Document:

Exhibit

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

This Amendment No. 1 to Agreement and Plan of Merger, dated as of September 25, 2019, is among Pacific Biosciences of California, Inc., a Delaware corporation (the “Company”), Illumina, Inc., a Delaware corporation (“Parent”), and FC Ops Corp., a Delaware corporation and a wholly owned Subsidiary of Parent (“Merger Subsidiary”). Each of the Company, Parent and Merger Subsidiary are sometimes referred to as a “Party.” Capitalized terms used in this Amendment and not otherwise defined have the meaning given to them in the Merger Agreement (as defined below).

RECITALS
A.    The Company, Parent and Merger Subsidiary previously entered into the Agreement and Plan of Merger, dated as of November 1, 2018 (the “Merger Agreement”).

B.    The Company, Parent and Merger Subsidiary wish to amend certain provisions of the Merger Agreement as set forth in this Amendment.

C.    The Board of Directors and the respective boards of directors of each of Parent and Merger Subsidiary have approved the execution and delivery of this Amendment on behalf of the applicable Party.

D.    The Parties are prepared to close the Merger contemplated by the Merger Agreement upon receipt of required antitrust approvals in the United States and the United Kingdom. The Parties are entering into this Amendment so as to provide additional time to obtain such approvals and thereby satisfy the conditions to closing the Merger set forth in the Merger Agreement.
AGREEMENT
The Parties therefore agree as follows:

1.     Amendments to the Merger Agreement.

(a)Section 10.01(b)(i) of the Merger Agreement is amended and restated in its entirety to read as follows:

the Effective Time shall not have occurred on or before December 31, 2019 (the “End Time”); provided that the right to terminate this Agreement pursuant to this Section 10.01(b)(i) shall not be available to any party whose breach of any representation, warranty, covenant, agreement or provision of this Agreement has resulted in the failure of the Effective Time to occur by the End Time; provided further, that Parent shall have the right to unilaterally extend the End Time to March 31, 2020, by delivering a written notice of such extension to the Company on or before December 18, 2019; or

(b)    A new Section 10.03 is added as follows:

SECTION 10.03. Funding of Continued Operations. Parent will make a cash payment to the Company of $6 million on or before each of October 1, 2019, November 1, 2019, and December 2, 2019. If Parent extends the End Time in accordance with Section 10.01(b)(i), then it will make a cash payment to the Company of $6 million on or before each of January 2, 2020, and March 2, 2020, and cash payment to the Company of $22 million on or before February 3, 2020. Each payment made by Parent pursuant to this Section 10.03 is 

referred to as a “Continuation Advance” and will be made by wire transfer of immediately available funds to an account or accounts designated by the Company. Prior to the earlier of (a) the occurrence of the Effective Time or (b) the termination of this Agreement pursuant to Section 10.01, the Company will use the Continuation Advances for general working capital purposes, including the repayment of debt. The Continuation Advances will be repayable without interest by the Company solely in the event that, within two years following the termination of this Agreement, the Company enters into a definitive agreement providing for, or consummates, (x) a transaction described under clause (ii) or (iii) of the definition of Acquisition Proposal (with all percentages in the definition of Acquisition Proposal deemed to refer to 50%) had this Agreement still been in effect (a “Change of Control Transaction”) or (y) a single equity or debt financing (that may have multiple closings) with proceeds received by the Company of no less than $100 million (a “Qualifying Financing” and, together with a Change of Control Transaction, a “Repayment Transaction”). Any repayment by the Company will occur in connection with, and be conditioned on, the consummation of the applicable Repayment Transaction. The amount repayable in connection with a Qualifying Financing will be calculated based on an increasing sliding scale (from 50% to 100%) of the Continuation Advances actually paid to the Company relative to the proceeds received by the Company in a Qualifying Financing between $100 million and $200 million, inclusive, with (A) 50% of the aggregate amount of Continuation Advances actually paid to the Company being repayable where the proceeds received by the Company in a Qualifying Financing are equal to $100 million and (B) 100% of the aggregate amount of Continuation Advances actually paid to the Company being repayable where the proceeds received by the Company in a Qualifying Financing are equal to or exceed $200 million. For illustrative purposes only, if the proceeds received by the Company in a Qualifying Financing are equal to $150 million, then 75% of the aggregate amount of Continuation Advances actually paid to the Company shall be repayable. In a Change of Control Transaction, 100% of the aggregate amount of Continuation Advances actually paid to the Company shall be repayable. Other than as provided in this Section 10.03, the Parent Related Parties will have no right to recover any Continuation Advance, including by offset of any Continuation Advance against the Reverse Termination Fee. Parent and Merger Subsidiary acknowledge that the Continuation Advances, and the circumstances at the Company giving rise to the Company’s need for the Continuation Advances, will not (A) be deemed to constitute an event, circumstance, change, occurrence, development, condition or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; or (B) prevent in any way the satisfaction of the conditions contained in Article 9.

