that in the future a market
will not develop or that another party will not make an offer for the
CCPRs. Purchaser has no reason to believe that any such market will
develop. Purchaser has no current plans to make another tender offer for
the CCPRs.
A Holder may wish to tender CCPRs for a number of reasons:
OPPORTUNITY FOR LIQUIDITY. The Offer provides a Holder an
opportunity to liquidate his or her investment without transaction costs
or commissions. Although there are some limited resale mechanisms
available to a Holder, there is no formal trading market for the CCPRs and
there can be no assurance that one will develop.
CURRENT REALIZATION OF VALUE OF CCPRs. Quarterly payments on the
CCPRs will cease after the payment related to Neupogen sales in the fourth
quarter of 2005, after which Holders of CCPRs will no longer be entitled
to receive payments. The Offer provides an opportunity for Holders
currently to realize their investment in CCPRs. In the alternative, a
Holder may need to wait an additional 5.50 years to realize the full value
of the CCPR.
ESTATE PLANNING PURPOSES. The sale of a CCPR in connection with this
Offer provides current cash proceeds. Should the CCPRs become part of an
estate and need to be monetized at a future time, there can be no
assurance that at such time a market will exist or a current offer price
will be available.
ANTICIPATED SLOWER GROWTH IN NEUPOGEN SALES. Sales of Neupogen grew
rapidly following the product's launch in 1991, reaching $1.26 billion in
1999. As a mature product, Neupogen's sales growth has slowed and is
expected to remain slow as evidenced by Amgen's June 30, 1999 Form 10-Q,
"... cost containment pressures in the U.S. healthcare marketplace have
limited growth of domestic Neupogen sales. These pressures are expected to
continue to influence growth for the foreseeable future. The growth of the
colony stimulating factor ("CSF") market in the European Union ("EU") in
which Neupogen competes has remained essentially flat, principally due to
EU government pressures on physicians prescribing practices in response to
ongoing governmental initiatives to reduce healthcare expenditures.
Additionally, the Company faces competition from another granulocyte CSF
product. Amgen's CSF market share has remained relatively constant over
the least few years, however, the Company expects that the competitive
intensity may increase in the near future." Further, in Amgen's July 26,
2000 earnings press release, Amgen stated that "...[Amgen] now expects
Neupogen sales for the year [2000] to be approximately the same as last
year."
VALUE OF THE CCPRs DEPENDENT ON ONE PRODUCT. The value of the CCPRs
depends exclusively on the right to receive cash payments based on the
future sales of Neupogen. Accordingly, any factor which adversely affects
sales of Neupogen could adversely affect the amount of the cash payments
on CCPRs.
POSSIBLE TAX BENEFIT. A substantial portion of the Purchase Price
may be treated as a capital gain in the event that the Purchase Price
exceeds such Holder's basis. For individuals, trusts and estates, a
capital gain on the sale or exchange of property held for more than 12
months is generally subject to a maximum 20% tax rate. PURCHASER IS NOT
EXPRESSING AN OPINION AS TO THE TAX CONSEQUENCES OF TENDERING CCPRs.
INVESTORS ARE STRONGLY ADVISED TO CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES OF ACCEPTING THE OFFER.
2
VALUATION
The CCPRs represent the right to receive cash payments based on the
revenue of Neupogen, a product developed and marketed by Amgen as an adjunct to
chemotherapy. In determining the Purchase Price, Purchaser considered a number
of factors including its own estimates, on the basis of publicly available
information, of the potential future cash payments that may be produced by the
CCPRs throughout the remaining 5.5 year life of the payments, the risks inherent
in the future cash flows, the nature of the CCPRs, the CCPRs exclusive
dependence on the sales of a single product and the absence of any market for
the CCPRs. Purchaser is assuming the risk that its estimate of the potential
future cash payments will been realized. No third party was retained to value
the CCPRs or to render any fairness opinion with respect to the Purchase Price.
No other representation is made as to the fairness of the Purchase Price. No
other valuation analysis was performed or used, including any liquidation value
or net asset value analysis. In determining the Purchase Price, Purchaser
considered the absence of a secondary market for the CCPRs. Purchaser/affiliates
of Purchaser have previously purchased CCPRs (See Section 6 of the Offer to
Purchase) from time to time at prices per CCPR equivalent to or less than
(adjusting for distributions payable) the Purchase Price; however, in
determining the Purchase Price, Purchaser did not consider the prices paid for
such other purchases of CCPRs or the price paid for CCPRs by any third party.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment (and thereby purchase) up to
100 CCPRs that are validly tendered and not withdrawn in accordance with Section
4 prior to the Expiration Date. Holders are permitted to tender all or any
portion of the CCPRs owned by such Holder in quarters of CCPRs or any multiple
thereof. As used in the Offer, the term "Expiration Date" means 12:00 midnight,
New York City time, on October 20, 2000, unless Purchaser, in accordance with
the terms of the Offer, shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" means the latest time
and date at which the Offer, as so extended, expires. As used in this Offer to
Purchase, "business day" has the meaning set forth in Rule 14d-1(g) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Offer is not conditioned upon any minimum number of CCPRs being
tendered. The Offer is subject to certain other conditions set forth in Sections
2 and 14. The Purchaser expressly reserves the right (but will not be obligated)
to waive any or all of the conditions of the Offer. If, by the Expiration Date,
any or all of the conditions of the Offer are not satisfied or waived, Purchaser
reserves the right (but shall not be obligated) to (i) extend the period during
which the Offer is open and, subject to the rights of tendering Holders to
withdraw their CCPRs, retain all tendered CCPRs until the Expiration Date, (ii)
waive any or all of the conditions of the Offer and, subject to complying with
applicable rules and regulations of the Securities and Exchange Commission (the
"Commission"), accept for payment or purchase all validly tendered CCPRs and not
extend the Offer, or (iii) terminate the Offer and not accept for payment any
CCPRs and return promptly all tendered CCPRs to tendering Holders. Any
extension, delay in payment, termination or amendment may be made by giving oral
or written notice to the Depositary and will be followed as promptly as
practicable by public announcement, the announcement in the case of an extension
to be issued no later than 9:00 a.m., New York City time, on the next business
day after what would have been, absent extension, the Expiration Date. Without
limiting the manner in which the Purchaser may choose to make such public
announcement, except as provided by applicable law (including Rules 14d-4(c) and
14d-6(d) under the Exchange Act), the Purchaser will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a release to the Dow Jones News Service or other national news
service.
Following the expiration of the Offer or, in the event that the Offer is
not consummated, Purchaser may seek to acquire CCPRs through privately
negotiated transactions or otherwise, upon such terms and conditions and at such
prices as it shall determine, which may be more or less than the Purchase Price
and could be for cash, other consideration or any combination thereof.
3
The Commission has announced that, under its interpretation of Rules
14d-4(c) and 14d-6(d) under the Exchange Act, material changes in the terms of a
tender offer or information concerning a tender offer may require that the
tender offer be extended so that it remains open a sufficient period of time to
allow Holders to consider such material changes or information in deciding
whether or not to tender or withdraw their securities. The minimum period during
which the Offer must remain open following material changes in the terms of the
Offer or information concerning the Offer, other than a change in price or a
change in percentage of securities sought, will depend upon the facts and
circumstances, including the relative materiality of the terms or information.
If Purchaser decides to increase or decrease the consideration in the Offer or
to make a change in the percentage of CCPRs sought and if, at the time that
notice of any such change is first published, sent or given to Holders, the
Offer is scheduled to expire at any time earlier than the tenth business day
after (and including) the date of that notice, the Offer will be extended at
least until the expiration of that period of ten business days.
2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT
If the number of CCPRs validly tendered (and not properly withdrawn) on or
before the Expiration Date is greater than 100 CCPRs, the Purchaser will accept
for payment (and thereby purchase) only 100 CCPRs. The Purchaser will acquire
the CCPRs pro rata to the number of CCPRs validly tendered (and not properly
withdrawn) on or before the Expiration Date, with appropriate adjustments to
avoid purchases in multiples of other than quarter CCPRs. If the number of CCPRs
validly tendered (and not properly withdrawn) on or before the Expiration Date
is not greater than 100 CCPRs, Purchaser will purchase all CCPRs validly
tendered (and not properly withdrawn) on or before the Expiration Date, upon the
terms and subject to the conditions of the Offer.
