United Therapeutics Corporation (NASDAQ:UTHR) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On June27, 2018, United Therapeutics Corporation (the “Company”) entered into a Credit Agreement (the “Credit Agreement”) with certain of its subsidiaries party thereto, as guarantors (the “Guarantors”), the lenders referred to therein, and Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and as a swingline lender. The Credit Agreement provides for (i)an unsecured revolving credit facility of up to $1.0 billion and (ii)a second unsecured revolving credit facility of up to $500 million (which facilities may, subject to obtaining commitments from existing or new lenders for such increase and subject to other conditions, be increased by up to $300 million in the aggregate). The facilities mature five years after the closing date of the Credit Agreement, subject to an ability of the lenders thereunder, or certain of the lenders thereunder, to elect to extend the maturity date of their commitments by one year following a request for such extension by the Company in accordance with the terms of the Credit Agreement, up to a maximum of two such extensions.
As of June27, 2018, Lung Biotechnology PBC is the only subsidiary of the Company required to be a Guarantor and guarantee the Company’s obligations under the Credit Agreement. From time to time, one or more additional subsidiaries of the Company may be required to guarantee the Company’s obligations under the Credit Agreement.
At the Company’s option, the loan will bear interest at either the LIBOR rate or a fluctuating base rate, in each case, plus an applicable margin that is determined on a quarterly basis based on the Company’s consolidated ratio of total indebtedness to EBITDA (as calculated in accordance with the Credit Agreement).
The proceeds of borrowings under the Credit Agreement are available to refinance certain existing indebtedness of the Company and its subsidiaries and/or for working capital and other general corporate purposes. Upon closing of the Credit Agreement on June27, 2018, the Company borrowed $250.0 million under the Credit Agreement, and used the funds to repay outstanding indebtedness under the 2016 Credit Agreement discussed under Item 1.01 below.
The Credit Agreement also contains customary affirmative and negative covenants that, among other things, limit the ability of the Company and its subsidiaries to (a)incur indebtedness; (b)grant liens; (c)enter into a merger, consolidation or amalgamation; (d)liquidate, wind up or dissolve; or (e)sell all or substantially all of their property, business or assets. In addition, as of the last day of each fiscal quarter, the Company must not permit its consolidated ratio of total indebtedness to EBITDA to be greater than 2.50 to 1.00 and its consolidated ratio of EBITDA to interest expense to be less than 3.00 to 1.00, in each case calculated in accordance with the Credit Agreement.
The Credit Agreement contains customary events of default, including a change of control. Upon the occurrence and continuation of an event of default, all amounts due under the Credit Agreement and the other loan documents become (in the case of a bankruptcy event), or may become (in the case of all other events of default and at the option of the lenders), immediately due and payable.
The foregoing summary is qualified by reference to the copy of the Credit Agreement attached hereto as Exhibit10.2.
Item 1.01 Termination of a Material Definitive Agreement.
On June27, 2018, the Company paid off and terminated all of its obligations under its Credit Agreement (the “2016 Credit Agreement”), dated as of January29, 2016, with Wells Fargo, as administrative agent and as a swingline lender, the lenders referred to therein, and the guarantors party thereto. There were no penalties associated with the early termination of the 2016 Credit Agreement.
Item 1.01. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As described at Item 1.01 below, on June26, 2018, at the Company’s 2018 Annual Meeting of Shareholders, the Company’s shareholders approved an amendment and restatement (the “2018 Restatement”) of the United Therapeutics Corporation 2015 Stock Incentive Plan (the “Plan”). The 2018 Restatement had previously been
