EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING UNITS OF LIMITED PARTNERSHIP INTEREST
OF
PAINEWEBBER R&D PARTNERS II, L.P.
AT
$3,650 NET PER UNIT
BY
BIOROYALTIES, L.L.C.
BioRoyalties, L.L.C., a Delaware limited liability company (the
"Purchaser"), on behalf of Pharmaceutical Royalties, L.L.C, a Delaware
limited liability company, and Pharmaceutical Royalty Investments Ltd., a
Bermuda company (collectively the "Funds"), hereby offer to purchase any and
all outstanding units of limited partnership interest (the "Units") in
PaineWebber R&D Partners II, L.P., a Delaware limited partnership (the
"Partnership"), for cash consideration per Unit of $3,650 (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 cash or asset distributions made or declared by
the Partnership on or after June 30, 1997 and prior to either the date on
which the Purchaser pays the Purchase Price for the tendered Units in the
case of a distribution of cash or, in the case of a distribution of assets,
the date assets are to be assigned to the Purchaser. This Offer is made to
all beneficial owners of Units (each a "Holder").
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON SEPTEMBER 12, 1997, UNLESS THE OFFER IS EXTENDED.
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AS OF THE DATE OF THIS OFFER, THE GENERAL PARTNER OF THE PARTNERSHIP,
PAINEWEBBER TECHNOLOGIES II, L.P., HAS NOT MADE ANY RECOMMENDATION TO ANY
HOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING HIS OR HER UNITS.
NO LATER THAN 10 BUSINESS DAYS FROM THE DATE OF THIS OFFER, THE GENERAL
PARTNER IS REQUIRED BY LAW TO ISSUE A STATEMENT THAT (I) THE PARTNERSHIP
ACCEPTS OR REJECTS THE OFFER, (II) THE PARTNERSHIP EXPRESSES NO OPINION AND
IS REMAINING NEUTRAL TOWARD THE OFFER OR (III) THE PARTNERSHIP IS UNABLE TO
TAKE A POSITION WITH RESPECT TO THE OFFER.
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THE OFFER IS NOT CONDITIONED UPON ANY NUMBER OF UNITS BEING TENDERED. THE
OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, PURCHASER BEING SATISFIED, IN
ITS SOLE DISCRETION THAT, UPON PURCHASE OF THE UNITS PURSUANT TO THE OFFER,
IT OR ITS NOMINEE WILL HAVE FULL RIGHTS TO OWNERSHIP AS TO ALL SUCH UNITS AND
THAT THE GENERAL PARTNER WILL CONSENT TO IT AND/OR ITS NOMINEE BECOMING
ASSIGNEES OF THE PURCHASED UNITS AND A SUBSTITUTE LIMITED PARTNER. 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 Units 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 those Units
pursuant to the procedures for transfer set forth in Section 3 hereof and the
Instructions attached to the Letter of Transmittal.
There is no established trading market for the Units. The Purchase Price
has been established by the Purchaser, in its sole discretion. No independent
opinion, report or appraisal related to the valuation of the Units 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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INTRODUCTION............................................................. 4
1. TERMS OF THE OFFER................................................... 6
2. PRORATION; ACCEPTANCE FOR PAYMENT AND PAYMENT........................ 7
3. PROCEDURE FOR TENDERING UNITS........................................ 8
4. WITHDRAWAL RIGHTS.................................................... 9
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER................. 10
6. PRICE RANGE OF THE UNITS............................................. 12
7. EFFECT OF THE OFFER ON EXCHANGE ACT REGISTRATION..................... 13
8. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP....................... 13
9. CERTAIN INFORMATION CONCERNING PURCHASER............................. 17
10. SOURCE AND AMOUNT OF FUNDS........................................... 18
11. BACKGROUND OF THE OFFER.............................................. 18
12. PURPOSE OF THE OFFER; PLANS FOR THE PARTNERSHIP...................... 19
13. DISTRIBUTIONS TO LIMITED PARTNERS.................................... 20
14. CERTAIN CONDITIONS OF THE OFFER...................................... 20
15. CERTAIN LEGAL MATTERS................................................ 22
16. FEES AND EXPENSES.................................................... 22
17. MISCELLANEOUS........................................................ 23
SCHEDULE I............................................................... 1
3
To Holders of Units of Limited Partnership Interest in PaineWebber R&D
Partners II, L.P.:
INTRODUCTION
BioRoyalties, L.L.C., a Delaware limited liability company (the
"Purchaser"), on behalf of Pharmaceutical Royalties, L.L.C, a Delaware limited
liability company, and Pharmaceutical Royalty Investments Ltd., a Bermuda
company (collectively the "Funds"), hereby offer to purchase any and all
outstanding units of limited partnership interest (the "Units") in PaineWebber
R&D Partners II, L.P., a Delaware limited partnership (the "Partnership"), for
cash consideration per Unit of $3,650, 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 any cash or asset
distributions made or declared by the Partnership on or after June 30, 1997 and
prior to either the date on which the Purchaser pays the Purchase Price for the
tendered Units in the case of a distribution of cash or, in the case of a
distribution of assets, the date assets are to be assigned to the Purchaser.
This Offer is made to all beneficial owners of Units (each a "Holder").
The Purchaser and the Funds are making this Offer because the Funds
believe that the Units represent an attractive investment at the price offered.
There can be no assurance, however, that this belief is correct and, as a
result, ownership of Units (either by the Purchaser, the Funds or Holders who
retain their Units) remains a speculative investment. The Funds are acquiring
the Units for investment purposes and do not currently intend to make any
effort to change the management or operations of the Partnership and have no
current plans for any extraordinary transaction regarding the Partnership.
The Purchaser is not affiliated with the General Partner of the
Partnership.
As of the date of this Offer, the General Partner of PaineWebber R&D
Partners II, L.P., PaineWebber Technologies II, L.P., has not made any
recommendation to any Holders as to whether to tender or refrain from tendering
Units. Each Holder must make his or her own decision whether to tender or
refrain from tendering his or her Units. No later than 10 business days from
the date of this Offer, the General Partner is required by law to issue a
statement that (i) the Partnership accepts or rejects the Offer, (ii) the
Partnership expresses no opinion and is remaining neutral toward the Offer or
(iii) the Partnership is unable to take a position with respect to the Offer.
The Offer is conditioned upon, among other things, Purchaser being
satisfied, in its sole discretion, that, upon purchase of the Units pursuant to
the Offer, it, the Funds and/or their nominee will have full rights to
ownership as to all such Units and that the General Partner will consent to it,
the Funds or their nominee becoming assignees of the purchased Units and a
substitute limited partner with respect to all such Units. The Offer is also
subject to certain other conditions contained in this Offer to Purchase. See
Sections 2 and 14.
According to a Quarterly Report on Form 10-Q for the quarter ended June
30, 1997 filed by the Partnership (the "Partnership 10-Q"), 8,257 Units were
issued and outstanding.