(c)    Section 11.04(e) of the Merger Agreement is amended and restated in its entirety to read as follows:

Notwithstanding anything to the contrary in this Agreement, the parties expressly acknowledge and agree that that in no event shall Parent be required to both (x) pay the Reverse Termination Fee and (y) take the Specified Termination Actions and, in the case of either (x) or (y), do so on more than one occasion. If the Company receives the Reverse Termination Fee from Parent under circumstances where the Reverse Termination Fee is payable pursuant to the terms of this Agreement or Parent takes the Specified Termination Actions under circumstances where the Specified Termination Actions are to be taken pursuant to the terms of this Agreement (in each case, together with any payments required 

under Section 11.04(c)), then such payment or such actions, as applicable, shall constitute liquidated damages and shall constitute the sole and exclusive monetary remedy of the Company Related Parties against the Parent Related Parties for all losses, damages, costs or expenses in respect of this Agreement (or the termination thereof) or the transactions contemplated by this Agreement (or the failure of such transactions to occur for any reason or for no reason) or any breach (whether willful, intentional, unilateral or otherwise) of any covenant or agreement or otherwise in respect of this Agreement or any oral representation made or alleged to be made in connection herewith, and upon payment of the Reverse Termination Fee to the Company pursuant to Section 11.04(b)(iii) or Parent’s taking of the Specified Termination Actions pursuant to Section 11.04(b)(iv) (in each case, together with any payments required under Section 11.04(c)), none of the Parent Related Parties shall have any further monetary liability or obligation to any of the Company Related Parties relating to or arising out of this Agreement or the transactions contemplated hereby or thereby, and none of the Company, its Subsidiaries or any other Company Related Party shall seek to recover any other monetary damages or be obligated to repay the Continuation Advances (except as provided in Section 10.03); provided that, notwithstanding the foregoing, the parties will remain obligated with respect to Section 10.03 and Section 11.04(a). In a situation where both the Reverse Termination Fee would be payable pursuant to Section 11.04(b)(iii) and Parent would be required to take the Specified Termination Actions pursuant to Section 11.04(b)(iv), only the Reverse Termination Fee will be payable and Parent shall have no obligation with respect to Section 11.04(b)(iv) or the Specified Termination Actions.

2.     Agreement References. All references to the “Agreement” in the Merger Agreement will be deemed to be references to the Merger Agreement as amended by this Amendment.

3.     Headings. The headings set forth in this Amendment are for convenience of reference purposes only and will not affect or be deemed to affect in any way the meaning or interpretation of this Amendment or any of its terms or provisions.

4.     Confirmation of the Merger Agreement. Other than as expressly modified by this Amendment, all provisions of the Merger Agreement remain unmodified and in full force and effect.

5.     Miscellaneous Provisions. The provisions of Article 11 of the Merger Agreement apply to this Amendment as if fully set forth in this Amendment with the necessary changes made.

[Signature page follows.]

The Parties are signing this Agreement on the date stated in the introductory clause.
	
