ELAN Elanco Animal Health Incorporated

 

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): August 13, 2024

 

Elanco Animal Health Incorporated

(Exact name of registrant as specified in its charter)

 

Indiana		001-38661		82-5497352
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S Employer Identification No.)

 

2500 Innovation Way Greenfield, Indiana (Address of principal executive offices)

46140 (Zip Code)

 

Registrant’s telephone number, including area code: (877) 352-6261

 

Not Applicable

(Former Name or Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, no par value		ELAN		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

¨  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

Item 1.01

Entry into a Material Definitive Agreement.

 

On August 13, 2024, Elanco Animal Health Incorporated (the “Company”), Elanco US Inc. and certain subsidiaries of the Company entered into an incremental assumption agreement (the “Incremental Assumption Agreement”) with Farm Credit Mid-America, PCA, as incremental term lender, and Goldman Sachs Bank USA, as the term facility agent, supplementing and amending the Company’s existing credit agreement (the “Credit Agreement”) dated as of August 1, 2020 relating to its senior secured credit facility. The Incremental Assumption Agreement provides for a new incremental term facility under the Credit Agreement in an aggregate principal amount of $350,000,000, to be used to repay outstanding obligations under a certain term loan facility under the Credit Agreement and for general corporate purposes. The incremental term facility matures on August 13, 2031. The terms of the new incremental term facility, including the interest rate and repayment terms, are generally consistent with the terms of the Company’s existing term loan facility under the Credit Agreement.

 

The foregoing description of the Incremental Assumption Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Incremental Assumption Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.

 

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosure set forth under Item 1.01 above is incorporated by reference herein.

 

Item 9.01

Financial Statements and Exhibits.

             

 

(d)  Exhibits

 

Exhibit No.		Description
10.1		Incremental Assumption Agreement dated August 13, 2024 by and among Elanco Animal Health Incorporated, Elanco US Inc., the subsidiary loan parties party thereto, Farm Credit Mid-America, PCA, as incremental term lender, and Goldman Sachs Bank USA, as the term facility agent.
104.1		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Elanco Animal Health Incorporated
Date: August 13, 2024	By:	/s/ Todd Young
		Name:  Todd Young
		Title:  Executive Vice President and Chief Financial Officer

 

 

 

Exhibit 10.1

 

EXECUTION VERSION

 

INCREMENTAL ASSUMPTION AGREEMENT

 

THIS INCREMENTAL ASSUMPTION AGREEMENT (this “Agreement”) dated and effective as of August 13, 2024 (the “Effective Date”), is among ELANCO ANIMAL HEALTH INCORPORATED, an Indiana corporation (the “Company”), ELANCO US INC., a Delaware corporation (together with the Company, collectively, the “Borrowers” and each, individually, a “Borrower”), THE SUBSIDIARY LOAN PARTIES party hereto, FARM CREDIT MID-AMERICA, PCA (“ FCMA”) and each other person (if any) party hereto as a 2024 Incremental Term Lender (collectively, the “2024 Incremental Term Lenders” and each, individually, a “2024 Incremental Term Lender”) and GOLDMAN SACHS BANK USA (“Goldman Sachs”), as term facility agent (in such capacity, the “Term Loan Administrative Agent”).

 

Recitals:

 

A.            The Borrowers, the lenders party thereto, the Term Loan Administrative Agent, Goldman Sachs Bank USA, as collateral agent and security trustee, and JPMorgan Chase Bank, N.A., as revolving facility agent, have entered into that certain Credit Agreement dated as of August 1, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.

 

B.             Pursuant to Section 2.21 of the Credit Agreement, the Borrowers have requested an Incremental Term Facility in an aggregate principala amount of $350,000,000.

 

C.              Subject to the terms and conditions set forth below, each 2024 Incremental Term Lender is willing to provide commitments in respect of such Incremental Term Facility, and each of the Term Loan Administrative Agent and each 2024 Incremental Term Lender have agreed to amend and supplement the Credit Agreement as specifically set forth herein in connection therewith.

 

In furtherance of the foregoing, the parties hereto agree as follows:

 

Section 1.         2024 Incremental Term Facility.

