Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
Merger Consideration
At the Effective Time, each share of common stock, par value
As of a mutually agreed date no earlier than 48 hours (excluding Sundays and holidays) prior to the Effective Time (such date, the "Determination Date"), each of OCSI and OCSL will deliver to the other a calculation of its net asset value as of such date (such calculation with respect to OCSI, the "Closing OCSI Net Asset Value" and such calculation with respect to OCSL, the "Closing OCSL Net Asset Value"), in each case using a pre-agreed set of assumptions, methodologies and adjustments. Based on such calculations, the parties will calculate the "OCSI Per Share NAV", which will be equal to (i) the Closing OCSI Net Asset Value divided by (ii) the number of shares of OCSI Common Stock issued and outstanding as of the Determination Date (excluding any Cancelled Shares), and the "OCSL Per Share NAV", which will be equal to (A) the Closing OCSL Net Asset Value divided by (B) the number of shares of OCSL Common Stock issued and outstanding as of the Determination Date. The "Exchange Ratio" will be equal to the quotient (rounded to four decimal places) of (i) the OCSI Per Share NAV divided by (ii) the OCSL Per Share NAV.
OCSI and OCSL will update and redeliver the Closing OCSI Net Asset Value or the Closing OCSL Net Asset Value, respectively, in the event of a material change to such calculation between the Determination Date and the closing of the Mergers and if needed to ensure that the calculation is determined within 48 hours (excluding Sundays and holidays) prior to the Effective Time.
Representations, Warranties and Covenants
The Merger Agreement contains customary representations and warranties by each
of OCSI,
The Merger Agreement provides that each of OCSI and OCSL may not solicit
proposals relating to alternative transactions, or, subject to certain
exceptions, enter into discussions or negotiations or provide information in
connection with any proposal for an alternative transaction. However, the OCSI
board of directors may, subject to certain conditions and in some instances
payment by the party submitting the superior proposal of a termination fee of
approximately
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inconsistent with the OCSI's directors exercise of their fiduciary duties under
applicable law (taking into account, among other factors, any changes to the
Merger Agreement proposed by OCSL). In addition, the OCSL board of directors
may, subject to certain conditions and in some instances payment by the party
submitting the superior proposal of a termination fee of approximately
Conditions to the Mergers
Consummation of the Mergers, which is currently anticipated to occur during the first half of calendar year 2021, is subject to certain closing conditions, including (1) requisite approvals of OCSI's and OCSL's stockholders, (2) authorization of the shares of OCSL common stock to be issued as consideration in the Mergers for listing on the Nasdaq Global Select Market, (3) effectiveness of the registration statement for the OCSL common stock to be issued as consideration in the Mergers, (4) the absence of certain legal impediments to the consummation of the Mergers, (5) required regulatory approvals (including expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended), (6) determinations of closing NAV in accordance with the terms of the Merger Agreement and (7) subject to certain exceptions, the accuracy of the representations and warranties and compliance with the covenants of each party to the Merger Agreement.
Termination
The Merger Agreement also contains certain termination rights in favor of OCSI
and OCSL, including if the Mergers are not completed on or before
General
The foregoing summary description of the Merger Agreement and the transactions contemplated thereby is subject to and qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and the terms of which are incorporated herein by reference.
The Merger Agreement has been filed as Exhibit 2.1 to this Current Report on Form 8-K in order to provide investors and security holders with information regarding its terms. It is not intended to provide any other information about the parties thereto or their respective subsidiaries and affiliates. The Merger Agreement contains representations, warranties, covenants and agreements that were made only for purposes of the Merger Agreement and as of specific dates; were solely for the benefit of the parties to the Merger Agreement (except as may be expressly set forth in the Merger Agreement); may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors and security holders should not rely on such representations, warranties, covenants or agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any of the parties to the Merger Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties, covenants and agreements may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the parties to the Merger Agreement.
Management Fee Waiver . . .
Item 7.01. Regulation FD Disclosure.
