Attached files
| file | filename |
|---|---|
| EX-10.1 - PDL BIOPHARMA, INC. | v199983_ex10-1.htm |
| EX-10.3 - PDL BIOPHARMA, INC. | v199983_ex10-3.htm |
| EX-4.1 - PDL BIOPHARMA, INC. | v199983_ex4-1.htm |
| EX-99.1 - PDL BIOPHARMA, INC. | v199983_ex99-1.htm |
| EX-10.2 - PDL BIOPHARMA, INC. | v199983_ex10-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): October 27,
2010
PDL
BioPharma, Inc.
(Exact
name of Company as specified in its charter)
000-19756
(Commission
File Number)
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Delaware
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94-3023969
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|
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(State
or Other Jurisdiction of
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(I.R.S.
Employer Identification No.)
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|
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Incorporation)
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932
Southwood Boulevard
Incline
Village, Nevada 89451
(Address
of principal executive offices, with zip code)
(775)
832-8500
(Company’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Company under any of the following
provisions:
|
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement.
On
October 27, 2010, PDL BioPharma, Inc. (the “Company”) announced that it has
entered into separate privately negotiated exchange agreements under which it
will retire $92.0 million in aggregate principal of the Company’s outstanding
2.00% Convertible Senior Notes due February 15, 2012 (the “Existing
Notes”). Holders of the Existing Notes will receive $92.0 million in
aggregate principal of new 2.875% Convertible Senior Notes due February 15, 2015
(the “New Notes”). Following the exchange, $136.0 million of the
Existing Notes will remain outstanding.
In
addition, the Company announced that it entered into privately negotiated
agreements to place an additional $88.0 million in aggregate principal of the
New Notes for cash. The net cash proceeds from the issuance of such
New Notes will be used for corporate, capital management and business
development purposes.
The
issuance of the New Notes will not be registered under the Securities Act of
1933, as amended (the “Securities Act”), in reliance on exemption from
registration provided by Section 4(2) thereof. The shares of the
Company’s common stock issuable upon the conversion of the New Notes have been
reserved for issuance by the Company and listed on the NASDAQ Stock
Market.
The
agreements executed in connection with the issuance of the New Notes contain
representations and warranties to support the Company’s reasonable belief that
the holders and investors (i) had access to information concerning the Company’s
operations and financial condition, (ii) are either accredited investors or
qualified institutional buyers as defined by the rules promulgated under the
Securities Act and (iii) are not affiliates of the Company, among other
matters.
The New
Notes will be issued pursuant to an indenture between the Company, as issuer,
and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “New Notes
Indenture”).
The
following table outlines the terms of the New Notes:
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New
Notes – Summary of Terms
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Principal
Amount
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$180,000,000
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Ranking
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Senior
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Interest
Rate
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2.875%
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Conversion
Price
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$7.11
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Dividend
Threshold Amount for Calculation of Adjustment to Conversion
Rate
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$0.00
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Maturity
Date
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2/15/2015
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Optional
Redemption
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The
Company may redeem the New Notes, at any time on or after August 15, 2014,
on at least 10 days and no more than 60 days notice, in whole or in part,
at a redemption price equal to 100% of the New Notes to be redeemed
together with accrued but unpaid interest thereon
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Registration
Rights
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No
registration rights. In accordance with Rule 144 under the
Securities Act, New Notes issued solely in exchange for Existing Notes,
and the shares of common stock into which such New Notes are convertible,
will be freely tradable immediately upon issuance. All other
New Notes (whether issued to an investor for cash or both in an exchange
for Existing Notes and for cash) and the shares of common stock into which
such New Notes are convertible will be restricted securities but eligible
for resale in accordance with the requirements of Rule 144A under the
Securities Act
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Conversion
by Holders
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The
New Notes are freely convertible at any time prior to the
maturity
Settlement
in common stock only, except for cash payments for fractional
shares
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Limitation
on Remedies for Event of Default Relating to a Filing
Failure
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For
the first 180 days after the occurrence of an event of default relating to
a filing failure, the Company may elect to pay an extension fee accruing
at the rate of 1% per annum of the aggregate principal amount of the New
Notes outstanding at that time
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Adjustment
to the Conversion Rate upon a Fundamental Change
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Payable
in additional shares of common stock, as set forth in the New Notes
Indenture
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Qualification
under Trust Indenture Act
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The
New Notes Indenture will not be qualified under the Trust Indenture Trust
Act and holders will not be entitled to the protection of any provisions
of the Trust Indenture Act
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This Current Report on Form 8-K does
not constitute an offer to sell, or a solicitation of an offer to buy, any
security and shall not constitute an offer, solicitation or sale in any
jurisdiction in which such offering would be unlawful. The exchange
and issuance is expected to close on or about November 1, 2010.
The
foregoing description of the terms of the New Notes and the New Notes Indenture
is qualified in its entirety by reference to the full text of the form of New
Note and form of New Notes Indenture filed as Exhibit 4.1 to this Current Report
on Form 8-K. A copy of the basic forms of exchange and purchase
agreements are attached hereto as Exhibits 10.1, 10.2 and 10.3 and are
incorporated herein by reference.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Certain information required by Item
2.03 is contained in Item 1.01 and is incorporated by reference.
The New
Notes will be senior unsecured obligations and will rank equally with all of the
Company’s existing and future senior debt and will be senior to all its future
subordinated debt and will be structurally subordinated to all existing and
future indebtedness and other liabilities of the Company’s subsidiaries. In
addition, the New Notes will be effectively subordinated to all of the Company’s
existing and future secured debt to the extent of the collateral securing such
debt.
