Item 1.02. Termination of a Material Definitive Agreement.
As previously disclosed, on November 1, 2018, Illumina, Inc. (the "Company")
entered into an Agreement and Plan of Merger (as amended, the "Merger
Agreement") with Pacific Biosciences of California, Inc. ("PacBio") and FC Ops
Corp., a wholly owned subsidiary of the Company ("Merger Subsidiary"). On
September 25, 2019, the Company, PacBio and Merger Subsidiary entered into
Amendment No. 1 to the Merger Agreement to, among other things, extend the End
Time (as defined in the Merger Agreement) to December 31, 2019, subject to the
Company's unilateral right to extend the End Time to March 31, 2020. On December
18, 2019, as previously announced, the Company elected to extend the End Time.
On January 2, 2020, the Company, PacBio and Merger Subsidiary entered into an
agreement to terminate the Merger Agreement (the "Termination Agreement").
Pursuant to the Termination Agreement, (1) the Merger Agreement was terminated;
(2) no later than January 6, 2020, the Company will make a cash payment to
PacBio of $98 million (which amount constitutes the Reverse Termination Fee (as
defined in the Merger Agreement)); and (3) the Company will make, which it would
have been obligated to make under the Merger Agreement, cash payments to PacBio
of $6 million on or before each of January 2, 2020, and March 2, 2020, and a
cash payment to PacBio of $22 million on or before February 3, 2020 (the
payments contemplated by this clause (3), the "Continuation Advances").
However, pursuant to the Termination Agreement, in the event that, on or prior
to September 30, 2020, PacBio enters into a definitive agreement providing for,
or consummates, a Change of Control Transaction (as defined in the Termination
Agreement), then PacBio will repay the Reverse Termination Fee (without
interest) to the Company in connection with the consummation of such Change of
Control Transaction. If such Change of Control Transaction is not consummated by
the two-year anniversary of the execution of the definitive agreement for such
Change of Control Transaction, then PacBio will not be required to repay the
Reverse Termination Fee.
In addition, up to the full amount of the Continuation Advances actually paid to
PacBio is repayable without interest to the Company if, within two years of
March 31, 2020, PacBio enters into a Change of Control Transaction or raises at
least $100 million in equity or debt financing in a single transaction (with the
amount repayable dependent on the amount raised by PacBio).
The Company and PacBio mutually agreed to terminate the Merger Agreement as a
result of the lengthy regulatory approval process both in the United States and
United Kingdom, and uncertainties regarding the ultimate outcome of the
regulatory process.
The foregoing summary of the Termination Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of
the Termination Agreement, which is attached as Exhibit 10.1 and
incorporated by reference herein.
Item 7.01. Regulation FD Disclosure.
On January 2, 2020, the Company and PacBio issued a joint press release
announcing entry into the Termination Agreement (the "Press Release"). A copy of
the Press Release is attached hereto as Exhibit 99.1 and incorporated by
reference herein.
In accordance with General Instruction B.2 of Form 8-K, the information set
forth in this Item 7.01, including Exhibit 99.1, is furnished pursuant to Item
7.01 and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities under that section, nor shall such information be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as shall be expressly set forth by
specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Agreement by and among Illumina, Inc., Pacific Biosciences of California,
Inc., and FC Ops Corp., dated January 2, 2020.
99.1 Press Release, dated January 2, 2020.
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