In the event that proration is required, Purchaser may not be able to
announce the final results of such proration until at least ten business days
after the Expiration Date. Subject to the Purchaser's obligation under Rule
14e-1(c) under the Exchange Act to pay Holders the Purchase Price in respect of
CCPRs tendered or return those CCPRs promptly after the termination or
withdrawal of the Offer, the Purchaser does not intend to pay for any CCPRs
accepted for payment pursuant to the Offer until the final proration results are
known.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment) and, subject to the foregoing paragraphs, Purchaser will accept
for payment (and thereby purchase) and pay for all CCPRs which are validly
tendered prior to the Expiration Date (and not properly withdrawn), promptly
after the later to occur of (i) the Expiration Date or (ii) the date of
satisfaction or waiver of all the conditions to the Offer set forth in this
Offer to Purchase. Subject to the applicable rules of the Commission, Purchaser
expressly reserves the right to delay acceptance for payment of or payment for
CCPRs pending receipt of any regulatory approval specified in Section 15 or in
order to comply, in whole or in part, with any other applicable law or
government regulation. See Sections 14 and 15.
In all cases, payment for CCPRs purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed with
notarized signatures, (ii) any other required documents, and (iii) written
notice from Amgen confirming transfer of tendered CCPRs.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment and thereby purchased CCPRs validly tendered and not properly withdrawn
if and when Purchaser gives oral or written notice to the Depositary of
Purchaser's acceptance of such CCPRs for payment. Payment for CCPRs accepted
pursuant to the Offer will be made by deposit of the Purchase Price with the
Depositary, which will act as agent for tendering Holders for the purpose of
receiving payment from Purchaser and transmitting payment to tendering Holders.
Upon the deposit of funds with the Depositary for the purpose of making payments
to tendering Holders, Purchaser's obligation to make such payment shall be
satisfied and tendering Holders must thereafter look solely to the Depositary
for payment of amounts owed to them by reason of the acceptance for payment of
CCPRs pursuant to the Offer. Purchaser will pay any transfer taxes incident to
the transfer to it of validly tendered CCPRs, as well as any charges and
expenses of the
4
Depositary and the Information Agent. Under no circumstances will interest
accrue on the consideration to be paid for the CCPRs by Purchaser, regardless of
any delay in making such payment.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid per CCPR pursuant to the Offer, Purchaser will pay the increased
consideration for all the CCPRs purchased pursuant to the Offer, whether or not
the CCPRs were tendered prior to the increase in consideration. Purchaser does
not currently expect to increase the consideration to be paid per CCPR pursuant
to the Offer.
Purchaser reserves the right to transfer or assign, in whole at any time,
or in part from time to time, to one or more of its affiliates, the right to
purchase all or any portion of the CCPRs tendered pursuant to the Offer,
provided that any such transfer or assignment will not relieve Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
Holders to receive payment for CCPRs validly tendered and accepted for payment
pursuant to the Offer. The Purchaser has no current intention to effect such a
transfer or assignment.
3. PROCEDURE FOR TENDERING FOR CCPRs
Valid Tenders. In order for a Holder to tender his or her CCPRs pursuant
to the Offer, a properly completed and duly executed Letter of Transmittal with
the required notarized signatures and any other required documents must be
received by the Depositary at the Depositary's address set forth on the back
cover of this Offer to Purchase prior to the Expiration Date.
A tender of CCPRs will constitute an acceptance by the tendering Holder of
the terms and conditions of the Offer, as well as the tendering Holder's
representation and warranty that (i) such Holder owns the CCPRs being tendered,
(ii) such Holder has full power and authority to tender, sell, assign and
transfer such CCPRs, and (iii) when such CCPRs are accepted for payment by the
Purchaser, the Purchaser will acquire good, marketable and unencumbered title
thereto including the right to receive all payments with respect to the CCPRs,
free and clear of all liens, restrictions, charges and encumbrances and will not
be subject to any adverse claim. The Purchaser's acceptance for payment of CCPRs
tendered pursuant to the Offer will constitute a binding agreement between the
tendering Holder and the Purchaser upon the terms and subject to the conditions
of the Offer.
Determination Of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of CCPRs pursuant to any of the procedures described above will be
determined by Purchaser in its sole discretion, which determination shall be
final and binding on all parties. Purchaser reserves the absolute right to
reject any or all tenders of CCPRs determined not to be in proper form or the
acceptance of or payment for which may, in the opinion of counsel, be unlawful
and reserves the absolute right to waive any defect or irregularity in any
tender of CCPRs. Purchaser also reserves the absolute right to waive or amend
any or all of the conditions of the Offer. Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and its
instructions) will be final and binding on all parties. No tender of CCPRs will
be deemed to have been validly made, until all defects and irregularities have
been cured or waived. None of Purchaser, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any such
notification.
Appointment As Proxy. By executing and delivering the Letter of
Transmittal, a tendering Holder irrevocably appoints designees of Purchaser as
his or her attorneys-in-fact and proxies, with full power of substitution, in
the manner set forth in the Letter of Transmittal, to the full extent of the
Holder's rights with respect to the CCPRs (and with respect to any and all other
securities issued or issuable in respect of such CCPRs on or after the date
hereof) tendered by the Holder. Absent the withdrawal by the tendering Holder in
accordance with the terms hereof, as more particularly described in Section 4
below, all such powers of attorney and proxies will be considered coupled with
an interest in the tendered CCPRs and all prior powers of attorney and proxies
given by the Holder with respect to the CCPRs will be revoked, without further
action, and no subsequent powers of attorney and proxies may be given (and, if
given, will not be deemed effective) by the Holder. Designees of Purchaser will
be empowered to exercise all rights of the
5
Holder with respect to such CCPRs as they in their sole discretion may deem
proper, including, without limitation, in respect of any annual or special
meeting of the Holders, or any adjournment or postponement of any such meeting,
or in connection with any action by written consent in lieu of any such meeting
or otherwise. Purchaser reserves the absolute right to require that, in order
for CCPRs to be validly tendered, immediately upon Purchaser's acceptance for
payment of the CCPRs, Purchaser must be able to exercise full rights with
respect to the CCPRs. Purchaser must obtain the consents of Amgen for the
transfer of the CCPRs to Purchaser and Amgen's consent to pay directly into a
collection account controlled by a collateral agent to which Purchaser has
pledged a security interest in the CCPRs on behalf of Lender (defined herein) in
order for Purchaser to accept the tender of the CCPRs.
A tender of CCPRs pursuant to any of the procedures described above will
constitute the tendering Holder's acceptance of the terms and conditions of the
Offer. Purchaser's acceptance for payment of CCPRs tendered pursuant to the
Offer will constitute a binding agreement between the tendering Holder and
Purchaser upon the terms and conditions of the Offer.
The Depositary has agreed to act as such for the convenience of the
Purchaser. The Depositary will act upon the instructions of the Purchaser and
will deliver all documents deposited with it as instructed by the Purchaser. The
Depositary has no obligation to any Holder who tenders CCPRs. If any controversy
arises between the Purchaser and any other person concerning the CCPRs or
concerning this Offer to Purchase, the Letter of Transmittal, or the subject
matter of any thereof, the Depositary will not be required to determine the
controversy or to take any action regarding it. The Depositary may hold all
documents and property and may wait for settlement of any such controversy by
final appropriate legal proceedings or other means as, in the Depositary's
discretion, may be required, notwithstanding any other provision of this Offer
to Purchase or the Letter of Transmittal. In such event, the Depositary will not
be liable for any interest, damages or expenses. Furthermore, the Depositary may
at its option, file an action of interpleader requiring such persons to answer
and litigate any claims and rights among themselves. The Depositary is
authorized to deposit with the clerk of the court all documents and property
held. Upon initiating such action, the Depositary shall be fully released and
discharged of and from all obligations and liabilities involving the documents
or property, except for obligations and liabilities arising by reason of the
prior gross negligence or willful misconduct on the part of the Depositary.