Tendering Holders will not be obligated to pay brokerage fees or
commissions, except transfer taxes, if applicable, on the purchase of Units
pursuant to the Offer. Purchaser will pay all charges and expenses of The
Xxxxxx Group, as the depositary (the "Depositary") and information agent (the
"Information Agent") incurred in connection with the Offer. See Section 16.
According to the July 1987 Prospectus, the Partnership's principal
objective was to achieve substantial returns to investors over a 6-8 year
period by investing in the development and commercialization of new products
being developed by leading technology companies. In pursuing this
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strategy, the Partnership funded ten projects, of which three -- those with
Centocor, Inc., Genzyme Corporation and Synergen (now Amgen Boulder), Inc. --
are ongoing. The remaining seven projects have either terminated or are near
termination. From inception through June 30, 1997, each Holder had received
cumulative distributions of $9,722 per $10,000 Unit, consisting of cash
distributions of $2,516 and in kind distributions (stock and warrants) valued
at $7,206 at the time of distribution. See Section 13.
From time to time during the past 6 months, the Purchaser has discussed
with the General Partner the possibility of purchasing for cash all of the
remaining assets of the Partnership. On March 26, 1997, the Purchaser made an
offer to the General Partner to acquire all of the assets of the Partnership
for $23 million in cash (equivalent to $2,785 per Unit). On June 9, 1997,
following the Partnership's agreement to settle pending litigation with
Centocor, the Purchaser made an offer to the General Partner to acquire all of
the assets of the Partnership for $29 million in cash (equivalent to $3,500 per
Unit). The General Partner declined both offers. As a result of its inability
to negotiate the purchase of all of the assets of the Partnership, the
Purchaser has made the Offer directly to each Holder in order that such Holder
can decide whether to tender his or her Units at the Purchase Price.
A Holder may wish to tender Units for a number of reasons:
- LIQUIDITY OPPORTUNITY. The Offer provides each Holder the opportunity
to liquidate his or her investment in the Partnership without transfer
fees and transaction costs generally incurred in secondary market sales
(which can range from 5% to 8.75% of the sale price). Although there are
limited resale mechanisms available to Holders through partnership
matching services, there is no formal trading market for the Units.
According to the Partnership's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 (the "Partnership 10-K") "there is no
established trading market for the limited partnership interests, and no
such market is expected to develop."
- PURCHASE PRICE GREATER THAN GENERAL PARTNER'S JULY 1996 VALUATION FOR
ERISA PURPOSES. The aggregate Purchase Price is greater than the $29
million valuation of the Partnership prepared by the General Partner in
July 1996 for ERISA purposes. In addition, since the date of the General
Partner's valuation, the Partnership has distributed approximately $7.7
million in cash.
- PREMIUM TO HISTORICAL PRICES. The Purchase Price represents a premium of
46% to the most recent and highest selling price ($2,500 per Unit) of a
Unit traded on the Chicago Partnership Board or in any other transaction
of which Purchaser is aware.
- POTENTIAL TAX BENEFIT, ENHANCED BY CHANGE IN CAPITAL GAIN RATES TO 20%.
Each holder is generally taxable on his or her allocable share of
Partnership profits, a portion of which are ordinary income. Ordinary
income is taxed to individuals at rates of up to 39.6%. A portion of the
gain resulting from the sale of a Unit should be taxed to non-corporate
Holders at capital gain rates (currently 20% for most individuals
disposing of capital assets held more than 18 months), possibly resulting
in tax savings. In addition, the sale of a Unit may enable a Holder to
use previously disallowed passive loss carryforwards, accelerating their
recognition. THE PURCHASER IS NOT EXPRESSING AN OPINION AS TO THE TAX
CONSEQUENCES OF TENDERING UNITS. Holders are strongly advised to consult
their tax advisors with respect to the tax consequences of accepting the
Offer.
- RESOLUTION OF LITIGATION. On June 6, 1997, Centocor and the Partnership
reached an agreement to settle a dispute over payments owed to investors
in Centocor Partners III, L.P. The settlement is subject to court
approval, for which a hearing is scheduled on September 4, 1997. If
approved, the agreement would result in one-time cash payments per Unit
of approximately $420 in 1997, $280 in 1998, and $95 if and when ReoPro
is approved for marketing in Japan. The Partnership is also entitled to
receive payments based on the sales of ReoPro over the next 10 years,
which have been revised under the settlement agreement. The Purchaser
has considered the value of these payments in determining the Purchase
Price.
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- SIMPLIFIED TAX RETURNS. The Offer may be attractive to certain Holders
who wish in the future to avoid the expenses, delays and complications of
filing complex income tax returns resulting from Form K-1s necessitated
by ownership of Units.
- VALUE DEPENDENT ON ONE PRODUCT. The Purchaser believes that a
substantial portion of the value of the Partnership is attributable to
the right to receive cash payments based on the future sales of ReoPro.
There are at least four other products having a mechanism of action
similar to that of ReoPro that are in clinical development for the same
or similar indications. There can be no assurance that the sales of
ReoPro will not be adversely affected by these products.
- POSSIBLE REGULATORY ISSUES. The Partnership's Centocor CPRs may be
considered securities under the Investment Company Act of 1940 (the
"Act"). As a result, the Partnership will need to determine whether it
is subject to the Act and possible implications for its future business
strategy. One possible way to avoid issues that might arise under the
Act is to distribute the CPRs. In a partnership with similar investments,
PaineWebber R&D Partners, L.P., the partnership distributed to its
limited partners securities similar to the CPRs. If the General Partner
were to distribute to each Holder his or her PRO RATA share of CPRs,
each Holder would receive an asset for which there is not likely to be a
market, and for which the value depends exclusively on the sales of a
single pharmaceutical product over a 10 year period. The Purchaser
believes that if this strategy were pursued it would negatively impact
the ability of a Holder to maximize the value of his or her interest.
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) any and all Units that are validly tendered and not withdrawn in
accordance with Section 4 prior to the Expiration Date. As used in the Offer,
the term "Expiration Date" means 12:00 midnight, New York City time, on
September 12, 1997, unless and until 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(c)(6) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Offer is not conditioned upon any minimum number of Units being
tendered. The Offer is subject to certain other conditions set forth in
Sections 2 and 14. 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 Units, retain all tendered Units until the
Expiration Date, (ii) waive any or all of the conditions of the Offer and,
subject to compliance with applicable rules and regulations of the Securities
and Exchange Commission (the "Commission"), accept for payment or purchase all
validly tendered Units and not extend the Offer, or (iii) terminate the Offer
and not accept for payment any Units and return promptly all tendered Units 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 the previously scheduled Expiration Date.
Following the expiration of the Offer or if the Offer is not consummated,
the Purchaser and the Funds may seek to acquire Units through open-market
purchases, 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 Offer Price and could be for cash or other consideration.