 

(a)             2024 Incremental Term Loan Commitments. Subject to the terms and conditions set forth herein, each 2024 Incremental Term Lender agrees to make a single term loan denominated in Dollars (each such term loan, a “2024 Incremental Term Loan”) to the Borrowers on the Effective Date (as defined below) in a principal amount not to exceed the commitment of such 2024 Incremental Term Lender as set forth on Schedule 1 attached hereto (such commitment, with respect to each 2024 Incremental Term Lender, its “2024 Incremental Term Loan Commitment”). Amounts of 2024 Incremental Term Loans borrowed hereunder that are repaid or prepaid may not be reborrowed.

 

(b)            Availability/Borrowing. The borrowing of the 2024 Incremental Term Loans shall be funded in a single draw made on the Effective Date and shall be (i) subject to the satisfaction of each of the conditions set forth in Section 4.01 of the Credit Agreement and each of the conditions set forth in Section 4 below and (ii) made in accordance with Section 2.03 of the Credit Agreement.

 

(c)            Repayment of 2024 Incremental Term Loans. The Borrowers shall repay the 2024 Incremental Term Loans on the last day of each March, June, September and December of each year (commencing on December 31, 2024) and on August 13, 2031 (the “2024 Incremental Term Loan Maturity Date”) or, if any such date is not a Business Day, on the next preceding Business Day, in an aggregate principal amount of such 2024 Incremental Term Loans equal to (i) in the case of quarterly payments due prior to the 2024 Incremental Term Loan Maturity Date, $875,000 (which, for the avoidance of doubt, equals 0.25% of the aggregate principal amount of the 2024 Incremental Term Loans outstanding immediately after the Effective Date) and (ii) in the case of such payment due on the 2024 Incremental Term Loan Maturity Date, an amount equal to the then unpaid principal amount of such 2024 Incremental Term Loans outstanding.

 

 

(d)            Prepayment of 2024 Incremental Term Loans. The 2024 Incremental Term Loans shall be subject to the voluntary and mandatory prepayment provisions set forth in Sections 2.10 and 2.11 of the Credit Agreement and all prepayments thereof shall be made in accordance therewith (and, subject to the terms thereof, shall participate on a pro rata basis with the other Term Loans with respect to mandatory prepayments).

 

(e)            Interest. The 2024 Incremental Term Loans shall be ABR Term Loans or Term Benchmark Term Loans as provided in the Credit Agreement and subject to, and paid in accordance with, the provisions of the Credit Agreement in respect thereto (including, without limitation, Sections 2.13 through 2.17); provided, that in connection with the funding of the 2024 Incremental Term Loans, the Borrower may elect that the Interest Period applicable to the 2024 Incremental Term Loans match the Interest Period then in effect for the 2022 Incremental Term Loans. The Applicable Margin with respect to the 2024 Incremental Term Loans shall be, for any day, 1.75% per annum in the case of any Term Benchmark Term Loan and 0.75% per annum in the case of any ABR Term Loan.

 

(f)             Use of Proceeds. The proceeds of the 2024 Incremental Term Loan shall be used solely by the Borrowers to repay certain other Term Loans of the Borrowers outstanding under the Credit Agreement and for other general corporate purposes.

 

(g)             2024 Incremental Term Facility. Each of the parties hereto acknowledges and agrees that (i)   the 2024 Incremental Term Facility is an “Incremental Term Facility” established as a separate and distinct “Class” and “Facility” of “Other Term Loans” pursuant to Section 2.21 of the Credit Agreement, (ii)   the 2024 Incremental Term Loan Commitments are “Incremental Term Loan Commitments” under the Credit Agreement, (iii) the 2024 Incremental Term Loans are “Incremental Term Loans” under the Credit Agreement and, as a result thereof, are “Term Loans” and “Loans” under the Credit Agreement (including, without limitation, for purposes of the definition of “Loan Obligations” and “Required Prepayment Lenders”), (iv) the 2024 Incremental Term Loan Commitments, the 2024 Incremental Term Loans and all obligations in respect thereof are secured by the Security Documents, are guaranteed by the Subsidiary Guarantee Agreement and rank pari passu in right of payment and security with all of the other Obligations under the Credit Agreement, (v) except as otherwise expressly provided herein, are subject to the same terms as the other Term Loans under the Credit Agreement and (vi) this Agreement is an “Incremental Assumption Agreement” under the Credit Agreement and, as a result thereof, a “Loan Document” under the Credit Agreement. In addition, each of the parties hereto acknowledges and agrees that FCMA has acted as the sole lead arranger and sole bookrunner with respect to the 2024 Incremental Term Facility and, as a result thereof, from and after the Effective Date, FCMA shall be an “Arranger” under the Credit Agreement and entitled to the benefits that such designation provides under the Loan Documents (including, without limitation, for purposes of Sections 8.11, 9.05 and 9.21 of the Credit Agreement).

