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): December 30, 2009
Emergent BioSolutions Inc.
(Exact Name of Registrant as Specified in Charter)
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Delaware
(State or Other Jurisdiction
of Incorporation)
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001-33137
(Commission
File Number)
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14-1902018
(IRS Employer
Identification No.) |
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2273 Research Boulevard, Suite 400, Rockville, Maryland
(Address of Principal Executive Offices)
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20850
(Zip Code) |
Registrant’s telephone number, including area code: (301) 795-1800
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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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. |
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Entry into a Material Definitive Agreement. |
On December 30, 2009, Emergent BioDefense Operations Lansing Inc. (“Emergent BioDefense
Operations”), a wholly owned subsidiary of Emergent BioSolutions Inc. (the “Registrant”), entered
into a Loan Agreement (the “New Loan Agreement”) with HSBC Realty Credit Corporation (USA) (“HSBC”)
in order to refinance its $30 million term loan with HSBC (the “Original Term Loan”) under a prior
loan agreement entered into on June 29, 2007 (the “Original Loan Agreement”). Additional
information regarding the New Loan Agreement is set forth below in Item 2.03 and is incorporated by
reference in this Item 1.01 in its entirety.
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| Item 1.02. |
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Termination of a Material Definitive Agreement. |
In connection with entering into the New Loan Agreement, on December 30, 2009, Emergent BioDefense
Operations and HSBC terminated the Original Loan Agreement under which HSBC had provided Emergent
BioDefense Operations with the Original Term Loan. Emergent BioDefense Operations was required to
make monthly payments under the Original Term Loan in the amount of $250,000 in principal plus
accrued interest beginning in August 2007, with a residual principal payment due upon maturity in
June 2012. The annual interest rate was based on 30-day LIBOR plus 2.75%.
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| Item 2.03. |
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant. |
The information set forth in Item 1.01 above with respect to the New Loan Agreement is incorporated
by reference in this Item 2.03 in its entirety.
Under the New Loan Agreement, HSBC provided Emergent BioDefense Operations with a term loan of
$22.75 million (the “New Term Loan”), which was approximately the amount of principal remaining
under the Original Term Loan as of December 30, 2009. Emergent BioDefense Operations is required to
make monthly payments under the New Term Loan in the amount of
approximately $126,000 in principal plus accrued
interest beginning in January 2010, with a residual principal payment due upon maturity in
December 2014. The annual interest rate is based on 90-day LIBOR plus 3.25%. The
Registrant has guaranteed the payment obligations of Emergent BioDefense Operations relating to the
New Term Loan. In addition, payment of the New Term Loan is secured by substantially all of the
assets of Emergent BioDefense Operations, other than accounts receivable under BioThrax supply
contracts with the U.S. Department of Defense and U.S. Department of Health and Human Resources
that are pledged as collateral by Emergent BioDefense Operations to secure a $15 million revolving
line of credit with Fifth Third Bank.
Payment obligations relating to the New Term Loan may be accelerated upon the occurrence of an
event of default under the New Loan Agreement. Events of default under the New Loan Agreement
include, subject in some cases to specified cure periods, payment defaults; inaccuracy of
representations and warranties in any material respect; defaults in the observance or performance
of covenants; bankruptcy and insolvency related defaults; events of default under certain other
indebtedness; the entry of one or more final judgments for the payment of more than $1 million that
are not satisfied within 60 days; uninsured loss or destruction of a material portion of the
collateral; invalidity of loan documents relating to the New Term Loan; unauthorized payment of
subordinated creditors; and the occurrence of a material adverse change in financial condition.
The New Loan Agreement contains affirmative and negative covenants customary for financings of this
type. Negative covenants in the New Loan Agreement limit the ability of Emergent BioDefense
Operations to incur indebtedness and liens; sell assets; make loans, advances or guarantees; enter
into mergers or similar transactions; and enter into transactions with affiliates. The New Loan
Agreement also limits the ability of the Registrant to incur indebtedness and liens; enter into
mergers or similar transactions; and enter into transactions with affiliates.
Emergent
BioDefense Operations paid HSBC a commitment fee of approximately $57,000 in connection with the
establishment of the New Loan Agreement.