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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 an 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 Units 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 Units validly tendered (and not properly withdrawn) on or
before the Expiration Date is greater than the number (the "Number of Valid
Units") for which Purchaser is satisfied, in its sole discretion, that it
and/or its nominee will have all of the rights of a limited partner, the
Purchaser will accept for payment (and thereby purchase) only the Number of
Valid Units. The Purchaser will acquire the Number of Valid Units PRO RATA to
the number of Units validly tendered (and not properly withdrawn) on or before
the Expiration Date, with appropriate adjustments to avoid purchases in
fractions of other than half Units. If the number of Units validly tendered
(and not properly withdrawn) on or before the Expiration Date is not greater
than the Number of Valid Units, Purchaser will purchase all Units 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 as a result of the General
Partner's limiting transfers, 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 Units tendered or
return those Units promptly after the termination or withdrawal of the Offer,
the Purchaser does not intend to pay for any Units accepted for payment
pursuant to the Offer until the final proration results are known and it has
received notice from the Partnership or its transfer agent that the Units are
eligible for transfer to the Purchaser.
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 Units which are
validly tendered (and not properly withdrawn) prior to the Expiration Date,
promptly after the later to occur of: (i) the Expiration Date and (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 Units 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 Units purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the Letter of
Transmittal (or manually signed facsimile thereof), properly completed and duly
executed with a Medallion signature guarantee and (ii) confirmation to
Purchaser of such Holder's ownership by MMS Escrow and Transfer Agency, Inc.,
the registrar and transfer agent of the Units.
7
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment and thereby purchased Units validly tendered and not properly withdrawn
if and when Purchaser gives oral or written notice to the Depositary of
Purchaser's acceptance of such Units for payment. Payment for Units 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 Units pursuant to the Offer. Purchaser will pay any transfer taxes
incident to the transfer to it of validly tendered Units, as well as any
charges and expenses of the Depositary and the Information Agent. Under no
circumstances will interest accrue on the consideration to be paid for the
Units by Purchaser, regardless of any delay in making such payment.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid per Unit pursuant to the Offer, Purchaser will pay the increased
consideration for all the Units purchased pursuant to the Offer, whether or not
the Units were tendered prior to the increase in consideration. Purchaser does
not currently expect to increase the consideration to be paid per Unit 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 Units 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 Units validly tendered and accepted
for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING UNITS
VALID TENDERS. For Units to be validly tendered pursuant to the Offer, a
Letter of Transmittal (or a manually signed facsimile), properly completed and
duly executed, with a Medallion signature guarantee and any other documents
required by the Letter of Transmittal, must be received by the Depositary at
its address set forth on the back cover of this Offer to Purchase prior to the
Expiration Date.
SIGNATURE GUARANTEES. In all cases, signatures on the Letter of
Transmittal must be guaranteed by a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (an "Eligible Institution").
SEE INSTRUCTION 2 OF THE LETTER OF TRANSMITTAL. If the Units are registered in
the name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made to a person other than the registered Holder of the Units
surrendered, then the Letter of Transmittal for the tendered Units must be
endorsed or accompanied by appropriate stock powers, in each case signed
exactly as the name or names of the registered Holder appears in the records of
MMS Escrow and Transfer Agency, Inc. SEE INSTRUCTIONS 1 AND 2 OF THE LETTER OF
TRANSMITTAL.
IN ALL CASES, UNITS SHALL NOT BE DEEMED VALIDLY TENDERED UNLESS A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED
FACSIMILE) IS RECEIVED BY THE DEPOSITARY.
THE METHOD OF DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING HOLDER. IF DELIVERY IS
MADE BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED IS RECOMMENDED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Notwithstanding any other provision of this Offer to Purchase, payment for
Units accepted for payment pursuant to the Offer in all cases will be made only
after timely receipt by the Depositary of confirmation of such Holder's
ownership by MMS Escrow and Transfer Agency, Inc., the registrar and
8
transfer agent for the Units, and a Letter of Transmittal (or a manually
signed facsimile), properly completed and duly executed, with a Medallion
signature guarantees, and all other documents required by the Letter of
Transmittal.
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 Units 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 Units 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 Units. 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 Units 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 Units (and with respect to any and all
other securities issued or issuable in respect of such Units on or after the
date hereof) tendered by the Holder. All such powers of attorney and proxies
will be considered coupled with an interest in the tendered Units and all prior
powers of attorney and proxies given by the Holder with respect to the Units
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 voting and
other rights of the Holder with respect to such Units 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 Units to be validly tendered, immediately upon
Purchaser's acceptance for payment of the Units, Purchaser must be able to
exercise full voting and other rights with respect to the Units.
A tender of Units 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 Units tendered pursuant to the
Offer will constitute a binding agreement between the tendering Holder and
Purchaser upon the terms and conditions of the Offer.
4. WITHDRAWAL RIGHTS
Tenders of Units made pursuant to the Offer are irrevocable, except as
otherwise provided in this Section 4. Units 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 October 14, 1997. If Purchaser extends the
Offer, is delayed in its purchase of or payment for Units, or is unable to
purchase or pay for Units for any reason then, without prejudice to the rights
of Purchaser, tendered Units 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 Units is subject to the provisions of Rule 14e-1(c)
under the Exchange Act, which requires Purchaser to
9
pay the consideration offered or to return Units 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 timely received by the Depositary at
it 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
Units to be withdrawn, the number of Units to be withdrawn and the name of the
registered Holder, if different from that of the person who tendered the Units.
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
Units 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 give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failing to give such notification.
Any Units 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 federal income tax
consequences of a sale of Units pursuant to the Offer, assuming that the
Partnership is treated and taxable as a partnership for federal income tax
purposes. This summary is of a general nature only and does not discuss all
aspects of federal income taxation that may be relevant to each Holder in light
of such Xxxxxx's particular circumstances. In addition, the summary does not
discuss aspects of federal income taxation that may be relevant to Holders
subject to special treatment under the 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
Units 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 administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change, possibly on a retroactive basis.
EACH HOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR TAX
CONSEQUENCES TO SUCH HOLDER OF SELLING UNITS PURSUANT TO THIS OFFER. THIS
SUMMARY DOES NOT DISCUSS ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF
SELLING UNITS PURSUANT TO THIS OFFER.
CONSEQUENCES TO HOLDERS WHO TENDER UNITS. A Holder who tenders Units
pursuant to the Offer generally will recognize gain or loss equal to the
difference between (i) the Holder's "amount realized" and (ii) the Holder's
adjusted tax basis in the Units tendered. The amount realized with respect to
a Unit sold pursuant to the Offer is the sum of the amount of cash received by
the Holder for such Unit and such Holder's share of Partnership liabilities
allocable to such Unit (as determined under Section 752 of the Code). The
amount of a Holder's adjusted tax basis in his or her Units will vary depending
on the Holder's particular circumstances, and will be affected by both
allocations of Partnership income, gain and loss during the year in which Units
are tendered, and distributions, if any, made by the Partnership to a Holder
with respect to such Units during such year. The Partnership's taxable income,
gain and loss for the taxable year will be allocated between the Purchaser and
tendering Holders in accordance with the terms of the Partnership Agreement.
