Item 1.01 Entry into a Material Definitive Agreement.
On May 24, 2022, in connection with the closing of the transactions contemplated
by the Merger Agreement, Halozyme entered into that certain Credit Agreement
(the "Credit Agreement") with Bank of America, N.A., as Administrative Agent,
Swing Line Lender and an L/C Issuer, and the other lenders and L/C Issuers party
thereto, evidencing a credit facility (the "Facility") that provides for (x) a
$350 million revolving credit facility (the "Revolving Credit Facility") and
(y) a $250 million term loan facility (the "Term Facility"). The proceeds of the
Term Facility and the initial borrowings under the Revolving Credit Facility, in
addition to a portion of Halozyme's existing cash on hand, were used to pay the
Merger Consideration, refinance the Company's existing indebtedness and pay fees
and expenses in connection with the foregoing.
Halozyme, Inc., a wholly-owned subsidiary of Halozyme, and the Company guarantee
Halozyme's obligations under the Credit Agreement. The Facility will mature on
November 30, 2026, unless either the Revolving Credit Facility or the Term
Facility is extended prior to such date in accordance with the Credit Agreement.
The Credit Agreement contains an expansion feature, which allows Halozyme,
subject to certain conditions, to increase the aggregate principal amount of the
Facility, provided Halozyme remains in compliance with underlying financial
covenants on a pro forma basis including the consolidated interest coverage
ratio and the consolidated net leverage ratio covenants set forth in the Credit
Agreement, and the consolidated net leverage ratio shall be not greater than
0.25:1.00 less than the consolidated net leverage ratio then permitted under the
Credit Agreement.
In addition to paying interest on the outstanding principal under the Facility,
Halozyme will pay (i) a commitment fee in respect of the unutilized commitments
thereunder and (ii) customary letter of credit fees and agency fees. The
commitment fees range from 0.15% to 0.35% per annum based on Halozyme's
consolidated net leverage ratio.
Substantially all of the assets of Halozyme and the Guarantors (including the
Company) are pledged as collateral under the Facility (subject to customary
exceptions and excluding real property and intellectual property) pursuant to
the terms set forth in the Security Agreement (as defined in the Credit
Agreement) and Pledge Agreement, each dated as of May 24, 2022, and each
executed in favor of the administrative agent by Halozyme and the Guarantors.
Following the Closing, borrowings under the Revolving Credit Facility are to be
used by Halozyme to provide financing for working capital and other general
corporate purposes, including potential acquisitions.
Borrowings under the Facility bear interest, at Halozyme's option, at a rate
equal to an applicable margin plus: (a) the applicable Term SOFR (as defined in
. . .
Item 1.02 Termination of Material Definitive Agreement.
In connection with the consummation of the Merger, on May 24, 2022, the Company
repaid in full all amounts outstanding and terminated its Credit Agreement,
dated as of November 1, 2021, by and among the Company, the Lenders referred to
therein and Wells Fargo Bank, National Association, as administrative agent.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosures under the Introductory Note and Item 3.01 are incorporated
herein by reference.
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The disclosures under the Introductory Note and Item 1.02 are incorporated
herein by reference.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
The disclosures under the Introductory Note are incorporated herein by
reference.
On May 24, 2022, the Company (i) notified the Nasdaq Stock Market LLC ("Nasdaq")
of the consummation of the Merger and (ii) requested that Nasdaq (A) suspend
trading of the Shares effective before the opening of trading on May 24, 2022
and (B) file with the SEC a Form 25 Notification of Removal from Listing and/or
Registration to delist and deregister the Shares under Section 12(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a result,
the Shares will no longer be listed on Nasdaq. The Company intends to file with
the SEC a certification on Form 15 under the Exchange Act, requesting the
suspension of the Company's reporting obligations under Sections 13 and 15(d) of
the Exchange Act.
Item 3.03 Material Modification to Rights of Security Holders.
The disclosures under the Introductory Note, Item 3.01, Item 5.01 and Item 5.03
are incorporated herein by reference.
Item 5.01 Changes in Control of Registrant.
The disclosures under the Introductory Note, Item 3.01, Item 5.02 and Item 5.03
are incorporated herein by reference.
As a result of the consummation of the Offer and the Merger pursuant to
Section 251(h) of the DGCL, on May 24, 2022, there was a change in control of
the Company. At the Effective Time, the Company became a wholly-owned subsidiary
of Halozyme.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Pursuant to the Merger Agreement, effective as of the Effective Time, Leonard S.
Jacob, M.D., Ph.D., Thomas J. Garrity, Peter S. Greenleaf, Anton Gueth, Robert
P. Roche Jr., Karen Smith, M.D., Ph.D., Carmen B. Volkart, and Robert F. Apple
each ceased to be directors of the Company and members of any committee of the
Company's board of directors. These departures were not a result of any
disagreement between the Company and the directors on any matter relating to the
Company's operations, policies or practices.
Pursuant to the Merger Agreement, effective as of the Effective Time, Robert F.
Apple, Fred M. Powell, Peter J. Graham, Esq. and Peter C. Richardson, M.D. each
ceased to be officers of the Company.
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Further, pursuant to the Merger Agreement and effective immediately after the
Effective Time, each of Helen Torley, M.B. Ch.B., M.R.C.P., and Nicole LaBrosse
became the officers and directors of the Surviving Corporation. Information
regarding the new directors and officers of the Surviving Corporation has been
previously disclosed in the Tender Offer Statement on Schedule TO filed by
Halozyme and Purchaser with the SEC on April 26, 2022 (together with the
exhibits and annexes thereto and as amended or supplemented from time to time),
which is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Pursuant to the terms of the Merger Agreement, effective as of the Effective
Time, the Company's certificate of incorporation, as in effect immediately prior
to the Effective Time, was amended and restated in its entirety (the "Amended
and Restated Certificate of Incorporation"). In addition, pursuant to the terms
of the Merger Agreement, effective as of the Effective Time, the Company's
amended and restated by-laws, as in effect immediately prior to the Effective
Time, were amended and restated in their entirety (the "Second Amended and
Restated By-Laws").
Copies of the Amended and Restated Certificate of Incorporation and the Second
Amended and Restated By-Laws are filed as Exhibits 3.1 and 3.2, respectively, to
this Current Report on Form 8-K, and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
2.1 Agreement and Plan of Merger, dated April 12, 2022, by and among
Halozyme, Purchaser and the Company (incorporated by reference to
Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the
SEC on April 13, 2022).*
3.1 Amended and Restated Certificate of Incorporation of the Surviving
Corporation, dated May 24, 2022.
3.2 Second Amended and Restated By-Laws of the Surviving Corporation,
dated May 24, 2022.
10.1 Credit Agreement, dated as of May 24, 2022, by and among Halozyme
Therapeutics, Inc., the Guarantors, Bank of America N.A. and each of
those additional Lenders that are a party to such agreement
(incorporated by reference to Exhibit 10.1 to Halozyme's Current
Report on Form 8-K (File No. 001-32335) filed with the SEC on May 24,
2022).
10.2 Security Agreement, dated as of May 24, 2022, by and among Halozyme
Therapeutics, Inc., the Guarantors and Bank of America N.A
(incorporated by reference to Exhibit 10.2 to Halozyme's Current
Report on Form 8-K (File No. 001-32335) filed with the SEC on May 24,
2022).
104 Cover Page Interactive Date File (embedded within the Inline XBRL
document)
* Schedules to the Agreement and Plan of Merger have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. The registrant will furnish copies of any
such schedules to the U.S. Securities and Exchange Commission upon request.
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