Item 1.01 Entry into a Material Definitive Agreement.
On
The Term Credit Agreement provides for a senior unsecured term loan facility in
an aggregate principal amount of
Borrowings under the Term Loan Facility bear interest at a rate per annum equal
to, at F5's option, either (i) LIBOR, adjusted for customary statutory reserves,
plus a margin based on F5's leverage ratio ranging from 1.125% to 1.750% or (ii)
a base rate (determined in accordance with the Term Credit Agreement) plus a
margin based on F5's leverage ratio ranging from 0.125% to 0.750%. As of
The Term Loan Facility will amortize in equal quarterly installments (commencing
with the first full fiscal quarter ended after
Borrowings under the Term Loan Facility may be voluntarily prepaid, in whole or in part, without penalty or premium. The Term Credit Agreement contains customary representations, warranties, affirmative and negative covenants, including a financial covenant, events of default and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of subsidiary indebtedness, the incurrence of liens and fundamental changes, including, the sale of all or substantially all of the assets of F5 and its subsidiaries, taken as a whole, in each case, subject to certain exceptions. The financial covenant requires F5 to meet a quarterly leverage ratio.
The foregoing summary of the Term Loan Facility in this Item 1.01 does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the Term Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously disclosed, on
2
--------------------------------------------------------------------------------
Pursuant to the Merger Agreement, at the effective time of the Merger, all of
the shares of Shape (excluding shares (i) owned by Shape or any subsidiary of
Shape and (ii) held by Shape shareholders who perfect their dissenters' rights
with respect to the Merger), all of the other outstanding equity securities of
Shape and the vested and outstanding and unexercised stock options and
restricted stock units held by continuing employees of Shape were cancelled and
converted to the right to receive approximately
The foregoing description of the Merger Agreement is qualified in its entirety
by reference to the full text of the Merger Agreement, which was filed as
Exhibit 2.1 in a Current Report on Form 8-K filed with the
Item 2.03 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 of this Current Report on Form 8-K is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
F5 issued a press release on
Cautionary Note Regarding Forward-Looking Statements
This announcement contains "forward-looking statements" within the meaning of
the federal securities laws, including Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934. This
announcement contains forward-looking statements including, among other things,
statements regarding the continuing strength and momentum of F5's and Shape's
business, future financial performance, sequential growth, projected revenues
including target revenue and earnings ranges, income, earnings per share, share
amount and share price assumptions, share repurchases, demand for application
delivery networking, application delivery services, security, and software
products, expectations regarding future services and products, expectations
regarding future customers, markets and the benefits of products, and other
statements that are not historical facts and which are forward-looking
statements. Actual results could differ materially from those projected in the
forward-looking statements as a result of certain risk factors. Such
forward-looking statements involve risks and uncertainties, as well as
assumptions and other factors that, if they do not fully materialize or prove
correct, could cause the actual results, performance or achievements of the
company, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, but are not limited
to: customer acceptance of Shape and F5 offerings; potential disruptions to F5's
business and distraction of management as F5 integrates Shape's business and
technology; F5's ability to successfully integrate Shape's products with F5
technologies; the ability of F5's sales professionals and distribution partners
to sell Shape's product and service offerings; the timely development,
introduction and acceptance of additional new products and features by F5 or its
competitors; competitive factors, including but not limited to pricing
pressures, industry consolidation, entry of new competitors into F5's markets,
and new product and marketing initiatives by F5's competitors; increased sales
discounts; the business impact of the acquisition of Shape and potential adverse
reactions or changes to business or employee relationships, including those
resulting from the announcement or completion of the acquisition; uncertainties
as to the timing of the transaction; uncertain global economic conditions which
may result in reduced customer demand for F5's products and services and changes
in customer payment patterns; global economic conditions and uncertainties in
the geopolitical environment; overall information technology spending;
litigation involving patents, intellectual property, shareholder and other
matters, and governmental investigations; natural catastrophic events; a
pandemic or epidemic; F5's ability to sustain, develop and effectively utilize
distribution relationships; F5's ability to attract, train and retain qualified
product development, marketing, sales, professional services and customer
support personnel; F5's ability to expand in international markets; the
unpredictability of F5's sales cycle; F5's share repurchase program; future
prices of F5's common stock; and other risks and uncertainties described more
fully in F5's documents filed with or furnished to the
3
--------------------------------------------------------------------------------
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
2.1* Merger Agreement, datedDecember 19, 2019 , by and amongF5 Networks, Inc. ,Silhouette Merger Sub, Inc. ,Shape Security, Inc. , andShareholder Representative Services LLC (incorporated by reference to the registrant's Form 8-K filed onDecember 24, 2019 ). 10.1 Term Credit Agreement, dated as ofJanuary 24, 2020 , amongF5 Networks, Inc. , the lenders party thereto andJPMorgan Chase Bank, N.A ., as administrative agent. 99.1 Press Release, datedJanuary 24, 2020 (regarding announcement of closing). 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. * Schedules and annexes have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or annex will be furnished supplementally to theSecurities and Exchange Commission upon request. 4
--------------------------------------------------------------------------------
© Edgar Online, source