TAX BASIS IN UNITS. The IRS has ruled that a partner has one basis for
the partner's entire interest in a partnership even if a partner bought
partnership interests in different transactions. Upon a sale of a
10
portion of such aggregate interest (e.g., in a partial tender of Units), a
Holder would be required to allocate such Holder's aggregate tax basis between
the Units sold and the Units retained using some equitable apportionment
method, such as the relative fair market value of such Units on the date of
sale. It is not entirely clear whether the aggregation rule results in the
tacking of the holding period of earlier purchased Units to more recently
acquired Units.
CHARACTERIZATION OF GAIN OR LOSS. Gain or loss recognized by a Holder on
the sale of Units pursuant to the Offer generally will be capital gain or loss.
However, under Section 751 of the Code, the difference between the portion of
the amount realized by a Holder that is attributable to "unrealized
receivables" and "inventory" (together, "Section 751 Property") over the
portion of the Holder's adjusted tax basis in the Unit that is allocated to
Section 751 Property will be treated as ordinary income or loss, rather than
capital gain or loss. In certain cases, ordinary income recognized under
Section 751 of the Code may exceed net taxable gain realized on the sale of a
Unit and may be recognized even if there is a net taxable loss realized on the
sale of a Unit. Existing Treasury regulations require each person who
transfers an interest in a partnership possessing Section 751 Property to file
a statement with such person's tax return reporting the transfer and certain
other information relating thereto.
The Taxpayer Relief Act of 1997 (HR 2014) (the "Act"), enacted into law on
August 5, 1997, generally reduces the maximum rate of tax on net capital gain
for individuals, estates and trusts from 28% to 20% (in addition, the Act
provides for additional rate reductions on gains attributable to dispositions
of certain property for the taxable years beginning after December 31, 2000).
However, for sales or exchanges of capital assets after July 28, 1997, the 20%
rate applies only to gains attributable to such assets that were held for more
than 18 months. The maximum rate of 20% does not apply to gain on the sale of
collectibles and to certain other gain. The 28% rate continues to apply to
gains attributable to sales or exchanges of capital assets held for more than
one year but not more than 18 months. For non-corporate taxpayers, capital
losses are deductible only to the extent of capital gains plus up to $3,000 of
ordinary income. If capital losses are not used in a tax year, such losses
generally can be carried forward to succeeding tax years indefinitely. Non-
corporate taxpayers are not entitled to carry back capital losses to prior
taxable years.
Under current law, the maximum federal income tax rate applicable to
capital gains and ordinary income for corporations is 35%. Corporations may
only offset capital losses against capital gains. Corporations are entitled to
carry back unused capital losses to the three preceding taxable years and carry
forward unused capital losses to the succeeding five taxable years.
EFFECT OF PASSIVE LOSS RULES. Under Section 469 of the Code, a non-
corporate taxpayer or personal service corporation generally can deduct passive
activity losses in any year only to the extent of such person's passive
activity income for such year, and closely held corporations may not offset
such losses against so-called "portfolio" income. Provided that a Holder is
subject to the passive activity loss rules in connection with the ownership of
Units, a Holder with "suspended" passive activity losses generally should be
entitled to offset such losses against any income or gain recognized by the
Holder on a sale of all of such Units (subject to certain other limitations).
If a Holder does not sell all of his or her Units, the passive activity loss
limitations would continue to apply until the Holder disposes of all of his or
her remaining Units.
BACK-UP WITHHOLDING. A Holder (other than corporations and certain
foreign individuals) who tenders Units may be subject to 31% backup withholding
unless he or she provides a taxpayer identification number ("TIN") and
certifies that the TIN is correct or properly certifies that he or she is
awaiting a TIN. A 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 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. SEE INSTRUCTION 4 TO THE LETTER OF
TRANSMITTAL.
11
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 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 investment in
the Partnership or upon the sale of Units, or the effective date of any
legislation which may derive from any such past or future proposals. Holders
are strongly urged to consider ongoing developments in this uncertain area.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. LIMITED PARTNERS SHOULD CONSULT THEIR OWN TAX
ADVISORS TO DETERMINE THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF
THE OFFER.
6. PRICE RANGE OF THE UNITS
According to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 filed by the Partnership (the "Partnership 10-K") "there is
no existing public market for the Units, and no such market is expected to
develop." According to Partnership Spectrum, an independent third-party
industry publication that tracks recent trades in certain limited partnership
interests, for the twelve months ended May 31, 1997, 29.5 Units traded at per
Unit prices between $580 and $2,301 with a weighted average of $1,215 per Unit.
The most recent issue of the Partnership Spectrum (May/June, 1997) indicates
that 3.0 Units traded in the period April 1, 1997 through May 31, 1997 at
between $2,200 and $2,301.38 per Unit, with a weighted average of $2,267.58 per
Unit.
Trading Activity for the Twelve-Month Period Ended May 31, 1997
Weighted Low Price/ Number of Number Total
Average Price High Price Units Traded of Trades Volume
------------- ------------- ------------ --------- ------
June 1, 1996 - July 31, 1996 $ 669 $ 580/$770 8.5 9.0 $ 5,683
August 1, 1996 - September 30, 1996 $ 706 $ 670/$755 3.5 5.0 $ 2,473
October 1, 1996 - November 30, 1996 $1,234 $ 657/$1,840 10.0 9.0 $12,342
December 1, 1996 - January 31, 1997 $1,395 $1,040/$1,920 2.0 3.0 $ 2,790
February 1, 1997 - March 31, 1997 $2,300 $2,300/$2,300 2.5 1.0 $ 5,750
April 1, 1997 - May 31, 1997 $2,268 $2,200/$2,301 3.0 2.0 $ 6,803
Holders are advised, however, that such gross sales prices reported by The
Partnership Spectrum do not necessarily reflect the net sales proceeds received
by sellers of Units, which typically are reduced by commissions and other
secondary market transaction costs to amounts less than the reported prices.
Also, trades may have occurred at higher or lower prices which were not
reported by the Partnership Spectrum and the Purchaser makes no representation
as to the accuracy or completeness of the trade information. Not all trades
are reported in the Partnership Spectrum.
The Purchase Price represents the price at which the Purchaser is willing
to purchase Units. 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 independent
valuations or appraisals of the underlying assets owned by the Partnership.
Other measures of the value of the Units may be relevant to Holders. HOLDERS
ARE URGED TO CONSIDER CAREFULLY ALL OF THE INFORMATION CONTAINED HEREIN AND
CONSULT WITH THE
12
OWN ADVISORS, TAX, FINANCIAL OR OTHERWISE, IN EVALUATING THE TERMS OF THE
OFFER BEFORE DECIDING WHETHER TO TENDER UNITS.