4. WITHDRAWAL RIGHTS
Tenders of CCPRs made pursuant to the Offer are irrevocable, except as
otherwise provided in this Section 4. CCPRs tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by Purchaser as provided in this Offer to Purchase, may
also be withdrawn at any time after November 9, 2000. If Purchaser extends the
Offer, is delayed in its purchase of or payment for CCPRs, or is unable to
purchase or pay for CCPRs for any reason, then, without prejudice to the rights
of Purchaser, tendered CCPRs may be retained by the Depositary on behalf of
Purchaser and may not be withdrawn, except to the extent that tendering Holders
are entitled to withdrawal rights as set forth in this Section 4.
The reservation by Purchaser of the right to delay the acceptance or
purchase of or payment for CCPRs is subject to the provisions of Rule 14e-1(c)
under the Exchange Act, which requires Purchaser to pay the consideration
offered or to return CCPRs deposited by or on behalf of Holders promptly after
the termination or withdrawal of the Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be received by the Depositary prior to
the expiration of the Offer at its address set forth on the back cover of this
Offer to Purchase. Any such notice of withdrawal must specify the name of the
persons who tendered the CCPRs to be withdrawn, the number of CCPRs to be
withdrawn and the name of the registered Holder, if different from that of the
person who tendered the CCPRs. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by
Purchaser, in its sole discretion, whose determination will be final and binding
on all parties. No withdrawal of CCPRs will be deemed to have been made properly
until all defects and irregularities have been cured or waived. None of
Purchaser, the Depositary, the Information Agent or any other person will be
under any duty to
6
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failing to give such notification.
Withdrawals may not be revoked and any CCPRs properly withdrawn will be
deemed not validly tendered for purposes of the Offer, but may be tendered at
any subsequent time prior to the Expiration Date by following any of the
procedures described in Section 3 above.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER
The following is a general discussion of certain United States federal
income tax consequences of a sale of the CCPRs pursuant to the Offer. This
summary is of a general nature only and does not discuss all aspects of United
States federal income taxation that may be relevant to each particular Holder in
light of such Holder's particular circumstances. In addition, the summary does
not discuss aspects of United States federal income taxation that may be
relevant to Holders subject to special treatment under the United States federal
income tax laws, such as foreign persons, dealers in securities, insurance
companies, tax-exempt organizations, banks, thrifts, regulated investment
companies or Holders that do not hold CCPRs as capital assets (within the
meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the
"Code")). This summary is based on the Code, Treasury regulations thereunder,
and the administrative and judicial interpretations thereof, as of the date
hereof, all of which are subject to change, possibly on a retroactive basis.
This summary assumes that (i) the Purchase Price received by a Holder in
connection with such sale not otherwise constituting imputed interest or
ordinary income required to be recognized under Section 751 of the Code (i.e.,
gain attributable to certain inventory items and "unrealized receivables" of
ACPLP) qualifies for capital gain treatment under the Code, and (ii) neither the
Class A Interests in ACPLP nor the CCPRs were or are traded on an established
securities market.
In general, the United States federal income tax consequences to a Holder
who sells CCPRs pursuant to this Offer will depend, in whole or in part, on the
original exchange transaction whereby Amgen issued the CCPRs to the holders of
Class A Interests in ACPLP in exchange for their Class A Interests. Among other
things, the character of gain or loss on the sale of CCPRs pursuant to the
Offer, the time or times, if any, at which a Holder must include interest in
income (and the amount of such interest income), and the application of rules
applicable to dispositions of installment obligations will be determined by the
United States federal income tax treatment applicable to dispositions of Class A
Interests in ACPLP in exchange for Advance Payments and CCPRs.
EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO SUCH HOLDER OF SELLING CCPRs PURSUANT TO THIS OFFER. THIS
SUMMARY DOES NOT DISCUSS ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF SELLING
CCPRs PURSUANT TO THIS OFFER.
A. United States federal income tax consequences to original Holders who
sell CCPRs pursuant to this Offer
In exchange for their Class A Interests in ACPLP, Holders that were formerly
holders of Class A Interests in ACPLP received CCPRs from Amgen upon Amgen's
exercise of the Partnership Purchase Option (the "Amgen Purchase"). Whether or
not the CCPRs constitute debt instruments for United States federal income tax
purposes, the United States federal income tax consequences to Holders from
their sale of CCPRs and receipt of the Purchase Price pursuant to this Offer
should be as described below in this Section A. THE DISCUSSION IN THIS SECTION
A. APPLIES ONLY TO THOSE ORIGINAL HOLDERS WHO WERE FORMERLY HOLDERS OF CLASS A
INTERESTS IN ACPLP.
In general, the Code provides that payments under an installment sales
contract (whether or not such contract is a debt instrument) that does not
provide for adequate stated interest will be recharacterized, in part, as
interest. In the case of an installment sales contract which provides for one or
more contingent
7
payments (such as the CCPRs), the current Treasury regulations provide that each
contingent payment under such contract must be bifurcated with a portion of such
payment required to be treated as "principal" and the remaining portion required
to be treated as "interest". The "principal" portion of each contingent payment
is determined, in general, by discounting the payment at the "test rate" of
interest (generally, the applicable federal rate) from the date that the payment
is made to the date that the installment sales contract was issued or entered
into, with the remaining portion of such payment constituting interest. Any
interest (or amount treated as interest) is taken into account by a taxpayer
when the right to the contingent payment becomes fixed or, if the installment
sales contract is not a debt instrument, in accordance with the taxpayer's
regular method of accounting.
Upon a holder's sale of an installment sale contract, the holder of such
contract must allocate the amount received from such sale first to the
noncontingent component of such contract (and, in the case of a CCPR, there is
no remaining noncontingent component), and then to the contingent component of
such contract. The amount allocated to the contingent component is treated as a
contingent payment that is made on the date of the sale and is characterized as
unstated interest and principal under the rules described above.
The Treasury regulations on contingent payment installment sale contracts
apply to sales and exchanges that occur on or after August 13, 1996.
In accordance with the foregoing, a Holder that sells a CCPR pursuant to
this Offer will, in general, recognize gain or loss equal to the difference
between the (i) Holder's "amount realized" from such sale, and (ii) the Holder's
adjusted tax basis in the sold CCPR. In general, a Holder's "amount realized"
from the sale of a CCPR pursuant to this Offer is equal to the portion of the
Purchase Price received by the Holder for such CCPR that is treated as
"principal" under the rules described above. Thus, the "principal" portion of
the Purchase Price will equal the present value of the Purchase Price,
determined by discounting the Purchase Price by the appropriate "applicable
federal rate" from the date of the sale of the CCPR to the date of the Amgen
Purchase (i.e., March 12, 1993). The remaining portion of the Purchase Price
will be taxable as ordinary interest income (currently subject to a maximum
39.6% income tax rate for non-corporate taxpayers and a maximum 35% income tax
rate for corporate taxpayers).
Although the above-described Treasury regulations on contingent payment
installment sales contracts apply to sales or exchanges that occur on or after
August 13, 1996 -- which is after the date that the CCPRs were issued by Amgen
in exchange for the Class A Interests in ACPLP (i.e., March 12, 1993), a Holder
should nonetheless be able to rely on these regulations for purposes of
determining the "principal" and "interest" portions of the Purchase Price. The
preamble to the applicable Treasury regulations provides that for a contingent
payment debt instrument issued before August 13, 1996, a taxpayer may use any
reasonable method to account for such instrument, including a method that would
have been required under proposed Treasury regulations when the debt instrument
was issued. Accordingly, a Holder may account for a CCPR, and the sale of the
CCPR pursuant to this Offer, using any reasonable method. However, in the event
that a Holder has been using a particular method (not described in the
above-described Treasury regulations) to account for a CCPR and the payments
previously received by the Holder from Amgen in respect of such CCPR, then such
Holder may be required to continue to use such method in accounting for the
Purchase Price received from the sale of such CCPR pursuant to this Offer.