On
On
The information disclosed under this Item 7.01, including Exhibits 99.1 and 99.2 hereto, is being "furnished" and is not deemed "filed" by OCSL for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor is it deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Forward-Looking Statements
Some of the statements in this document constitute forward-looking statements
because they relate to future events, future performance or financial condition
or the Mergers. The forward-looking statements may include statements as to:
future operating results of OCSI and OCSL and distribution projections; business
prospects of OCSI and OCSL and the prospects of their portfolio companies; and
the impact of the investments that OCSI and OCSL expect to make. In addition,
words such as "anticipate," "believe," "expect," "seek," "plan," "should,"
"estimate," "project" and "intend" indicate forward-looking statements, although
not all forward-looking statements include these words. The forward-looking
statements contained in this document involve risks and uncertainties. Certain
factors could cause actual results and conditions to differ materially from
those projected, including the uncertainties associated with (i) the timing or
likelihood of the Mergers closing; (ii) the expected synergies and savings
associated with the Mergers; (iii) the ability to realize the anticipated
benefits of the Mergers, including the expected elimination of certain expenses
and costs due to the Mergers; (iv) the percentage of OCSI and OCSL stockholders
voting in favor of the proposals submitted for their approval; (v) the
possibility that competing offers or acquisition proposals will be made;
(vi) the possibility that any or all of the various conditions to the
consummation of the Mergers may not be satisfied or waived; (vii) risks related
to diverting management's attention from ongoing business operations; (viii) the
risk that stockholder litigation in connection with the Mergers may result in
significant costs of defense and liability; (ix) changes in the economy,
financial markets and political environment; (x) risks associated with possible
disruption in the operations of OCSI and OCSL or the economy generally due to
terrorism, natural disasters or the COVID-19 pandemic; (xi) future changes in
laws or regulations (including the interpretation of these laws and regulations
by regulatory authorities); (xii) conditions in OCSI's and OCSL's operating
areas, particularly with respect to business development companies or regulated
investment companies; (xiii) general considerations associated with the COVID-19
pandemic; and (xiv) other considerations that may be disclosed from time to time
in OCSI's and OCSL's publicly disseminated documents and filings. OCSI and OCSL
have based the forward-looking statements included in this document on
information available to them on the date hereof, and they assume no obligation
to update any such forward-looking statements. Although OCSI and OCSL undertake
no obligation to revise or update any forward-looking statements, whether as a
result of new information, future events or otherwise, you are advised to
consult any additional disclosures that they may make directly to you or through
reports that OCSI and OCSL in the future may file with the
Additional Information and Where to Find It
In connection with the Mergers, OCSI and OCSL plan to file with the
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requirements of Section 10 of the Securities Act of 1933, as amended.
STOCKHOLDERS OF OCSI AND OCSL ARE URGED TO READ THE JOINT PROXY STATEMENT AND
REGISTRATION STATEMENT, AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH
THE
Participants in the Solicitation
OCSI, its directors, certain of its executive officers and certain employees and
officers of
No Offer or Solicitation
This current report on Form 8-K is not, and under no circumstances is it to be
construed as, a prospectus or an advertisement and the communication of this
Current Report is not, and under no circumstances is it to be construed as, an
offer to sell or a solicitation of an offer to purchase any securities in OCSI,
OCSL or in any fund or other investment vehicle managed by
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits 2.1* Agreement and Plan of Merger among Oaktree Strategic Income Corporation,Oaktree Specialty Lending Corporation ,Lion Merger Sub, Inc. andOaktree Fund Advisors LLC (for the limited purposes set forth therein), dated as ofOctober 28, 2020 . 10.1 Incremental Commitment and Assumption Agreement, dated as ofOctober 28, 2020 , made byOaktree Specialty Lending Corporation , as Borrower, the assuming lender party hereto, as assuming lender, andING Capital LLC , as administrative agent and issuing bank relating to the Amended and Restated Senior Secured Revolving Credit Agreement, dated as ofFebruary 25, 2019 amongOaktree Specialty Lending Corporation , as Borrower, the lenders party thereto,ING Capital LLC , as administrative agent,ING Capital LLC ,JPMorgan Chase Bank, N.A . andMerrill Lynch, Pierce, Fenner & Smith Incorporated as joint lead arrangers and joint bookrunners, andJPMorgan Chase Bank, N.A . andBank of America, N.A ., as syndication agents. 99.1 Joint press release of Oaktree Strategic Income Corporation andOaktree Specialty Lending Corporation , dated as ofOctober 29, 2020 . 99.2 Joint investor presentation of Oaktree Strategic Income Corporation andOaktree Specialty Lending Corporation , dated as ofOctober 29, 2020 . * Exhibits and schedules to Exhibit 2.1 have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to theSEC upon its request.
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