7. EFFECT OF THE OFFER ON EXCHANGE ACT REGISTRATION
The Units are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Partnership to the
Commission if the Units are neither listed on a national securities exchange
nor held by 300 or more holders of record. Termination of the registration of
the Units under the Exchange Act would substantially reduce the information
required to be furnished by the Partnership to Holders and to the Commission
and would make certain of the provisions of the Exchange Act no longer
applicable to the Units. Although the Purchaser would consider causing the
Partnership to terminate registration of the Units under the Exchange Act if
the requirements for termination of registration of the Units are met, the
Purchaser currently has no plans to seek to cause the Partnership to terminate
such registration.
8. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP
The Partnership is a Delaware limited partnership that commenced
operations on September 30, 1987 with a total of $72 million available for
investment. PWDC Holding Company (the "Manager") is the general partner of
PaineWebber Technologies II, L.P., which is the general partner (the "General
Partner") of the Partnership. PWDC Holding Company is a wholly owned
subsidiary of PaineWebber Development Corporation ("PWDC"), an indirect wholly-
owned subsidiary of PaineWebber Group Inc. ("PWG"). According to the
prospectus dated July 16, 1987, the General Partner was to seek to obtain
substantial returns for investors over six to eight years through the
development and commercialization of new products (the "Projects"). The
Partnership 10-Q states that the principal objective of the Partnership is to
provide long-term capital appreciation to investors through investing in the
development and commercialization of new products. The Partnership will
terminate on December 31, 2012, unless its term is extended or reduced by the
General Partner.
The Partnership has completely funded its ten Projects at an aggregate
investment of $65.2 million. Only three of the ten Projects, those with
Centocor, Inc. ("Centocor"), Genzyme Corporation ("Genzyme") and Synergen, Inc.
("Synergen"), are currently ongoing programs. The remaining seven Projects
have either terminated or are near termination.
On January 31, 1997, pursuant to the provisions of the Partnership
Purchase Option Agreement between Centocor and each limited partner, Centocor
exercised its option to purchase the limited partnership interests of Centocor
Partners III, L.P. ("CPIII"), including those owned by the Partnership. The
Partnership received a one-time payment of $3,325,000 and will receive future
payments based on sales of certain products developed by CPIII. In June 1997,
the Partnership and Centocor entered into an agreement to settle litigation
initiated by the Partnership in July 1995. The settlement agreement provides
for, among other things, the method by which the payments to former limited
partners of CPIII will be made and for future cash payments to such former
limited partners to be made upon and after the effective date of the settlement
if certain events occur. The settlement agreement will be reviewed at a
hearing scheduled for September 4, 1997, at which time it will be approved or
not. Upon request, a copy of the settlement agreement as filed with the court
will be provided by the Purchaser or the Information Agent.
The Partnership owns a limited partnership interest in Genzyme Development
Partners, L.P. ("GDP"). Of the products funded by GDP, only Seprafilm has been
approved for marketing in the United States by the Food and Drug Administration
("FDA"). A second product, Sepracoat, was not recommended for approval by an
FDA advisory panel on May 5, 1997. GDP has entered into a joint venture to
manufacture and market Seprafilm, and shares profits of the joint venture with
Genzyme. As of the date of this Offer, there has been no income resulting from
the joint venture and, as a result, no
13
distributions have been made to the Partnership. Genzyme Development
Corporation II, the general partner of GDP, has indicated that no cash
distributions will be made to its limited partners in 1997. Genzyme has an
option to purchase the outstanding partnership interests in GDP for a
lump-sum cash payment and certain future royalty payments.
The Partnership owns approximately 11% of the Class A limited partnership
interests in Synergen Clinical Partners, L.P. ("SCP"). In 1991, Xxxxxxxx
formed SCP to fund the research and development of Interleukin-Receptor
Antagonist ("IL-lra") as a potential treatment of various inflammatory
diseases, with an emphasis on sepsis and rheumatoid arthritis. Synergen
terminated its research and development program for sepsis in August 1994, and,
in December 1994, Synergen was acquired by Amgen Inc. Research into the
potential use of IL-lra for rheumatoid arthritis is ongoing. In February 1995,
a Class A limited partner of SCP commenced an action against the general
partner of SCP and others (the "Xxxxxxx Action"). The complaint sought damages
on behalf of a class including limited partners of SCP and limited partners of
the Partnership. In February 1997, the parties announced a proposed settlement
of the Xxxxxxx Action, pursuant to which the defendants would pay $14,550,000,
less attorney's fees and costs, to class members, (of which approximately 11%
would go to the Partnership) and the limited partners' interests in SCP would
be terminated. The settlement is conditioned on, among other things, the
approval of two-thirds of the current limited partnership interests in SCP and
final court approval. The General Partner has concluded that the proposed
settlement is inadequate and not in the best interests of the Partnership.
Accordingly, the General Partner, on behalf of the Partnership, has opposed the
proposed settlement. On June 19, 1997 the parties and the General Partner
advised the court that they had reached an agreement in principal to supplement
the proposed settlement and to resolve the Partnership's objection. The
agreement was subject to final documentation. The court ordered that such
documentation be filed by July 3, 1997. On July 3, the parties informed the
court that they had been unable to reach agreement on final documentation.
In addition to these investments, as of June 30, 1997, the Partnership
held cash, marketable securities, and warrants in the amounts indicated in the
abstracted portion of the Partnership 10-Q outlined below.
Market Value
At 6/30/97
------------
Cash $1,052,821
Centocor stock
2,800 shares 86,975
Cygnus warrant
255,000 shares at $9.90 1,874,252
Cayenne Software, Inc. warrant
193,000 shares at $16.19 -- (1)
----------
Total 3,014,048
----------
----------
-----------------------
(1) Expired in June 1997.
Distributions to the limited partners from the Partnership have been made
PRO RATA in accordance with their respective net capital contributions. See
Section 13.
Set forth below is certain selected consolidated financial information,
with respect to the Partnership excerpted from annual and quarterly reports of
the Partnership. More comprehensive financial information is included in such
reports and other documents filed by the Partnership with the Commission, and
the following summary is qualified in its entirety by reference to such reports
and other documents and all the financial information (including any related
notes) contained therein. Such reports and other
14
documents should be available for inspection and copies should be obtainable
in the manner set forth below under "Available Information."
Selected Statements of Operations
(unaudited)
6 Months
ended For the Years ended December 31,
June 30, -----------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
------------- -------- ---------- ----------- ---------- ----------- ------------
Revenues $6,337,549(1) $583,230 $7,133,197 $10,743,055 $8,957,023 $ 1,759,829 $ 3,283,164
Net Income 6,219,793 226,748 6,431,753 9,385,257 1,429,144 (9,317,951) (14,703,417)
Net Income (loss) per Unit
Limited Partners $ 746(2) $ 27 $ 771 $ 1,125 $ 171 $ (1,116) $ (1,763)
General Partner 62,198 2,267 64,318 93,853 14,291 (101,832) (147,034)
--------------------
(1) Includes $4,325,000 from one-time sales of Partnership assets,
consisting of: $3,325,000 from the exercise of Centocor's purchase option
to acquire the Partnership's limited partnership interest in CPIII and
$1,000,000 from sale of OEC warrant.