To the extent that, at the time of the Amgen Purchase, a Holder had held
its Class A Interest in ACPLP as a capital asset and for more than the long-term
capital gain holding period, the difference between the "principal" portion of
the Purchase Price that a Holder receives for a CCPR pursuant to this Offer over
the Holder's adjusted tax basis in such CCPR generally will constitute long-term
capital gain. However, long-term capital gain treatment may not be available
under Section 751 of the Code with respect to the portion (if any) of the
"principal" amount that is attributable to certain inventory items and
"unrealized receivables" of ACPLP that the Holder has not previously recognized.
A non-corporate Holder, such as an individual, trust or estate, is
currently subject to a maximum 20% tax rate on any capital gain recognized by
such a Holder on the sale of a CCPR pursuant to this Offer (assuming that the
Holder had held its Class A Interest in ACPLP as a capital asset and for more
than 12
8
months). A non-corporate Holder may deduct any capital loss recognized on such
sale only to the extent of such Holder's capital gains plus up to $3,000 of
ordinary income. Any capital loss that a non-corporate Holder is unable to use
in the current tax year generally can be carried forward to such Holder's
succeeding tax years indefinitely, but cannot be carried back to such a Holder's
prior taxable years.
A corporate Holder is subject to a maximum 35% tax rate on any capital
gain or interest income recognized by such a Holder on the sale of a CCPR
pursuant to this Offer. A corporate Holder may only offset a capital loss
recognized on such sale against the capital gains of such Holder. Any capital
loss that a corporate Holder is unable to use in the current tax year may be
carried back three taxable years and carried forward five taxable years of such
Holder.
B. United States federal income tax consequences to those Holders, other
than original Holders, who sell CCPRs pursuant to this Offer
THE DISCUSSION BELOW IN THIS SECTION B ADDRESSES THOSE HOLDERS SELLING
CCPRs PURSUANT TO THIS OFFER WHO WERE NOT ORIGINAL HOLDERS OF THE CCPRs
("SECONDARY HOLDERS") - E.G, HOLDERS WHO PURCHASED THEIR CCPRs FROM PREVIOUS
HOLDERS, AND WHO DID NOT RECEIVE ITS CCPRs FROM AMGEN.
1. Treatment of Purchase Price as part principal, part interest
in the manner described in A. above (except with respect to
interest attributable to the period prior to a Secondary
Holder's purchase of CCPR)
The likely United States federal income tax treatment of a Secondary
Holder's receipt of the Purchase Price upon its sale of a CCPR pursuant to this
Offer should generally be the same as described above with respect to original
Holders. Accordingly, a Secondary Holder would recognize capital gain or loss on
the sale of a CCPR pursuant to this Offer equal to the difference between the
(i) Secondary Holder's "amount realized" from such sale, and (ii) Secondary
Holder's adjusted basis in the CCPR sold. This discussion assumes that the CCPR
constitutes a capital asset in the hands of the Secondary Holder. As discussed
below, excepted from this treatment would be the portion of the "interest"
component of the Purchase Price that is attributable to the period prior to a
Secondary Holder's acquisition of such CCPR ("Previously Accrued Interest").
The Secondary Holder's "amount realized" from such sale would equal the
"principal" portion of the Purchase Price. The "principal" portion of the
Purchase Price would equal the present value of the Purchase Price determined by
discounting the Purchase Price at the appropriate "applicable federal rate" from
the date of such sale to the date of original issuance of the CCPR (i.e., March
12, 1993). The remaining portion of the Purchase Price would constitute
"interest". Although not entirely free from doubt, a Secondary Holder should be
able to treat the portion of such interest which constitutes Previously Accrued
Interest, as well as the portion of each payment that the Secondary Holder
previously received from Amgen in respect of the CCPR and which constitutes
Previously Accrued Interest (i) first, as a return of the Secondary Holder's
adjusted basis in the Previously Accrued Interest, and (ii) once such basis is
fully recovered, as capital gain income, (and as long-term capital gain income
if the CCPR has been held by the Secondary Holder for more than 12 months). If,
after accounting for the Purchase Price, not all of the adjusted basis in the
Previously Accrued Interest has been fully recovered, then the Secondary Holder
should be able to deduct such remaining basis as a capital loss (and as a
long-term capital loss if the CCPR was held by the Secondary Holder for more
than 12 months).
A Secondary Holder's adjusted basis in a CCPR being sold pursuant to this
Offer would equal the Secondary Holder's initial basis in such CCPR reduced by
the aggregate of the "principal" portions of each of the payments received by
the Secondary Holder from Amgen in respect of the CCPR. In determining a
Secondary Holder's initial basis in a CCPR, the Secondary Holder would allocate
such initial basis between "principal" and Previously Accrued Interest, with the
"principal" amount being determined by discounting the Secondary Holder's
initial basis at the appropriate "applicable federal rate" from the date that
the Secondary Holder acquired the CCPR to the date of issuance of the CCPR
(i.e., March 12, 1993). The Secondary Holder would treat its remaining initial
basis as Previously Accrued Interest.
9
Finally, the portion of the Purchase Price received by a Secondary Holder
pursuant to this Offer which is recharacterized as interest and which is
allocable to the period during which the Secondary Holder has held the CCPR
would constitute ordinary interest income to the Secondary Holder.
2. Treatment of Purchase Price as amount paid for separate
property right previously purchased by Secondary Holder
It is possible that a Secondary Holder's sale of a CCPR pursuant to this
Offer could be treated as a sale of a separate property right (not constituting
a debt instrument or installment obligation for United States federal income tax
purposes), whereby no portion of the Purchase Price would be allocable to
interest. In such event, the Secondary Holder would recognize gain or loss equal
to the difference between (i) the Secondary Holder's amount realized from such
sale and (ii) the Secondary Holder's adjusted basis in the CCPR sold. For this
purpose, a Secondary Holder's adjusted basis in the CCPR would equal the
Secondary Holder's original purchase price for such CCPR reduced (but not below
zero) by the aggregate amount of payments previously received by the Secondary
Holder from Amgen in respect of such CCPR.
Any gain or loss recognized by the Secondary Holder would constitute a
capital gain or loss (again, assuming that the CCPR is held by the Secondary
Holder as a capital asset), and as a long-term capital gain or loss assuming
that such CCPR was held by the Secondary Holder for more than 12 months at the
time of the sale.
SECONDARY HOLDERS SHOULD BE ADVISED THAT AMGEN, AS THE ISSUER OF AND
OBLIGOR ON THE CCPRS, HAS TREATED AND REPORTED A PORTION OF EACH PAYMENT THAT IT
HAS MADE IN RESPECT OF THE CCPRS AS INTEREST. WE HAVE BEEN ADVISED THAT AMGEN
WILL CONTINUE THIS TREATMENT AND REPORTING. THE PURCHASER ALSO INTENDS TO TREAT
THE CCPRS THE SAME WAY AND WILL THUS TREAT AND REPORT A PORTION OF THE PURCHASE
PRICE PAID FOR EACH CCPR AS INTEREST. THUS, IF A SECONDARY HOLDER TAKES THE
POSITION DISCUSSED IN THIS SECTION B.2, THE SECONDARY HOLDER WOULD BE TAKING A
POSITION THAT IS INCONSISTENT WITH THE POSITION BEING TAKEN BY AMGEN AND THE
PURCHASER.
C. Withholding Taxes (including backup withholding)
The Purchaser shall, to the extent required under applicable law, withhold
the appropriate amount of United States federal income tax from the Purchase
Price paid to a Holder (including a Secondary Holder) that the Purchaser is
required to withhold, unless the Holder (including a Secondary Holder) that
would otherwise be subject to such withholding furnishes to the Purchaser the
appropriate certifications and/or documentation to establish such Holder's
(including Secondary Holder's) exemption from such withholding (e.g., under an
applicable treaty provision) and the Holder (including a Secondary Holder)
otherwise establishes its entitlement to such exemption to the satisfaction of
the Purchaser.