The New
Notes are subject to acceleration upon the occurrence of an “event of default”
as set forth in the New Notes Indenture, which consists generally of (i) default
in the payment of any interest on any New Note when the same becomes due and
payable and the default continues for a period of 30 days, (ii) default in the
payment of any principal of (including, without limitation, any premium, if any,
on) any New Note when the same becomes due and payable, (iii) failure to comply
with any of the Company’s other agreements contained in the New Notes or the New
Notes indenture and the default continues for the period and after the specified
notice, (iv) default in the payment of the purchase price of any New Note when
the same becomes due and payable (v) failure to provide notice of a Fundamental
Change (as that term is defined in the New Notes Indenture) to the Trustee and
to each holder of the New Notes (a “Holder”) if required by Section 3.9 of the
New Notes Indenture for a period of 30 days after notice of failure to do so,
(vi) any indebtedness of the Company or any significant subsidiary (as defined
in Rule 1-02 of Regulation S-X under the Securities Act of 1933, as amended
(the “Securities Act”)) with an aggregate outstanding principal amount then
outstanding in excess of $25,000,000 is not paid at final maturity thereof
(either at its stated maturity or upon acceleration thereof), and such
indebtedness is not discharged, or such acceleration is not rescinded or
annulled, within a period of 30 days after written notice of such default
has been delivered to the Company by Holders of at least 25% in aggregate
principal of the New Notes then outstanding and (vii) certain events of
bankruptcy, insolvency or reorganization of the Company or any of its
significant subsidiaries (as defined in Rule 1-02 of Regulation S-X under the
Securities Act).
The New
Notes also provide the holders thereof the right, under certain circumstances,
to require the Company to repurchase any or all of the New Notes held by such
holder for cash at an amount equal to 100% of the principal amount of the New
Notes to be repurchased plus accrued and unpaid interest upon the occurrence of
a Fundamental Change (as defined in the New Notes Indenture).
The
foregoing description of the terms of the New Notes indenture and the New Notes
is qualified in its entirety by reference to the full text of the form of New
Notes Indenture and form of New Note filed as Exhibit 4.1 to this Form
8-K.
Item
3.02 Unregistered Sales of Equity Securities.
Certain information required by Item
3.02 is contained in Item 1.01 and is incorporated by reference. The
Company will issue the New Notes in reliance on the exemption from the
registration requirements of the Securities Act provided by Section 4(2) of the
Securities Act and Rule 506 of Regulation D promulgated thereunder.
A Holder
may convert the principal amount of a New Note into the Company’s common stock
at any time prior to the close of business on the last business date prior to
February 15, 2015, at the conversion rate in effect on the date of
conversion. The Company will not issue fractional shares of common
stock upon conversion of New Notes. The Company will instead pay an
amount in cash for the current market value of the fractional
shares.
The
conversion rate is subject to certain anti-dilution adjustments, as fully set
forth in the New Notes Indenture, upon the occurrence of certain events,
including (i) dividend payments or distributions on the common stock payable
exclusively in shares of common stock, (ii) the issuance of rights or warrants
that allow common stockholders to purchase shares of common stock for a period
expiring within 60 days from the date of issuance of the rights or warrants at
less than the current market price, (iii) subdividing, splitting, combining or
reclassifying the outstanding shares of common stock or issuing by
reclassification of the shares of common stock any shares of the capital stock
of the Company, (iv) distribution to the common stockholders of evidences of
indebtedness, securities or assets or certain rights to purchase its securities,
but excluding certain distributions, (v) a distribution consisting exclusively
of cash to the common stockholders, (vi) a distribution of capital stock or
similar equity interest of or relating to a subsidiary of the Company, (vii)
a payment in respect of a tender offer or exchange offer by the Company or
one of its subsidiaries for the common stock or (viii) a payment in respect of a
repurchase of the common stock by the Company or one of its subsidiaries.
The
foregoing description of the terms of the New Notes Indenture and the New Notes
is qualified in its entirety by reference to the full text of the form of New
Notes Indenture and form of New Note filed as Exhibit 4.1 to this Form
8-K.
Item
8.01 Other Events.
A press release announcing the
transactions described herein is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
Cautionary
Statements
This
filing and the press release include “forward-looking statements” within the
meaning of Section 27A of the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we can give no
assurance that such expectations will prove to be correct. Important factors
that could impair the Company’s royalty assets or business are disclosed in the
“Risk Factors” contained in the Company’s 2009 Annual Report on Form 10-K and
other periodic reports filed with the Securities and Exchange Commission. All
forward-looking statements are expressly qualified in their entirety by such
factors. We do not undertake any duty to update any forward-looking statement
except as required by law.
Item
9.01 Financial Statements and Exhibits.
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Exhibit
No.
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Description
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4.1
10.1
10.2
10.3
99.1
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New
Notes Indenture
Form
of Exchange Agreement
Form
of Purchase Agreement
Form of Exchange and Purchase Agreement Press
Release, dated October 27, 2010
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| PDL BIOPHARMA, INC. | |||
| (Company) | |||
|
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By:
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/s/ Christine R. Larson | |
| Christine R. Larson | |||
| Vice President and Chief Financial Officer | |||
Dated: October
27, 2010
EXHIBIT
INDEX
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Exhibit
No.
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Description
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4.1
10.1
10.2
10.3
99.1
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New
Notes Indenture
Form
of Exchange Agreement
Form
of Purchase Agreement
Form
of Exchange and Purchase Agreement
Press
Release, dated October 27, 2010
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