 

(h)           Waivers; Amendment. Pursuant to Section 9.08(e) of the Credit Agreement, each of the parties hereto acknowledges and agrees that, notwithstanding anything in the Credit Agreement (including, without limitation, Section 9.08) to the contrary, neither Section 2 below nor any provision of this Agreement or the Credit Agreement relating to the funding of the 2024 Incremental Term Loans may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers, the Term Loan Administrative Agent and each of the 2024 Incremental Term Lenders.

 

 

The amendments to the Credit Agreement are limited to the extent specifically set forth in this Section 1 and no other terms, covenants or provisions of the Loan Documents are intended to be affected hereby.

 

Section 2.         Certain Farm Credit Matters.

 

(a)           Waiver of Borrower’s Rights Under Farm Credit Law. Each Borrower acknowledges and agrees that, to the extent the provisions of the Agricultural Credit Act of 1987, including, without limitation, 12  U.S.C. §§ 2199 through 2202e, and the implementing Farm Credit Administration regulations, 12 C.F.R. § 617.7000, et seq. (collectively, the “Farm Credit Law”) apply to a Borrower or to the transactions contemplated by this Agreement, the Credit Agreement or the other Loan Documents, each Borrower hereby irrevocably waives, relinquishes and agrees not to assert at any time any and all rights that such Borrower may be afforded under the Farm Credit Law (“Borrower Rights”), including but not limited to all statutory or regulatory rights of a borrower to disclosure of effective interest rates, differential interest rates, review of credit decisions, distressed loan restructuring, and rights of first refusal. Each Borrower acknowledges and agrees that the waiver of Borrower Rights provided by this Section 2(a) is knowingly and voluntarily made after each Borrower has consulted with legal counsel of its choice and has been represented by counsel of its choice in connection with the negotiation of this Agreement and the waiver of Borrower Rights set forth in this Section 2(a). Each Borrower acknowledges that its waiver of Borrower Rights set forth in this Section 2(a) is based on its recognition that such waiver is material to induce the Agents and the Lenders to participate in the extensions of credit contemplated by this Agreement, the Credit Agreement and the other Loan Documents and to provide extensions of credit to the Borrowers. Nothing contained in this Section 2(a), nor the delivery to any Borrower of any summary of any rights under, or any notice pursuant to, the Farm Credit Law shall be deemed to be, or be construed to indicate the determination or agreement by any Borrower, any Agent or any Lender that the Farm Credit Law, or any rights thereunder, are or will be applicable to any Borrower or to the transactions contemplated by this Agreement, the Credit Agreement and the other Loan Documents. It is the intent of each Borrower that the waiver of Borrower Rights contained in this Section 2(a) complies with and meets all requirements of 12 C.F.R. § 617.7010(c).

 

(b)

Farm Credit Equity and Eligibility.

 

(i)          So long as a Farm Credit System Institution (as defined below) is a Lender under the Credit Agreement, each Borrower will acquire equity in such Farm Credit System Institution in such amounts and at such times as such Farm Credit System Institution may require in accordance with such Farm Credit System Institution’s Bylaws and Capital Plan (or their equivalent) (as each may be amended from time to time), except that the maximum amount of equity that such Borrower shall be required pursuant to this sentence to purchase in such Farm Credit System Institution in connection with the Loans made by such Farm Credit System Institution shall not exceed the maximum amount required by the Bylaws and the Capital Plan (or the equivalent) on the Effective Date (or such other date that such Farm Credit System Institution initially becomes a Lender, as applicable), and at all times maintain its eligibility to be a borrower of loans from a Farm Credit System Institution. Each Borrower acknowledges receipt of documents from each Farm Credit System Institution that describe the nature of such Borrower’s cash patronage, stock and other equities in such Farm Credit System Institution acquired in connection with its patronage loan from such Farm Credit System Institution (the “Farm Credit Equities”) as well as capitalization requirements, and agrees to be bound by the terms thereof. As used herein, “Farm Credit System Institution” means any farm credit bank, any federal land bank association, agricultural credit association, federal land credit association, any production credit association, the banks for cooperatives, and such other institutions as may be subject to regulation by the Farm Credit Administration, including, without limitation, any federally-chartered Farm Credit System lending institution organized under the Farm Credit Act of 1971, as the same may be amended or supplemented from time to time.