In addition, Holders (including Secondary Holders), other than
corporations and certain foreign individuals, who tender CCPRs may be subject to
31% backup withholding unless a Holder (including a Secondary Holder) provides a
taxpayer identification number ("TIN") and certifies that the TIN is correct or
properly certifies that such Holder (including a Secondary Holder) is awaiting a
TIN. A Holder (including a Secondary Holder) may avoid backup withholding by
properly completing and signing the Substitute Form W-9 included as part of the
Letter of Transmittal. IF A HOLDER (INCLUDING A SECONDARY HOLDER) WHO IS SUBJECT
TO BACKUP WITHHOLDING DOES NOT PROPERLY COMPLETE AND SIGN THE SUBSTITUTE FORM
W-9, THE PURCHASER WILL WITHHOLD 31% FROM PAYMENTS TO SUCH HOLDER (INCLUDING
SECONDARY HOLDER). SEE INSTRUCTION 4 TO THE LETTER OF TRANSMITTAL.
10
D. Possible Legislative Tax Changes
There have been a number of proposals made in Congress and by the Treasury
Department and other government agencies for changes in the United States
federal income tax laws. In addition, the Internal Revenue Service has proposed
and may still be considering changes in regulations and procedures. It is likely
that further proposals will be forthcoming or that previous proposals will be
revived in some form in the future. It is impossible to predict with any degree
of certainty what past proposals may be revived or what new proposals may be
forthcoming, the likelihood of adoption of any such proposals, the likely effect
of any such proposals upon the sale of CCPRs, or the effective date of any
legislation or regulatory changes which may derive from any such past or future
proposals. Holders are strongly urged to consider ongoing developments in this
uncertain area.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY. HOLDERS (INCLUDING SECONDARY
HOLDERS) SHOULD CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE UNITED STATES
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF ACCEPTING THE OFFER.
6. PRICE RANGE OF THE CCPRs
There is no established trading market for the CCPRs. The chart set forth
below details certain transactions relating to the CCPRs and fractions thereof
that have occurred from time to time from September 17, 1996 to present:
- ------------------------------------------------------------------------------------------------------------
Date(s) of Offer Purchaser Amount of Units (Per Unit) Offer Price
Purchased
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
September 17, 1996 Pharmaceutical Partners III n/a $180,405 *
L.L.C.
- ------------------------------------------------------------------------------------------------------------
August 21, 1997 PharmaInvest L.L.C. 50.125 $240,000
- ------------------------------------------------------------------------------------------------------------
September 29, 1999 PharmaInvest L.L.C. 2.125 $220,000
- ------------------------------------------------------------------------------------------------------------
March 17, 2000 Meridian Venture Capital, LLC 2.277 $257,721 **
- ------------------------------------------------------------------------------------------------------------
June 2000 Meridian Venture Capital, LLC 0.500 $285,284 ***
- ------------------------------------------------------------------------------------------------------------
June 2, 2000 Meridian Venture Capital, LLC 0.621 $242,687 ****
- ------------------------------------------------------------------------------------------------------------
July through August, 2000 Meridian Venture Group, LLC 2.500 $285,284 ***
- ------------------------------------------------------------------------------------------------------------
* The offer price was $420 per fractional unit, which is equivalent to a
unit price of $180,405 per CCPR;
** The offer price was $600 per fractional unit, which is equivalent to a
unit price of $257,721 per CCPR;
*** Includes rights to the $20,433 per CCPR August 2000 distribution f/q/e
June 30, 2000 made by Amgen; and
**** The offer price was $565 per fractional unit, which is equivalent to a
unit price of $242,687 per CCPR. This offer price was reduced from the
prior offer price made in March 2000 by approximately the distribution
declared or made during the period between both offers.
Purchaser is not aware of any public market for the CCPRs. Holders are
advised that the sales prices received by sellers of CCPRs in the secondary
market transactions may not reflect the actual value of the CCPRs in light of
the limited trading in the market and that such prices are significantly
discounted from the values of the assets underlying the CCPRs. The Purchase
Price represents the price at which the Purchaser is willing to purchase CCPRs.
No independent person has been retained to evaluate or render any opinion with
respect to the fairness of the Purchase Price and no representation is made by
the Purchaser or any affiliate of the Purchaser as to such fairness. Purchaser
did not attempt to obtain current
11
independent valuations or appraisals of the CCPRs. Purchaser made its own
determination of the Purchase Price based on publicly available information.
Other measures of the value of the CCPRs may be relevant to Holders. HOLDERS ARE
URGED TO CONSIDER CAREFULLY ALL OF THE INFORMATION CONTAINED HEREIN AND CONSULT
WITH THEIR OWN ADVISORS, TAX, FINANCIAL OR OTHERWISE, IN EVALUATING THE TERMS OF
THE OFFER BEFORE DECIDING WHETHER TO TENDER CCPRs.
7. EFFECT OF THE OFFER ON EXCHANGE ACT REGISTRATION
The CCPRs are currently registered under the Exchange Act. Such
registration may be terminated upon application of Amgen to the Commission if
the CCPRs are neither listed on a national securities exchange nor held by 300
or more holders of record. Termination of the registration of the CCPRs under
the Exchange Act would substantially reduce the information required to be
furnished by Amgen to Holders and to the Commission and would make certain of
the provisions of the Exchange Act no longer applicable to the CCPRs. Purchaser
has no current plans to seek to cause Amgen to terminate such registration.
8. CERTAIN INFORMATION CONCERNING CONTRACTUAL CONTINGENT PAYMENT RIGHTS
Amgen Clinical Partners, L.P. ("ACPLP" or the "Partnership") was formed in
1987 to finance the clinical development of granulocyte colony stimulating
factor, or G-CSF, (trade name Neupogen(R)) and certain growth factors. Neupogen
was approved by the United States Food and Drug Administration ("FDA") in 1990
for use as an adjunct to chemotherapy. Neupogen stimulates the immune system by
causing the production of white blood cells in patients whose immune system has
been impaired by chemotherapy. Neupogen was commercially introduced in 1991 and
is marketed by Amgen in North America and Australia and by AMRO (an Amgen-F.
Hoffmann-La Roche Ltd joint venture) in the European Union. None of the other
growth factors under development by the Partnership was successfully developed.
In March 1993, Amgen exercised the Partnership Purchase Option (the "PPO")
and purchased all the outstanding limited partnership interests in ACPLP
pursuant to the Partnership Purchase Agreement (the "PPA") for a cash payment
(the "Advance Payment") of $25,000 and a contingent payment right (the "CCPR").
The CCPR entitles a Holder to receive cash payments based on the sales of
Neupogen in certain territories through 2005. The terms of such payments are set
forth in more detail in the PPA, which may be obtained upon request from the
Purchaser.
Since Neupogen's introduction in 1991, sales have grown rapidly to a level
of $1,257 million in 1999. The following table illustrates the sales of Neupogen
as reported in the corresponding Amgen Form 10-K. The chart also shows yearly
growth rates for Neupogen sales from 1992 to 1999.
Historical Neupogen Sales
- --------------------------------------------------------------------------------
Period Sales (millions) Growth Rate
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1991 $ 233 N/A
- --------------------------------------------------------------------------------
1992 544 133.5 %
- --------------------------------------------------------------------------------
1993 719 32.2 %
- --------------------------------------------------------------------------------
1994 829 15.3 %
- --------------------------------------------------------------------------------
1995 936 12.9 %
- --------------------------------------------------------------------------------
1996 1,016 8.6 %
- --------------------------------------------------------------------------------
1997 1,056 3.9 %
- --------------------------------------------------------------------------------
1998 1,117 5.8 %
- --------------------------------------------------------------------------------
1999 1,257* 12.5 %
- --------------------------------------------------------------------------------
* Sales were higher than usual due to Y2K inventory stocking.
12
The quarterly distributions are primarily based on Amgen's sales in the
U.S., on AMRO (AMRO is a joint venture between Amgen and F. Hoffman La-Roche
Ltd) sales in Europe, and sales in certain eastern European countries.
Historically, approximately 90% of these quarterly distributions resulted from
U.S. sales of which Holders receive 7% versus 2% of the non-U.S. sales.
The chart illustrates that the rate of growth in Neupogen sales has
increased in each of the last three years. However, in the recently published
Annual Report on March 7, 2000 on Form 10-K, Amgen stated that "Future Neupogen
sales increases are dependent primarily upon further penetration of existing
markets, the timing and nature of additional indications for which the product
may be approved and the effects of competitive products. Although not approved
or promoted for use in Amgen's domestic or foreign markets, except for
Australia, the Company believes that approximately 10% of its worldwide Neupogen
sales are from off-label use as a supportive therapy in various AIDS-related
treatments. Changes in AIDS therapies, including therapies that may be less
myelosuppressive, are believed to have adversely affected and are expected to
continue to adversely affect such sales. Neupogen usage is expected to continue
to be affected by cost containment pressures on health care providers worldwide.