(2) Includes $520 from one-time sales of Partnership assets, consisting of:
$400 from the exercise of Centocor's purchase option to acquire the
Partnership's limited partnership interest in CPIII and $120 from sale of
OEC warrant.
15
Statements of Operations
(unaudited)
Six Months Ended
June 30,
-------------------
1997 1996
---- ----
Revenues:
Interest Income $ 56,322 $ 21,111
Income from product development project 5,053,100(1) 205,487
Unrealized (depreciation) appreciation
of investments and marketable securities 688,127 (1,955,300)
Gain on sale of investment 540,000 (53,421)
---------- ------------
$6,337,549 ($1,782,123)
Expenses:
Expenditures under product development projects 20,483 --
Management fee -- 137,010
General and administrative costs 97,273 103,328
---------- ------------
$117,756 $ 240,338
---------- ------------
Net income (loss) $6,219,793 ($2,022,461)
---------- ------------
---------- ------------
Net income (loss) per unit
Limited partner $746(2) ($242)
General partner 62,198 (20,224)
--------------------
(1) Includes $4,325,000 from one-time sales of Partnership assets,
consisting of: $3,325,000 from the exercise of Centocor's purchase option
to acquire the Partnership's limited partnership interest in CPIII and
$1,000,000 from sale of OEC warrant.
(2) Includes $520 from one-time sales of Partnership assets, consisting of:
$400 from the exercise of Centocor's purchase option to acquire the
Partnership's limited partnership interest in CPIII and $120 from sale of
OEC warrant.
Selected Statements of Financial Condition
(unaudited)
For the Periods Ended
--------------------------------
June 30, 1997 December 31, 1996
------------- -----------------
Assets
Cash $ 6,998 $ 5,028
Marketable securities, at market value 1,139,796 899,197
Investments, at fair value 1,874,252 1,633,000
Due from product development project 900,000 --
Advances to product development projects -- 135,519
Royalty income receivable 6,600 774,834
---------- ----------
Total Assets $3,927,646 $3,447,578
---------- ----------
---------- ----------
Liabilities and partners' capital
Due to product development project -- $ 297,000
Accrued liabilities 75,725 97,188
Partners' capital 3,851,921 3,053,390
---------- ----------
Total liabilities and partners' capital $3,927,646 $3,447,578
---------- ----------
---------- ----------
16
AVAILABLE INFORMATION. The Partnership is subject to the information
filing requirements of the Exchange Act. In accordance with the requirements
of the Exchange Act, the Partnership 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 000 Xxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000, and also should be available for inspection and
copying at the regional offices of the Commission located at Northwestern
Atrium Center, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000-0000; and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies may be obtained upon payment of the Commission's prescribed fees by
writing to its principal office at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000. Such material can also be obtained at the office of the National
Association of Securities Dealers, Inc., 0000 X Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000-1506. In addition, the Commission maintains a Web site
(xxxx://xxx.xxx.xxx) that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Partnership contained in this Offer to Purchase has been taken
from or is based upon publicly available documents on file with the
Commission or a court and other publicly available information. Although the
Purchaser and the Funds do not have any knowledge that any such information
is untrue, the Purchaser and the Funds take no responsibility for the
accuracy or completeness of such information or for any failure by the
Partnership to disclose events that may have occurred and may affect the
significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING PURCHASER
BioRoyalties, L.L.C., a Delaware limited liability company, was formed
in August 1997 to act as nominee for Pharmaceutical Royalties, L.L.C., a
Delaware limited liability company formed in July 1996 and Pharmaceutical
Royalty Investments Ltd., a Bermuda company formed in May 1996, each of which
has been organized to invest in royalty interests and contingent payment
rights ("CPRs") which derive cash payments based on the sale of
pharmaceutical and biotechnology products. Units acquired by Pharmaceutical
Royalty Investments Ltd. pursuant to the Offer will be assigned to certain of
its subsidiaries. The Purchaser and the Funds are managed by Pharmaceutical
Partners, L.L.C. ("PPLLC"). The principal executive offices of PPLLC are
located at 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000. PPLLC is the
sole member of the Purchaser. The name, business address, present principal
occupation or employment, five-year employment history and citizenship of
each member of PPLLC are set forth in Schedule I hereto.
Except as described in this Offer to Purchase, during the last five
years neither Purchaser, the Funds nor, to the best knowledge of Purchaser
and the Funds, any of the persons listed in Schedule I hereto (i) has been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, Federal or state
securities laws or finding any violation of such laws.
Except as described in this Offer to Purchase, (i) neither Purchaser,
the Funds or, to the best knowledge of Purchaser and the Funds, any of the
persons listed in Schedule I hereto or any affiliate of any such person,
beneficially owns or has a right to acquire any Unit and (ii) neither
Purchaser, the Funds or, to the best knowledge of Purchaser and the Funds,
any of the other persons referred to above, or any affiliate of any of the
foregoing, has effected any transaction in the Units during the past 60 days.
Except as described in this Offer to Purchase, (i) neither Purchaser,
the Funds or, to the best knowledge of Purchaser and the Funds, any of the
persons listed in Schedule I has any contract, arrangement, understanding or
relationship (whether or not legally enforceable) with any other person with
17
respect to any Units, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any Units, 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 contacts, negotiations or
transactions between Purchaser, the Funds or any of their affiliates or, to
the best knowledge of Purchaser and the Funds, any of the persons listed in
Schedule I hereto, on the one hand, and the Partnership or any of its
affiliates, on the other hand, that are required to be disclosed pursuant to
the rules and regulations of the Commission.
The following trades for 14.5 Units have been entered into by the
Purchaser, the Funds or their affiliates and are awaiting effective transfer
by the General Partner.
Trade Date Price per Unit Number of Units
----------------- -------------- ---------------
December 17, 1996 $1,580 0.50
March 31, 1997 $1,750 2.50
March 31, 1997 $1,750 0.50
March 31, 1997 $1,750 0.50
March 31, 1997 $1,750 0.50
March 31, 1997 $1,750 0.50
May 6, 1997 $2,301 2.00
July 9, 1997 $2,500 7.50
10. SOURCE AND AMOUNT OF FUNDS
Purchaser estimates that the maximum amount of funds required to
purchase Units pursuant to the Offer and to pay related costs and expenses
will be approximately $30.5 million. The Purchaser presently anticipates
that all amounts required for the purchase of Units and to pay related costs
and expenses will be funded from existing cash balances of the Purchaser and
the Funds.