					
	 
	 
	 
	 
	 

	 
	 
	PACIFIC BIOSCIENCES OF CALIFORNIA, INC.

	 
	 
	By:  
	/s/ Michael W. Hunkapiller

	 
	 
	Name: 
	Michael W. Hunkapiller

	 
	 
	Title:
	CEO & Chairman

	
					
	 
	 
	 
	 
	 

	 
	 
	ILLUMINA, INC.

	 
	 
	By:  
	/s/ Sam A. Samad

	 
	 
	Name: 
	Sam A. Samad

	 
	 
	Title:
	Senior Vice President & Chief Financial

	
					
	 
	 
	 
	 
	 

	 
	 
	FC OPS CORP.

	 
	 
	By:  
	/s/ Sam A. Samad

	 
	 
	Name: 
	Sam A. Samad

	 
	 
	Title:
	Senior Vice President 

[Signature Page to Amendment No. 1 to Agreement and Plan of Merger]awsm-ex41_6.htm

 

Exhibit 4.1

THIS NOTE AND THE SECURITIES INTO WHICH THIS NOTE MAY BE CONVERTED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE OR SOLD, ASSIGNED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS WRITTEN EVIDENCE REASONABLY SATISFACTORY TO THE BORROWER IS SUPPLIED TO THE BORROWER TO THE EFFECT THAT THE PROPOSED OFFER, SALE, ASSIGNMENT OR OTHER TRANSFER MAY BE EFFECTED WITHOUT SUCH REGISTRATION.

unSECURED CONVERTIBLE note

$[        ]September [   ], 2019

FOR VALUE RECEIVED, COOL HOLDINGS, INC., a Maryland corporation (the “Borrower”), hereby promises to pay [            ] (the “Holder”), the principal sum of [              ] and No/100 Dollars ($[         ]), together with simple interest thereon.  Interest shall accrue at a rate of twelve percent (12%) per annum commencing on the date hereof, and shall be calculated based on a 360-day year of twelve 30-day months.  Unless earlier converted into shares of Equity Securities (as defined below) pursuant to the terms of this Note or paid in full in accordance with the terms hereof, (a) accrued interest shall be payable to the Holder quarterly in arrears commencing on the date that the Borrower obtains any shareholder or other required regulatory approval (the “Approval Date”) to permit the conversion of this note, in stock of the Borrower, and (b) the outstanding principal amount and any unpaid accrued interest shall be due and payable by Borrower on demand by the Holder at any time after the earlier of: (i) the date 12 months following the original issuance date of this Note (“Maturity Date”) and (ii) an Event of Default (as defined below).  

1.Payment.  Except in connection with the conversion of principal and unpaid accrued interest hereunder into the common stock of the Borrower (the “Equity Securities”)  as provided for herein, (i) all payments shall be made in lawful money of the United States of America at the principal office of the Borrower, or at such other place as the holder hereof may from time to time designate in writing to the Borrower; and (ii) payment shall be credited first to accrued interest due and payable and the remainder applied to principal.    

2.Unsecured Obligation.  This Note is an unsecured obligation of the Borrower. 

3.Use of Proceeds.  The Borrower agrees to use the principal sum hereunder only in connection with the Borrower’s acquisition of Simply Mac, Inc. from GameStop Corp.

4.Conversion of the Note.  This Note shall be convertible according to the following terms:

(a)The principal and unpaid accrued interest of this Note will be automatically converted into Equity Securities on the Approval Date.  The number of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest due on this Note on the date of conversion, by the Conversion Price. “Conversion Price” shall mean the amount which is 30% below the twenty-day volume weighted average price immediately prior to the Approval Date.

(b)Upon the conversion of this Note into Equity Securities, in lieu of any fractional shares to which the Holder of this Note would otherwise be entitled, the Borrower shall pay the Holder cash equal to such fraction multiplied by the issue price of such Equity Securities.  