In addition, international Neupogen sales will continue to be subject to changes
in foreign currency exchange rates and government budgets." In Amgen's July 26,
2000 earnings press release, Amgen stated that " ... [Amgen] now expects
Neupogen sales for the year [2000] to be approximately the same as last year."
AVAILABLE INFORMATION. ACPLP was acquired by Amgen in March 1993 and is no
longer subject to the informational filing requirements of the Exchange Act.
Amgen is subject to the information filing requirements of the Exchange Act. In
accordance with the requirements of the Exchange Act, Amgen files periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Such reports, proxy
statements and other information may be inspected at the Commission's office at
450 Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection and copying at the regional offices of the Commission located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; 7 World Trade Center, 13th Floor, New York, New York 10048
and 90 Devonshire Street, Suite 700, Boston, Massachusetts 02109. Copies may be
obtained upon payment of the Commission's prescribed fees by writing to its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
material can also be obtained at the office of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006-1506. In
addition, the Commission maintains a Web site (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER
Purchaser, a Delaware limited liability company, was formed in December of
1999 to identify, acquire and hold contingent payment rights of pharmaceutical
companies. The business address and telephone number of Purchaser is Meridian
Venture Group, LLC, 767 Fifth Avenue, 4th Floor, New York, New York 10153, (212)
688-2015. Meridian Venture Capital, LLC, a Delaware limited liability company
("MVC"), was formed to acquire a membership interest in Purchaser and to
contribute any contingent payment obligations which it may acquire from
pharmaceutical companies or individuals to Purchaser. The business address and
telephone number of MVC is Meridian Venture Capital, LLC, 767 Fifth Avenue, 4th
Floor, New York, New York 10153, (212) 688-2015. Meridian Venture Capital, LLC
delegated its rights, powers and duties as manager concerning the making of a
tender offer and the purchase, sale, holding, and exercise of all rights with
respect to CCPRs on behalf of Purchaser to Meridian Venture Group Management
Ltd., a New York corporation ("MVGM"). The business address and telephone number
of MVGM is Meridian Venture Group Management Ltd., 767 Fifth Avenue, 4th Floor,
New York, New York 10153, (212) 688-2015. Schedule 1 hereto identifies the name,
present principal occupation or employment and material occupation, positions,
offices or employment for the officers and directors of MVGM.
During the last five years, neither Purchaser, MVC, MVGM, or to the best
knowledge of Purchaser, any individual listed on Schedule I hereto have (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to any judicial or administrative proceeding
that resulted in a judgment, decree or final order enjoining Purchaser, MVC or
MVGM from
13
future violations of, or prohibiting activities subject to, federal or state
securities laws, or finding any violation of federal or state security laws.
Except as described below, neither Purchaser, MVC, MVGM or, to the best
knowledge of the Purchaser, any individual listed on Schedule I hereto
beneficially owns or has a right to acquire any CCPRs and neither has effected
any transaction in the CCPRs during the past 60 days.
Purchaser and its affiliates have acquired a total of three CCPRs over the
past three months, with the most recent transaction being effected on August 8,
2000. Purchaser also owns fractional CCPRs that represent a right to receive a
portion of the quarterly distributions attributable to the CCPRs formerly held
by the former limited partners of Paine Webber R&D Partners, L.P., a limited
partnership that distributed these rights to its holders in 1994. On an
equivalent basis, the fractional CCPRs owned by Purchaser represent
approximately 2.9 CCPRs. The most recent purchase of the fractional CCPRs was
closed in August, 2000.
Except as described in this Offer to Purchase, (i) neither Purchaser, MVC,
MVGM or, to the best knowledge of the Purchaser, any individual listed on
Schedule I, has any contract, arrangement, understanding or relationship
(whether or not legally enforceable) with any other person with respect to any
CCPRs, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any CCPRs, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies and (ii) there
have been no contact, negotiations or transactions between Purchaser, MVC, MVGM
or, to the best knowledge of the Purchaser, any individual listed on Schedule I
on the one hand, and Amgen and/or any of its affiliates, on the other hand,
concerning: a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors, or a call or other transfer
of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the maximum amount of funds required to
purchase CCPRs pursuant to the Offer and to pay related costs and expenses will
be approximately $26.6 million. The Purchaser presently anticipates that all
amounts required for the purchase of CCPRs and to pay related costs and expenses
will be funded from (i) existing cash balances of the Purchaser and its
affiliates; (ii) a Loan Agreement with a third-party lender; and (iii) equity
commitments from its members.
Purchaser is the borrower under a Loan Agreement dated as of June 21, 2000
(the "Loan Agreement") with a third party lender (the "Lender"), entered into in
the ordinary course of Lender's business, which provides that Purchaser may
borrow up to $30,000,000. The interest rate of the loans under the Loan
Agreement is at the rate, which may vary over time, as from time to time
specified in the Loan Agreement. At any time the relevant interest rate is
determined by the applicable reserve adjusted eurodollar rate plus a margin.
This margin increases (increasing the cost to the purchaser of the loans) if the
S&P or Moody's rating of the issuer of the surety bond referred to below is
lowered, and this margin decreases (decreasing the cost to the purchaser of the
loans) if the S&P or Moody's rating of such issuer is raised. The loans mature
on June 30, 2005 and are secured by all property of Purchaser, including the
CCPRs of the subject company, pursuant to a Security and Intercreditor Agreement
dated as of June 21, 2000 among Purchaser, the Lender and the other parties
thereto. A surety bond has been issued by an insurer in favor of the Lender, and
Purchaser has entered into an Insurance and Indemnity Agreement dated as of June
21, 2000 with the insurer. The Loan Agreement contains provisions that (i)
prohibit future indebtedness or other liens on Purchaser's property and (ii)
contain restrictions on dividends and distributions of Purchaser. Purchaser
plans to repay the loans with (a) payments received with respect to any CCPRs of
the subject company and (b) any payments received pursuant to any other payments
rights owned or acquired from any other obligor. Obtaining financing is not a
condition to the Offer.
14
11. BACKGROUND OF THE OFFER
Purchaser was formed in December of 1999 to identify, acquire and hold
contingent payment rights of pharmaceutical companies. MVC was formed to acquire
a membership interest in Purchaser and to contribute any contingent payment
obligations which it may acquire from pharmaceutical companies to Purchaser. MVC
and Purchaser have from time to time acquired CCPRs from Holders, principally
through inquiries made by or through investment executives. See Section 6--
"Price Range of the CCPRs."
On July 24, 2000, Purchaser indicated to Amgen that it was interested in
making an offer to purchase CCPRs and made an informal request of Amgen for the
list of holders of CCPRs. By reply letter dated July 24, 2000, Amgen declined
the informal request to provide the security holder list, but indicated it was
aware of and would comply with its obligations under the tender offer rules and
regulations of the Exchange Act. In accordance with such rules and regulations,
Amgen is required to file its response on Schedule 14D-9 with the Securities and
Exchange Commission within ten business days after the date of the Offer.
12. PURPOSE OF THE OFFER
The purpose of the Offer is to enable the Purchaser to acquire CCPRs for
investment purposes. The Purchaser is acquiring the CCPRs solely for investment
purposes. Purchaser believes that the ownership of CCPRs (either by the
Purchaser or Holders who retain their CCPRs) remains a speculative investment.
Following the completion of the Offer, the Purchaser and its affiliates may
acquire additional CCPRs. Any such acquisition may be made through private
purchases, through one or more future tender offers or by any other means deemed
advisable, and may be at prices higher or lower than the price to be paid for
the CCPRs purchased in the Offer. No appraisal rights are available to Holders
in connection with the Offer.
13. DISTRIBUTIONS TO HOLDERS
Recent historical distributions per each CCPRs are illustrated in the
table below.