11. BACKGROUND OF THE OFFER
BioRoyalties, L.L.C., a Delaware limited liability company, was formed
in August 1997 to act as nominee for Pharmaceutical Royalties, L.L.C., a
Delaware limited liability company formed in July 1996 and Pharmaceutical
Royalty Investments Ltd., a Bermuda company formed in May 1996, each of which
has been organized to invest in royalty interests and contingent payment
rights ("CPRs") which derive cash payments based on the sale of
pharmaceutical and biotechnology products. The Purchaser and the Funds are
managed by PPLLC. As a result, it is the business of the PPLLC to identify,
evaluate and acquire pharmaceutical royalty interests and CPRs. The
Partnership holds CPRs and limited partnership interests, the principal value
of which is in CPRs resulting from the Partnership's investment in CPIII.
PPLLC, on behalf of the Purchaser and the Funds, first formally
expressed its interest in the assets of the Partnership on February 27, 1997
in a letter addressed to the General Partner of the Partnership. After a
number of telephone calls to PaineWebber Development Corporation ("PWDC"),
the Manager of the Partnership, in which PPLLC was unable to schedule a
meeting to discuss its interest, on March 26, 1997, PPLLC made a written
offer to PWDC to acquire all of the assets of the Partnership for $23 million
in cash. PWDC did not respond to PPLLC's offer. Following the March 26
letter, PPLLC had a number of telephone conversations with PWDC regarding its
desire to meet in person to discuss the offer. PWDC expressed a desire to
delay the meetings until resolution of the litigation pending between the
Partnership and Centocor regarding a dispute over the payments to be made to
the holders of CPIII CPRs.
During April, PPLLC had a number of conversations regarding PWDC's
desire to delay discussions pending resolution of the litigation. In an
effort to accommodate the desires of PWDC, PPLLC agreed to delay meeting for
a period of time. As no announcement was made with respect to the litigation
18
within the specified time period, PPLLC had a number of discussions and
written correspondence with PWDC as to how to proceed.
On May 13, 1997, PPLLC executed a confidentiality agreement with PWDC
under which PWDC agreed to disclose to PPLLC the terms of a proposed
settlement agreement in the litigation, so that PPLLC could make a more
informed valuation of the assets of the Partnership. On May 21, 1997, PPLLC
met with PWDC, and was provided with a summary statement of the terms of the
proposed settlement. The summary did not disclose all of the terms of the
settlement, and PWDC refused to disclose the proposed settlement agreement
until it had been filed with the Delaware court and made public.
Following public disclosure of the settlement on June 6, 1997, PPLLC
revised its valuation of the CPIII CPRs held by the Partnership. On June 9,
1997, PPLLC again met with PWDC in order to make a revised offer for the
assets of the Partnership. At this meeting, PPLLC offered $29 million in
cash for all of the assets of the Partnership. PWDC indicated to PPLLC that
it would respond to PPLLC's offer within one week. PWDC also indicated that
the $29 million offer might be less than PWDC's opinion as to the value of
the assets.
On June 10, 1997, PPLLC sent PWDC a letter which included an analysis of
the required rate of return on an asset such as the CPIII CPRs, taking into
consideration that it is an asset with no liquid market and for which all of
the value is dependent on the future sales of a single pharmaceutical
product. On June 13, 1997, PWDC called PPLLC to inform PPLLC that PWDC still
believed that the value of the assets was greater than the price offered by
PPLLC.
Since there remained a continuing disagreement on the value of the
assets, PPLLC requested a meeting with PWDC to discuss possible approaches
going forward. On July 7, 1997, PPLLC met with PWDC again to discuss its
valuation of the Partnership and to inform PWDC that since PPLLC believed
that the offer it made was fair, the limited partners in the Partnership
should decide for themselves whether the offer was adequate. Consequently,
PPLLC requested from PWDC the list of names and addresses of limited partners
in order to make an offer to all Holders.
On July 8 and 9, 1997, PPLLC had a number of discussions with PWDC
regarding the conditions under which PWDC would provide the list of Holders.
On July 11, 1997, PPLLC received an indication from PWDC that, consistent
with the Partnership's policy for making available lists of limited partners,
there were a number of undertakings that PPLLC would have to make in order to
obtain the list. On July 14, 1997, PPLLC sent to PWDC a modified version of
these undertakings, and after an additional period of negotiations, arrived
on July 23, 1997 at an agreement under which PWDC would provide the list to
PPLLC.
Following receipt of the list, PPLLC retained the Information Agent and
commenced the Offer.
12. PURPOSE OF THE OFFER; PLANS FOR THE PARTNERSHIP
The purpose of the Offer is to enable the Purchaser and the Funds to
acquire Units in the Partnership. The Purchaser and the Funds are making
this Offer because the Funds believe that the Units represent an attractive
investment at the price offered. There can be no assurance, however, that
this belief is correct and, as a result, ownership of Units (either by the
Purchaser, the Funds or Holders who retain their Units) remains a speculative
investment. The Funds are acquiring the Units for investment purposes and do
not currently intend to make any effort to change the management or
operations of the Partnership and have no current plans for any extraordinary
transaction regarding the Partnership. Following the completion of the
Offer, the Purchaser, the Funds and their affiliates may acquire additional
Units. Any such acquisition may be made through private purchases, through
one or more future tender offers or by
19
any other means deemed advisable, and may be at prices higher or lower than
the price to be paid for the Units purchased in the Offer.
Except as noted in this Offer to Purchase, Purchaser and the Funds have no
present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, reorganization, liquidation or sale or transfer
of a material amount of assets involving the Partnership or any subsidiary, or
any other material changes in the partnership's capitalization, composition,
distribution policy, structure or business.
No appraisal rights are available to Holders in connection with the Offer.
13. DISTRIBUTIONS TO LIMITED PARTNERS
From inception through June 30, 1997, the Partnership distributed to its
limited partners $2,516 in cash and $7,206 in warrants and stock for total
distributions of $9,722 per Unit. Revenues received from Partnership
investments in the first quarter arose mostly from non-recurring distributions
from product development programs and liquidation of equity positions. During
the first six months of 1997, the Partnership received one-time payments
totaling $4,325,000 or $520 per Unit. Of this amount, the Partnership received
a one-time payment of $3,325,000, or approximately $400 per Unit, from its
investment in CPIII. The Partnership also received proceeds of $1,000,000, or
approximately $120 per Unit, from the sale of its warrant in OEC Medical
Systems, Inc.
