ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
As previously disclosed, on November 1, 2018, Pacific Biosciences of California,
Inc. (the "Company") entered into an Agreement and Plan of Merger (as amended,
the "Merger Agreement") with Illumina, Inc. ("Illumina") and FC Ops Corp., a
wholly owned subsidiary of Illumina ("Merger Subsidiary"). On September 25,
2019, the Company, Illumina and Merger Subsidiary entered into Amendment No. 1
to the Merger Agreement to, among other things, extend the End Time (as defined
in the Merger Agreement) to December 31, 2019, subject to Illumina's unilateral
right to extend the End Time to March 31, 2020. On December 18, 2019, Illumina
elected to extend the End Time.
On January 2, 2020, the Company, Illumina and Merger Subsidiary entered into an
agreement to terminate the Merger Agreement (such agreement, the "Termination
Agreement"). Pursuant to the Termination Agreement, (1) the Merger Agreement was
terminated; (2) no later than January 6, 2020, Illumina will make a cash payment
to the Company of $98 million (which amount constitutes the Reverse Termination
Fee (as defined in the Merger Agreement)); and (3) Illumina will make, which it
would have been obligated to make under the Merger Agreement, cash payments to
the Company of $6 million on or before each of January 2, 2020, and March 2,
2020, and a cash payment to the Company of $22 million on or before February 3,
2020 (the payments contemplated by this clause (3), the "Continuation
Advances").
However, pursuant to the Termination Agreement, in the event that, on prior to
September 30, 2020, the Company enters into a definitive agreement providing
for, or consummates, a Change of Control Transaction (as defined in the
Termination Agreement), then the Company will repay the Reverse Termination Fee
(without interest) to Illumina in connection with the consummation of such
Change of Control Transaction. If such Change of Control Transaction is not
consummated by the two-year anniversary of the execution of the definitive
agreement for such Change of Control Transaction, then the Company will not be
required to repay the Reverse Termination Fee.
In addition, up to the full amount of the Continuation Advances actually paid to
the Company are repayable without interest to Illumina if, within two years of
March 31, 2020, the Company enters into a Change of Control Transaction or
raises at least $100 million in equity or debt financing in a single transaction
(with the amount repayable dependent on the amount raised by the Company).
The Company and Illumina mutually agreed to terminate the Merger Agreement as a
result of the lengthy regulatory approval process both in the United States and
United Kingdom, and uncertainties regarding the ultimate outcome of the
regulatory process.
The foregoing summary of the Termination Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the full text of
the Termination Agreement, which is attached as Exhibit 10.1 and incorporated by
reference.
ITEM 7.01. REGULATION FD DISCLOSURE.
On January 2, 2020, the Company and Illumina issued a joint press release (the
"Press Release") announcing entry into the Termination Agreement. A copy of the
Press Release is attached as Exhibit 99.1 and incorporated by reference.
In accordance with General Instruction B.2 of Form 8-K, the information set
forth in this Item 7.01, including Exhibit 99.1, is furnished pursuant to Item
7.01 and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to the liabilities under that section, nor shall such information be
deemed incorporated by reference in 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 a filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
10.1 Agreement by and among Pacific Biosciences of California, Inc.,
Illumina, Inc. and FC Ops Corp., dated January 2, 2020
99.1 Press Release, dated January 2, 2020
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PACIFIC BIOSCIENCES OF CALIFORNIA, INC. 