Quarterly Cash Distributions per CCPR
- --------------------------------------------------------------------------------
Sales Period Payment Date Cash Payment (1) per CCPR
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Q1 1995 May 1995 $ 12,775.13
- --------------------------------------------------------------------------------
Q2 1995 August 1995 15,010.56
- --------------------------------------------------------------------------------
Q3 1995 November 1995 13,967.29
- --------------------------------------------------------------------------------
Q4 1995 February 1996 15,046.66
- --------------------------------------------------------------------------------
(Total 1995) $56,799.64
- --------------------------------------------------------------------------------
Q1 1996 May 1996 13,925.90
- --------------------------------------------------------------------------------
Q2 1996 August 1996 15,859.47
- --------------------------------------------------------------------------------
Q3 1996 November 1996 15,963.66
- --------------------------------------------------------------------------------
Q4 1996 February 1997 17,033.09
- --------------------------------------------------------------------------------
(Total 1996) $62,782.12
- --------------------------------------------------------------------------------
Q1 1997 May 1997 15,238.88
- --------------------------------------------------------------------------------
Q2 1997 August 1997 12,719.66
- --------------------------------------------------------------------------------
Q3 1997 November 1997 12,795.05
- --------------------------------------------------------------------------------
Q4 1997 February 1998 12,907.87
- --------------------------------------------------------------------------------
(Total 1997) $53,661.46
- --------------------------------------------------------------------------------
Q1 1998 May 1998 12,355.10
- --------------------------------------------------------------------------------
Q2 1998 August 1998 13,018.67
- --------------------------------------------------------------------------------
Q3 1998 November 1998 14,753.40
- --------------------------------------------------------------------------------
15
- --------------------------------------------------------------------------------
Q4 1998 February 1999 19,194.31
- --------------------------------------------------------------------------------
(Total 1998) $59,321.48
- --------------------------------------------------------------------------------
Q1 1999 May 1999 17,791.55
- --------------------------------------------------------------------------------
Q2 1999 August 1999 19,316.79
- --------------------------------------------------------------------------------
Q3 1999 November 1999 20,048.86
- --------------------------------------------------------------------------------
Q4 1999 February 2000 23,620.71 (2)
- --------------------------------------------------------------------------------
(Total 1999) $80,077.91
- --------------------------------------------------------------------------------
Q1 2000 May 2000 14,716.28
- --------------------------------------------------------------------------------
Q2 2000 August 2000 20,433.06
- --------------------------------------------------------------------------------
(year to date 2000) $35,149.34
- --------------------------------------------------------------------------------
(1) Quarterly distributions historically had been reduced by $439 per CCPR to
repay a milestone payment made by F. Hoffman-La Roche Ltd in 1990. This
reduction ceased with the distribution relating to Neupogen sales for the
quarter ending December 31, 1999.
(2) The payment for Q4 1999 paid in February 2000 was higher than usual due to
Y2K inventory stocking. Without the Y2K effect, we estimate that the
approximate distribution per CCPR would have been $21,325.00.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to Purchaser's obligation to pay for or return tendered CCPRs promptly
after expiration or termination of the Offer), to pay for any CCPRs tendered,
and may postpone the acceptance for payment or, subject to the restriction
referred to above, payment for any CCPRs tendered, and may amend or terminate
the Offer (whether or not any CCPRs have theretofore been purchased or paid for)
if, (i) Purchaser is not satisfied, in its sole discretion, that, (a) upon
purchase of the CCPRs pursuant to the Offer, Purchaser and its nominee will have
full rights to ownership as to all such CCPRs, and that Purchaser, or its
nominee will become the registered holder of the purchased CCPRs; and (b) Amgen
has consented to the transfer of the CCPRs to Purchaser and to the direct
payment all payments related to the CCPRs into a collection account controlled
by a collateral agent to which Purchaser has pledged a security interest in the
CCPRs on behalf of the Lender, (ii) all material regulatory and related
approvals have not been obtained or made on terms reasonably satisfactory to
Purchaser, or (iii) at any time before acceptance for payment of, or payment
for, such CCPRs any of the following events shall occur or shall be deemed by
Purchaser to have occurred:
(A) there shall have been threatened, instituted or pending any action,
proceeding, application or counterclaim by or before any court or governmental,
regulatory or administrative agency, authority or tribunal, domestic, foreign or
supranational (other than actions, proceedings, applications or counterclaims
filed or initiated by Purchaser), which (i) seeks to challenge the acquisition
by Purchaser of the CCPRs, restrain, prohibit or delay the making or
consummation of the Offer, or obtain any damages in connection with any of the
foregoing, (ii) seeks to make the purchase of or payment for, some or all of the
CCPRs pursuant to the Offer or otherwise, illegal, (iii) seeks to impose
limitations on the ability of Purchaser effectively to acquire or hold, or
requiring Purchaser to dispose of or hold separate, any portion of the assets or
the business of Purchaser or impose limitations on the ability of Purchaser to
continue to conduct, own or operate all or any portion of their businesses and
assets as heretofore conducted, owned or operated, (iv) seeks to impose or may
result in material limitations on the ability of Purchaser or any of its
affiliates to exercise full rights of ownership of the CCPRs purchased by it,
(v) is reasonably likely to result in a material diminution in the benefits
expected to be derived by Purchaser as a result of the transactions contemplated
by the Offer or (vi) seeks to impose voting, procedural, price or other
requirements in addition to those under Delaware law and federal securities laws
(each as in effect on the date of the Offer to Purchase) or any material
condition to the Offer that is unacceptable (in its reasonable judgment) on
Purchaser;
16
(B) there shall have been proposed, sought, promulgated, enacted, entered,
enforced or deemed applicable to the Offer by any domestic, foreign or
supranational government or any governmental, administrative or regulatory
authority or agency or by any court or tribunal, domestic, foreign or
supranational, any statute, rule, regulation, judgment, decree, order or
injunction that might, directly or indirectly, result in any of the consequences
referred to in clauses (i) through (vi) of paragraph (A) above;
(C) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the-counter market in the United States, (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States or Cayman Islands, (iii) any material adverse change (or any
existing or threatened condition, event or development involving a prospective
material adverse change) in United States or any other currency exchange rates
or a suspension of, or a limitation on, the markets therefor, (iv) the
commencement of a war, armed hostilities or other international or national
calamity, directly or indirectly involving the United States, (v) any
limitations (whether or not mandatory) imposed by any governmental authority on,
or any event which might have material adverse significance with respect to, the
nature or extension of credit or further extension of credit by banks or other
lending institutions, (vi) any significant adverse change in securities or
financial markets in the United States or abroad or (vii) in the case of any of
the foregoing, a material acceleration or worsening thereof;
(D) any change (or any development involving a prospective change) shall
have occurred or be threatened in the business, financial condition, results of
operations, or prospects of Amgen's Neupogen franchise which, in the sole
judgment of the Purchaser, is, or may be, materially adverse to the Holders, or
the Purchaser shall become aware of any fact (including without limitation any
such change or development) which, in the sole judgment of the Purchaser, has,
or may have, materially adverse significance with respect to the Holders; or
(E) a tender offer or exchange offer for some portion or all of the CCPRs
shall have been commenced or publicly proposed to be made by any other person or
entity, or it shall have been publicly disclosed or the Purchaser shall have
learned or the Purchaser shall have cause to believe that any other person or
entity shall have entered into a definitive agreement or an agreement in
principle or made a proposal with respect to a tender offer or exchange offer
for some portion or all of the CCPRs, or Amgen shall have authorized,
recommended, or proposed, or shall have announced an intention to authorize,
recommend, or propose, any other material change in its arrangement with the
Holders.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted by Purchaser regardless of the circumstances (other than any action or
inaction by Purchaser) giving rise to any such condition or may be waived by
Purchaser, in whole or in part, from time to time in its sole discretion. The
failure by Purchaser at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right and each such right shall be deemed an
ongoing right and may be asserted at any time and from time to time. Any
reasonable determination by Purchaser concerning any of the events described
herein shall be final and binding.