6 Months
For the Years ended December 31, ended Inception
----------------------------------------------------------- June 30, to June 30,
1987-89 1990 1991 1992 1993 1994 1995 1996 1997 1997
------- ---- ---- ---- ------ ---- ----- ---- --------- -----------
Distributions per Unit
Cash Distributions -- $100 $100 $650 $ 555 $ 50 $ 130 $281 $650 $2,516
Non-cash Distributions 3,695 -- -- 305 1,421 238 1,547 -- -- 7,206
------ ---- ---- ---- ------ ---- ------ ---- ---- ------
Total Distributions $3,695 $100 $100 $955 $1,976 $288 $1,677 $281 $650 $9,722
------ ---- ---- ---- ------ ---- ------ ---- ---- ------
------ ---- ---- ---- ------ ---- ------ ---- ---- ------
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 Units
promptly after expiration or termination of the Offer), to pay for any Units
tendered, and may postpone the acceptance for payment or, subject to the
restriction referred to above, payment for any Units tendered, and may amend
or terminate the Offer (whether or not any Units have theretofore been
purchased or paid for) if, (i) Purchaser is not satisfied, in its sole
discretion, that, upon purchase of the Units pursuant to the Offer, it and/or
its nominee will have full rights to ownership as to all such Units and that
it or its nominee will become assignees of the purchased Units and a
substitute limited partner with respect to all such Units, (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 Units 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 Units, 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,
20
some or all of the Units pursuant to the Offer or otherwise, illegal,
(iii) seeks to impose limitations on the ability of Purchaser or the
Partnership or any of their respective affiliates effectively to acquire
or hold, or requiring Purchaser, the Partnership or any of their
respective affiliates to dispose of or hold separate, any portion of the
assets or the business of Purchaser or its affiliates or the Partnership
or its affiliates, or impose limitations on the ability of Purchaser,
the Partnership or any of their respective affiliates 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 Units
purchased by them, (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) to Purchaser;
(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 (vii) 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, (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 the Partnership which,
in the sole judgment of the Purchaser, is, or may be, materially adverse
to the Partnership, 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 Partnership; or
(E) a tender offer or exchange offer for some portion or all of the
Units 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 Units, or the Partnership shall have authorized, recommended, or
proposed, or shall have announced an intention to authorize, recommend,
or propose, any other material change in its capitalization; or
(F) any person or group shall have entered into a definitive agreement
or agreement in principle with the Partnership with respect to a merger,
consolidation or other business combination with the Partnership.
21
The foregoing conditions are for the sole benefit of Purchaser and its
affiliates and may be asserted by Purchaser regardless of the circumstances
(other than any action or inaction by Parent, Purchaser or any of their
affiliates) 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 the business of the Partnership and that might be
adversely affected by the Purchaser's acquisition of Units 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 Units
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 Units is subject to certain conditions, including
conditions relating to the legal matters discussed herein. Section 14 above
for certain conditions to the offer.
APPRAISAL RIGHTS. Holders will not have appraisal rights as a result of
the Offer.
MARGIN REQUIREMENTS. The Units 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 Xxxx-Xxxxx-Xxxxxx 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 Units contemplated by the Offer.
In addition, the Antitrust Division and the FTC scrutinize the legality of
acquisitions, mergers, and other commercial transactions. At any time before
or after the Purchaser's purchase of Units, the Antitrust Division of the FTC
could take such action as either deems necessary or desirable in the public
interest regarding such purchase, including seeking to enjoin the purchase of
Units pursuant to the Offer, the divestiture of Units purchased thereunder or
the divestiture of substantial assets of the Partnership. 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 The Xxxxxx Group to act as the Information Agent
and Depositary in connection with the Offer. The Xxxxxx Group will receive
reasonable and customary compensation for its services, will be reimbursed for
certain reasonable out-of-pocket expenses and will be indemnified against
22
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 Units
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 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 14D-1 pursuant to
Rule 14d-1 under the Exchange Act 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 9 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 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.
August 15, 1997
BIOROYALTIES, L.L.C.
PHARMACEUTICAL ROYALTIES, L.L.C.
PHARMACEUTICAL ROYALTY INVESTMENTS LTD.
23
SCHEDULE I
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 member of the Manager of the Purchaser and the Funds. The
Manager, Pharmaceutical Partners, L.L.C. is the sole member of the Purchaser.
The business address of each such person is 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX, 00000. Unless otherwise indicated below, each person is a
citizen of the United States.
XXXXXXX XXXXX-XXXXX, 45 years old, is a managing member of Pharmaceutical
Partners, L.L.C. ("PPLLC"), the Manager of the Purchaser. He currently serves
as Chairman and Chief Executive Officer of SUGEN, Inc., a biotechnology company
that he founded in 1991. Xx. Xxxxx-Xxxxx also served as non-executive Chairman
of the Board of Selectide Corporation, a drug discovery company he founded in
1990, until the sale of that company to Xxxxxx Xxxxxxx Dow in 1995. Prior to
founding SUGEN and Selectide, Xx. Xxxxx-Xxxxx had a 14 year career with
PaineWebber Inc. in which his last position was President of PaineWebber
Development Corporation and member of the Board of Directors of PaineWebber
Inc. Xx. Xxxxx-Xxxxx received a degree in Law from Trinity College, University
of Cambridge, England in 1972. Xx. Xxxxx-Xxxxx is a British citizen.
XXXXX XXXXXXXXX, 33 years old, is a Managing Member of PPLLC. Prior to
joining Pharmaceutical Partners in 1996, Xx. Xxxxxxxxx was employed by Lazard
Freres in New York. Prior to joining Lazard Freres in 1991, Xx. Xxxxxxxxx was
employed by the Lazard Houses in Paris, which he joined in 1988. Xx. Xxxxxxxxx
earned a degree in Industrial Engineering from Universidad Iberoamericana in
Mexico City, Mexico, in 1985. Xx. Xxxxxxxxx is a citizen of Mexico.
XXXXX XXXXXX, 34 years old, has been a Managing Member of PPLLC since
February 1997. Xx. Xxxxxx was most recently President, Chief Executive Officer
and Director of Selectide Corporation. Xx. Xxxxxx was employed by Selectide
from 1992 until the sale of the company to Xxxxxx Xxxxxxx Xxx in 1995. Prior
to joining Selectide, Xx. Xxxxxx was a Vice President of PaineWebber
Development Corporation, which he joined in 1987 as an Associate. Xx. Xxxxxx
received a B.S.E.E. degree, MAGNA CUM LAUDE, from Union College in Schenectady,
NY in 1984 and an M.B.A. from Columbia University in New York, NY in 1986.
XXXX XXXXX, 44 years old, is a Managing Member of PPLLC. He currently
serves as President of Biomatrix Corporation, which he joined in 1986. Prior
to joining Biomatrix Corporation, Xx. Xxxxx was interim President and Chief
Executive Officer of the RF&P Corporation from 1991 through 1995. Xx. Xxxxx
received a B.A. in Economics and Mathematics from Middlebury College in
Middlebury, VT and an M.B.A. from Columbia University in New York, NY.
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:
THE XXXXXX GROUP
BY TELEPHONE: BY MAIL: BY FACSIMILE:
(000) 000-0000 0000 Xxx Xxxxxxx Xxxxxx, 00xx Floor (000) 000-0000
(000) 000-0000 Dallas, TX 75201 (000) 000-0000
THE PURCHASER IS:
BIOROYALTIES, L.L.C.
BY TELEPHONE: BY MAIL: BY FACSIMILE:
(800) 600-0000 00 Xxxx 00xx Xxxxxx, 00xx Floor (000) 000-0000
(000) 000-0000 New York, NY 10022 (000) 000-0000
BY E-MAIL:
Xxx@xxxxxx-xxxxxxxx.xxx
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 the 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.
