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Item 1.01
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Entry Into a Material Definitive Agreement.
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On August 18, 2021, Incyte Corporation (the “Company”)
and its subsidiary, Incyte Holdings Corporation (“Incyte Holdings”), entered into a revolving credit and guaranty agreement
(the “Credit Agreement”) among the Company, as borrower, Incyte Holdings, as a guarantor, the lenders from time to time party
thereto (the “Lenders”), J.P. Morgan Chase Bank, N.A. as administrative agent, and the other financial institutions party
thereto. Under the Credit Agreement, the Lenders have committed to provide an unsecured three-year revolving credit facility in an aggregate
principal amount of up to $500.0 million. The Company may increase the maximum revolving commitments or add one or more incremental term
loan facilities to the Credit Agreement, subject to obtaining commitments from any participating lenders and certain other conditions,
in an amount not to exceed (1) $250.0 million plus (2) an additional amount, so long as after giving effect to the incurrence of such
additional amount, the Company’s pro forma consolidated leverage ratio would not exceed 0.25 above its consolidated leverage ratio
in effect immediately prior to giving effect to such increase. Subject to certain customary exceptions, in addition to Incyte Holdings,
the obligations under the Credit Agreement will be guaranteed by each of the Company’s existing and future, direct or indirect,
material domestic subsidiaries.
Loans under the Credit Agreement will bear interest,
at the Company’s option, at a per annum rate equal to either (a) a base rate plus an applicable rate per annum varying from 0.125%
to 0.875% depending on the Company’s consolidated leverage ratio or (b) a Eurodollar rate plus an applicable rate per annum varying
from 1.125% to 1.875% depending on the Company’s consolidated leverage ratio. Commitment fees payable on the undrawn amount range
from 0.150% per annum to 0.225% per annum, based on the Company’s consolidated leverage ratio.
The Company may, at its option, prepay any borrowings
under the Credit Agreement, in whole or in part, at any time and from time to time without premium or penalty, subject to customary exceptions.
The Credit Agreement contains customary representations,
warranties, affirmative covenants for facilities of this type, including, among others, covenants pertaining to the delivery of financial
statements, notices of default, maintenance of corporate existence, properties and insurance, and compliance with laws, as well as customary
negative covenants for facilities of this type, including, among others, covenants that restrict the: incurrence of liens by the Company
and its subsidiaries; incurrence of indebtedness by non-guarantor subsidiaries; ability of the Company and its subsidiaries to make certain
dispositions, or consummate mergers and certain other fundamental changes; and ability of the Company and its subsidiaries to pay dividends,
make distributions and other restricted payments with respect to their equity interests. The Credit Agreement also contains a financial
covenant requiring maintenance of a maximum consolidated leverage ratio of 3.50 to 1.00 (subject to certain exceptions with respect to
acquisitions in excess of an agreed threshold amount).
In addition, the Credit Agreement also contains
customary events of default, including with respect to a “change of control” (as defined in the Credit Agreement) of the Company.
During the occurrence and continuance of an event of default by the Company under the Credit Agreement, the Lenders would be entitled
to exercise their remedies thereunder, including termination of the commitment of each Lender to make loans (and, if any Lender is also
an issuer of letters of credit, termination of such issuer’s commitment to issue letters of credit), and the right to accelerate
any outstanding obligations under the Credit Agreement.
The foregoing description of
the Credit Agreement is a summary, does not purport to be complete, and is qualified in its entirety by reference to the full text of
the Credit Agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the three months
ended September 30, 2021.