(c)Upon the conversion of this Note, the Holder shall surrender this Note, duly endorsed, at the principal office of the Borrower.  As soon as practicable thereafter, the Borrower will issue in the name of and deliver to the Holder, a certificate or certificates for the number of shares of the Equity Securities to which the Holder shall be entitled on such conversion.  Such conversion shall be deemed to have been made immediately prior to the close of business on the date of conversion. 

 

 

5.Events of Defaults and Remedies.  The following events shall be considered Events of Default with respect to this Note: (a) the Borrower shall default in the payment of any part of the principal or unpaid accrued interest on this Note when due; (b) the Borrower or any of its subsidiaries shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts as they become due, or shall file a voluntary petition for bankruptcy, or shall file any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, dissolution or similar relief under any present or future statute, law or regulation, or shall file any answer admitting the material allegations of a petition filed against the Borrower or any subsidiary in any such proceeding, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver or liquidator of the Borrower or any subsidiary, or of all or any substantial part of the properties of the Borrower or any subsidiary, or the Borrower or any subsidiary or any of their respective directors or majority stockholders shall take any action looking to the dissolution or liquidation of the Borrower or any subsidiary; (c) within thirty (30) days after the commencement of any proceeding against the Borrower or any subsidiary seeking any bankruptcy reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceeding shall not have been dismissed, or within thirty (30) days after the appointment without the consent or acquiescence of the Borrower or any subsidiary of any trustee, receiver or liquidator of the Borrower or any subsidiary or of all or any substantial part of the properties of the Borrower or any subsidiary, such appointment shall not have been vacated; (d) any material representation or warranty made by the Borrower or any subsidiary in this Note or any agreement or instrument provided to the Holder  in accordance with the specific terms and conditions of this Note shall prove to have been incorrect when made in any material respect; (e) the Borrower or any subsidiary fails to perform or observe any covenant contained in this Note where the failure to do so could reasonably be expected to have a material adverse effect on the business, assets or financial condition of the Borrower; (f) any material judgment, writ, warrant of attachment or execution or similar process shall be issued or levied against a material part of the property of the Borrower and such judgment, writ, warrant of attachment or execution or similar process shall not be released, vacated or fully bonded within sixty (60) days after its issue or levy; or (g) this Note is deemed to be unenforceable.  Upon the occurrence of an Event of Default under Section 4 hereof, at the option and upon the declaration of the Holder of this Note, the entire unpaid principal and accrued and unpaid interest on this Note shall, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, and such holder may, immediately and without expiration of any period of grace, enforce payment of all amounts due and owing under this Note and exercise any and all other remedies granted to it at law, in equity or otherwise. The Borrower shall promptly notify the Holder of the occurrence of any Event of Default.

6.Miscellaneous.

(a)Successors and Assigns.  Except as otherwise provided herein, the terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  Nothing in this Note, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Note, except as expressly provided in this Note.  This Note shall be transferable and assignable by the Holder at any time subsequent to the date hereof subject to the requirement (i) that any transferee or assignee of this Note must first agree in writing, in a form acceptable to the Borrower, to be bound by the terms of this Note, (ii) that any such assignment or transfer be, in the reasonable opinion of the Borrower’s counsel, in full compliance with applicable state and federal securities laws.

(b)Governing Law.  This Note shall be governed by and construed under the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. Any claims or legal actions arising hereunder shall be commenced and maintained in any state or federal court of competent jurisdiction located in the State of New York, and the Holder consents and submits to the exclusive jurisdiction and venue of any such court.

(c)Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of this Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 (Signature Page Follows)

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IN WITNESS WHEREOF, the Borrower has caused this Unsecured Convertible Note to be signed in its name and executed as of the date first above written.

COOL HOLDINGS, INC.

 

 

By:  ______________________________

Name:  Vernon A. LoForti

Title:  Senior VP & CFO

 

ACKNOWLEDGED AND AGREED:

HOLDER:

[                     ]

Signature:  

Name:  

Title:  

 

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