Item 1.01 Entry into a Material Definitive Agreement.
On October 1, 2020 (the “Distribution Date”), PDL BioPharma, Inc. (“PDL” or the “Company”) completed the previously announced separation of LENSAR, Inc. (“LENSAR”) from the Company (the “Separation”) into a new, independent publicly traded company, through the distribution of all of the outstanding shares of LENSAR common stock, par value $0.01 per share, (the “LENSAR Common Stock”) held by the Company on a pro rata basis to the Company’s shareholders of record as of the close of business on September 22, 2020 (the “Record Date“). The Company’s stockholders received 0.075879 shares of LENSAR Common Stock for every one share of the Company’s common stock outstanding at 5:00 p.m. Eastern Time on September 22, 2020, the record date for the spin-off (the “Distribution”). Stockholders of PDL who have acquired shares of PDL common stock in the “regular way” market since shortly before the record date and through October 1, 2020 acquired such shares with an entitlement to receive shares of LENSAR common stock in connection with the Distribution. Stockholders of PDL who acquired their shares of PDL common stock ex-distribution during that time did so without an entitlement to receive shares of LENSAR common stock in connection with the Distribution. In lieu of fractional shares of LENSAR Common Stock, shareholders of the Company will receive cash. The Company distributed approximately 8,667,397 shares of common stock of LENSAR in the Distribution, which was effective at 5:00 p.m., Eastern Time, on October 1, 2020 (the “Effective Time”). As a result of the Distribution, LENSAR is now an independent public company and the LENSAR Common Stock is listed under the symbol “LNSR” on the Nasdaq Stock Market (“Nasdaq”).
In connection with the completion of the Spin-Off, the Company entered into several agreements with LENSAR, each dated September 30, 2020, that, among other things, provide a framework for the Company’s relationship with LENSAR after the Distribution, including the following (collectively, the “Spin Agreements”):
•Separation and Distribution Agreement;
•Transition Services Agreement; and
•Tax Matters Agreement.
The Separation Agreement provides for a full and complete release and discharge of all liabilities existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed at or before the completion of the Separation, between or among LENSAR or any of its affiliates, on the one hand, and the Company or any of its affiliates (other than LENSAR), on the other hand, except as expressly set forth in the Separation Agreement. The Separation Agreement contains cross-indemnification provisions principally designed to place financial responsibility for obligations and liabilities of LENSAR-related businesses with LENSAR and financial responsibility for obligations and liabilities of PDL-related businesses with the Company. LENSAR and the Company also agree, pursuant to the Separation Agreement, to provide each other with information relating to the other party or the conduct of its business prior to the separation, and information reasonably necessary to prepare financial statements and any reports or filings to be made with any governmental authority.
A summary of certain material terms of each of the Spin Agreements can be found in the section entitled “Certain Relationships and Related Person Transactions—Agreements between PDL and LENSAR Relating to the Spin-Off” in the Information Statement (the “Information Statement”) attached as Exhibit 99.1 to the Company’s Registration Statement on Form 10, initially filed with the Securities and Exchange Commission (the “SEC”) on August 26, 2020, as amended, and declared effective on September 17, 2020 (the “Registration Statement”), and is incorporated herein by reference. In addition, the descriptions of the foregoing agreements are qualified in their entirety by reference to the complete terms and conditions of such agreements filed as Exhibit 2.1, Exhibit 10.1 and Exhibit 10.2 hereto, and incorporated herein by reference.