Foundation Medicine, Inc. (NASDAQ:FMI) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On July31, 2017, Foundation Medicine, Inc. (the “Company”) entered into an Amendment Letter Agreement (the “Amendment”) with Roche Finance Ltd (“Roche”), amending the Credit Facility Agreement, dated August2, 2016, between the Company and Roche (the “Existing Credit Facility” and as amended by the Amendment, the “Roche Credit Facility”). The effectiveness of the Amendment is subject to certain customary closing conditions. Roche is an affiliate of Roche Holdings, Inc., the Company’s majority stockholder.
The Amendment amends certain provisions of the Existing Credit Facility to provide for an extension of the period during which the Company may borrow funds from three to four years, ending August2, 2020 (the “Draw Period”), and an increase in the available funds from $100million to $200million, of which $80million is available immediately, $70million will be available upon the achievement of certain milestones, and $50million will be available upon the achievement of certain additional milestones. to the Amendment, loans made under the Roche Credit Facility will bear interest at 6.5%per annum, as compared to 5% under the Existing Credit Facility. The Company shall pay Roche quarterly during the Draw Period and for six months thereafter accrued interest on the outstanding principal of the loans. Beginning six months after the Draw Period and for five years thereafter, the Company shall pay Roche quarterly equal payments of principal, with accrued interest, in arrears until maturity of the Roche Credit Facility on February 02, 2026 (the “Final Maturity Date”). The Company shall also pay Roche a quarterly commitment fee of 0.4% per annum on the available commitment until the end of the Draw Period, as compared to 0.3% under the Existing Credit Facility. In addition, the prepayment fees and schedules were revised to be 4% of the prepaid amount during the Draw Period, 3% for the next 30 months, 2% for the next 12 months, 1% for the next 12 months, and no prepayment penalty during the last 12 months immediately prior to the Final Maturity Date. The other provisions of the Existing Credit Facility remain substantially unchanged.
The Roche Credit Facility is secured by a lien on all of the Company’s tangible and intangible personal property, including, but not limited to, shares of its subsidiaries (65% of the equity interests in the case of foreign subsidiaries), intellectual property, insurance, trade and intercompany receivables, inventory and equipment and contract rights, and all proceeds and products thereof (other than certain excluded assets).
The Roche Credit Facility contains certain affirmative covenants, including, among others, obligations for the Company to provide monthly and annual financial statements, to meet specified minimum cash requirements, to provide tax gross-up and indemnification protection, and to comply with laws. The Roche Credit Facility also contains certain negative covenants, including, among others, restrictions on the Company’s ability to dispose of certain assets, to acquire another company or business, to encumber or permit liens on certain assets, to incur additional indebtedness (subject to customary exceptions) and to pay dividends on the Company’s common stock.
The Roche Credit Facility also provides for a number of events of default, including, among others, defaults due to non-payment, bankruptcy, failure to comply with covenants, breaches of a representation and warranty, change of control, or material adverse effect and judgment defaults. The Roche Credit Facility is governed under the laws of Switzerland.
The foregoing summary of the Roche Credit Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference, and by reference to the full text of the Credit Facility Agreement, dated as of August2, 2016, by and between the Company and Roche, which was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August2, 2016.
Item 1.01. Results of Operations and Financial Condition.
On August1, 2017, Foundation Medicine, Inc. issued a press release announcing its financial and operating results for the quarter ended June30, 2017. A copy of the press release is being furnished as Exhibit 99.1 to this Report on Form 8-K.
The information in this Report on Form 8-K and Exhibit 99.1 attached hereto is intended to be furnished and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 1.01. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The discussion in Item 1.01 of this Current Report on Form 8-K regarding the Roche Credit Facility is hereby incorporated in its entirety into this Item 1.01 by reference.
Item 1.01. Financial Statements and Exhibits.
|10.1||Amendment Letter Agreement, dated as of July31, 2017, by and between Foundation Medicine, Inc. and Roche Finance Ltd.|
|99.1||Press release issued by Foundation Medicine, Inc. dated August1, 2017, furnished hereto.|
Foundation Medicine, Inc. ExhibitEX-10.1 2 d433234dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 Foundation Medicine,…To view the full exhibit click
About Foundation Medicine, Inc. (NASDAQ:FMI)
Foundation Medicine, Inc. is a molecular information company. The Company sells products that are enabled by its molecular information platform to physicians and biopharmaceutical companies. The Company’s segment is the business of delivering molecular information about cancer to its customers. Its products provide genomic information about each patient’s individual cancer, enabling physicians to optimize treatments in clinical practice and biopharmaceutical companies to develop targeted oncology therapies. Its flagship clinical molecular information products, FoundationOne for solid tumors, and FoundationOne Heme for blood-based cancers or hematologic malignancies, including leukemia, lymphoma, myeloma and advanced sarcomas, are genomic profiles designed for use in the routine care of patients with cancer. Its other products include FoundationACT (Assay for Circulating Tumor deoxyribonucleic acid (DNA)), GeneKit, FoundationCORE, FoundationICE and the SmartTrials program.