15. CERTAIN LEGAL MATTERS
The Purchaser is not aware of any license or other regulatory permit which
appears to be material to Amgen's business and that might be adversely affected
by the Purchaser's acquisition of CCPRs pursuant to the Offer, any approval or
other action by any domestic or foreign governmental or administrative agency
that would be required prior to the acquisition of CCPRs by the Purchaser
pursuant to the Offer, or any state takeover statute that is applicable to the
Offer. Should any such approval or other action be required, or any such state
takeover statute be applicable, the Purchaser will evaluate at such time whether
such approval or action will be sought or compliance with such takeover statute
will be effected. There can be no assurance that any such approval, action, or
compliance, if needed, would be obtained or effected or, if obtained or
effected, would be obtained or effected without substantial conditions or
adverse consequences. The Purchaser's obligation to purchase and pay for the
tendering CCPRs is subject to certain conditions, including conditions relating
to the legal matters discussed herein. See Section 14 "Certain Conditions to the
Offer."
17
APPRAISAL RIGHTS. Holders will not have appraisal rights as a result of
the Offer.
MARGIN REQUIREMENTS. The CCPRs are not "margin securities" under the
regulations of the Board of Governors and the Federal Reserve System and,
accordingly, those regulations generally are not applicable to the Offer.
ANTITRUST. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied. The Purchaser does not
currently believe any filing is required under the HSR Act with respect to its
acquisition of CCPRs contemplated by the Offer.
In addition, the Antitrust Division and the FTC frequently scrutinize the
legality under the antitrust laws of acquisitions, mergers, and other commercial
transactions. At any time before or after the Purchaser's purchase of CCPRs, the
Antitrust Division of the FTC could take such action under the antitrust laws as
it either deems necessary or desirable in the public interest regarding such
purchase, including seeking to enjoin the purchase of CCPRs pursuant to the
Offer, the divestiture of CCPRs purchased by the Purchaser or the divestiture of
substantial assets of the Purchaser, the funds and their respective affiliates
or Amgen. Private parties as well as state attorneys general may also bring
legal actions under the antitrust laws under certain circumstances. There can be
no assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such challenge is made, what the result will be.
16. FEES AND EXPENSES
Purchaser has retained MMS Escrow and Transfer Agency ("MMS") to act as
the Information Agent and Depositary in connection with the Offer. MMS will
receive reasonable and customary compensation for its services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.
Except as set forth above, Purchaser will not pay any fees or commissions
to any broker or dealer or other person for soliciting tenders of CCPRs pursuant
to the Offer. Brokers, dealers, commercial banks and trust companies will be
reimbursed by Purchaser for customary mailing and handling expenses incurred by
them in forwarding the offering materials to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) Holders residing in any jurisdiction in which the making of the Offer
or the acceptance thereof would not be in compliance with the securities, blue
sky or other laws of the jurisdiction. However, Purchaser may, in its
discretion, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to Holders in that jurisdiction. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer will be deemed to be made on
behalf of Purchaser by one or more registered brokers or dealers that are
licensed under the laws of the jurisdiction.
Purchaser has filed with the Commission the Schedule TO pursuant to Rule
14d-1 under the Exchange Act (the "Schedule") containing certain additional
information with respect to the Offer. The Schedule and any amendments to the
Schedule, including exhibits, may be examined and copies may be obtained from
the principal office of the Commission in the manner set forth in Section 8
above (except that they will not be available at the regional offices of the
Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO
18
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, THE INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
September 11, 2000
MERIDIAN VENTURE GROUP, LLC
19
Attached hereto is the Letter of Transmittal. Facsimile copies of the
Letter of Transmittal, properly completed and duly signed, will be accepted. The
Letter of Transmittal and any other required documents should be sent or
delivered by each Holder or his or her broker, dealer, commercial bank, trust
company or other nominee to the Depositary or the Purchaser, at one of the
addresses set forth below:
THE DEPOSITARY AND INFORMATION AGENT FOR THE OFFER IS:
MMS ESCROW and TRANSFER AGENCY
BY TELEPHONE: (877) 346-8317
BY MAIL: MMS Escrow and Transfer Agency
PO Box 7090
Troy, Michigan 48007-7090
Attention: Matthew Fisher
BY FACSIMILE: (248) 614-4536
THE PURCHASER IS:
MERIDIAN VENTURE GROUP, LLC
BY TELEPHONE: (212) 688-2015
BY MAIL: Meridian Venture Group, LLC
767 Fifth Avenue, 4th Floor
New York, New York 10153
Attention: David B. Schmickel
BY FACSIMILE: (212) 838-7280
Questions and requests for assistance may be directed to the Information
Agent or Purchaser. Additional copies of this Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent or Purchaser and will be furnished promptly at Purchaser's
expense. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
20
SCHEDULE I
The sole member and Manager of Purchaser is MVC. Pursuant to a certain
Limited Liability Company Agreement made as of June 21, 2000 between Purchaser
and MVC, certain MVC managerial rights, powers and duties, including the making
of the Offer, were delegated to MVGM. The following sets forth the name, present
principal occupation or employment and material occupation, positions, offices
or employment for the past five years of each officer and director of MVGM. The
business address of each such person is 767 Fifth Avenue, 4th Floor, New York,
New York 10153.
STEPHEN W. ELLIS, 51 years old, is a Director of Meridian Venture Group
Management, Ltd. Mr. Ellis is a founder of U.S. Medical Network, L.L.C, a
private company, and has been its Chief Executive Officer since June 2000. Mr.
Ellis has served as a Director of Hotjobs.com Inc, since May 1999, and as
Hotjobs.com Inc.'s Chief Financial Officer from April 1999 to May 2000. From
March 1998 through December 1998, Mr. Ellis served as the Chief Financial
Officer for Biztravel.com, an Internet based travel services company. From March
1997 through February 1998, Mr. Ellis was the Chief Financial Officer for
Metromedia Fiber Network (Nasdaq: MFNX), a facilities-based fiber optic/telecom
services company. Mr. Ellis also served as an executive officer of Data
Broadcasting Corporation (Nasdaq: DBCC), a financial market data company, first
as Chief Financial Officer from 1992 to 1995, and then as Executive Vice
President, Finance, through March 1997. Mr. Ellis holds a bachelors degree from
the Massachusetts Institute of Technology and a MBA from the Stanford University
Graduate School of Business. Mr. Ellis is a Certified Public Accountant. He is
also on the board of directors of FSA Capital, Inc., a private company.
CONSTANCE HARRISON MEYER, 41 years old, is President of Meridian Venture Group
Management, Ltd., a position she has held since January 2000, and a Director.
Prior to joining Meridian Venture Group Management, Ltd., Ms. Harrison was
employed by Raebe, LLC from February 1998 to September 1999 and Pharmaceutical
Partners, LLC, from August 1996 to June 1997. Prior to that, Ms. Harrison served
as a consultant and director to certain private companies primarily in the
biotechnology and healthcare industries since 1990. Ms. Harrison received her
B.S. in political science from Barnard College in 1981.
GIL N. PERRY, 34 years old, is currently a Vice President of Meridian Venture
Group Management, Ltd., a position he has held since January 2000, and a
Director. Prior to joining Meridian Venture Group Management Ltd. (and
currently), Mr. Perry was the founder and sole principal of Perry Consulting.
Mr. Perry received a B.B.A in Finance from the University of Massachusetts in
1987.
DAVID B. SCHMICKEL, PhD., JD., 37 years old, is a Vice President of Meridian
Venture Group Management, Ltd., a position he has held since January 2000, and a
Director. Since June 1998 Dr. Schmickel has been an officer of Enhance
Pharmaceuticals, a private company, which provides legal, lobbying and
consulting services to individuals and companies. Since March 1999, Dr.
Schmickel has been an officer of Westmark Financial Services, a private company
and a provider of financial services to individuals and corporations. Prior to
joining Meridian Venture Group Management, Ltd., Dr. Schmickel was employed by
the Biotechnology Industry Organization (BIO) as patent and legal counsel from
October 1995 to July 1999. Dr. Schmickel also served from March 1998 to July
1999 as a Vice President of Tree Source, Inc., a private company. Dr. Schmickel
received his Ph.D. in Biochemistry from John Hopkins University in 1991, and his
JD from the University of Baltimore in 1996.
I-1