Question
From: (redacted)
Sent: Tuesday, May 26, 2009 3:39 PM
To: Verne, B. Michael
Subject: Aggregation of "Assets" inSimultaneously Executed License Agreements
Mike,
Hoping all's well with you. I'm dealing with a pairof transactions and am trying to make sure that I'm applying
801.13 correctly with respect to whether or notthe value of the "assets" (of both licensing transactions) should beaggregated. The two agreements described below, although being simultaneouslyexecuted between the same parties, are independent such that neitheragreement's closing is in any way conditioned on the other's closing .
Agreement #1 has the necessary elements to render the license grant an"asset" (exclusivity even as to the grantor, the grant of manufacturing rights, etc.) and will be valuedby the acquirer in excess of the size-of-transaction threshold such that an HSRfiling will be triggered.
Agreement #2 claims, in its terms, to be granting exclusive licenses.However, although the licenses are termed exclusive, the precise compounds overwhich the exclusivity will be granted have yet to be identified and likely willnot be identified for a number of years. Treating the grants as "assets",the value of what is conveyed under Agreement #2 would fall below thesize-of-transaction threshold.
This leads to two separate lines of questions:
(1) Does thefact that both agreements were executed at the same time require both of theirvalues to be aggregated and for both to be referenced in the same HSR filingthat will address Agreement #1's grant? Does this change at all given thatAgreement #1 is "subject to the requirements" of the HSR Act, andthat a waiting period on it will be observed?
(2) Ifaggregation is required, and both agreements must be referenced in the same HSRfiling, are the parties allowed to "close" the acquisition of thelicense under Agreement #2 during the pendency of the waiting period? Myassumption is that yes, given that the only acquisition to be consummated atthat point would be one that is below threshold (namely the acquisition underAgreement #2). The only moment that the acquirer will hold in excess of thesize-of-transaction threshold will occur when the "assets" ofAgreement #1 are conveyed -which will only occur when the HSR waiting periodexpires or is terminated.
Please let me know if you need any more details onthe above, and thanks in advance for your thoughts.