 

 

(ii)          Each party hereto acknowledges and agrees that each Farm Credit System Institution’s Bylaws and capital plans (or their equivalent) (as each may be amended from time to time) shall govern (A) the rights and obligations of the parties with respect to the Farm Credit Equities and any patronage refunds or other distributions made on account thereof or on account of any Borrower’s patronage with such Farm Credit System Institution, (B) any Borrower’s eligibility for patronage distributions from such Farm Credit System Institution (in the form of Farm Credit Equities and cash) and (C) patronage distributions, if any, in the event of a sale of a participation interest. Each Farm Credit System Institution reserves the right to assign or sell participations in all or any part of its Commitments or outstanding Loans hereunder on a non-patronage basis.

 

(iii)        Each party hereto further acknowledges and agrees that each Farm Credit System Institution has a statutory first lien pursuant to the Farm Credit Act of 1971, as the same may be amended or supplemented from time to time, on all Farm Credit Equities that any Borrower may now own or hereafter acquire, which statutory lien shall be for such Farm Credit System Institution’s sole and exclusive benefit. The Farm Credit Equities shall not constitute security for the Obligations due to any other party hereto. Neither the Farm Credit Equities nor any accrued patronage shall be offset against the Obligations except that, in the event of an Event of Default, a Farm Credit System Institution may elect, solely at its discretion, to apply the cash portion of any patronage distribution or retirement of equity to amounts owed to such Farm Credit System Institution under this Agreement, whether or not such amounts are currently due and payable. Each Borrower acknowledges that any corresponding tax liability associated with such application is the sole responsibility of such Borrower. No Farm Credit System Institution shall have any obligation to retire any Farm Credit Equities upon any Event of Default, Default or any other default by any Borrower or any other Loan Party, or at any other time, either for application to the Obligations or otherwise.

 

Section 3. Incremental Term Lender Joinder. By its execution of this Agreement, each 2024 Incremental Term Lender hereby acknowledges, agrees and confirms that, on and after the Effective Date:

 

(a)            it will be deemed to be a party to the Credit Agreement as a “Lender” and an “Incremental Term Lender” for all purposes of the Credit Agreement and the other Loan Documents, and shall have all of the obligations of, and shall be entitled to the benefits of, a Lender and an Incremental Term Lender under the Credit Agreement, all with the same force and effect as if it had executed the Credit Agreement;

 

(b)            it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.04 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and become a Lender and an Incremental Term Lender under the Credit Agreement;

 

(c)            it will independently and without reliance upon any Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement;

 

(d)            it appoints and authorizes the Term Loan Administrative Agent and Collateral Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement as are delegated to such Agent by the terms of the Credit Agreement, together with such powers as are reasonably incidental thereto; and

 

 

(e)             it will perform in accordance with their terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

Section 4. Conditions Precedent. The effectiveness of this Agreement and the amendments and other agreements contemplated hereby is subject to the satisfaction of each of the following conditions precedent:

 

(a)       Documentation. The Term Loan Administrative Agent and the 2024 Incremental Term Lenders shall have received each of the following (each in form and substance reasonably satisfactory to them):

 

(i)             this Agreement, duly executed and delivered by the Borrowers, the Subsidiary Loan Parties, the Term Loan Administrative Agent and the 2024 Incremental Term Lenders;

 

(ii)            to the extent requested by any 2024 Incremental Term Lender, a Note evidencing the 2024 Incremental Term Loans of such Incremental Term Lender, duly executed and delivered by the Borrowers;

 

(iii)            a certificate executed by a Responsible Officer of each Borrower dated as of the Effective Date and certifying as to the satisfaction of the conditions set forth in Section 4(e) and (f) below;

 

(iv)            a written opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, as special New York and Delaware counsel for the Loan Parties, and Faegre Drinker Biddle & Reath LLP, as special Indiana counsel for the Company and Elanco International, Inc., an Indiana corporation, (A)   dated the Effective Date, (B) addressed to each Issuing Bank, the Administrative Agents, the Collateral Agent and the Lenders on the Effective Date and (C) covering such matters relating to this Agreement and the other Loan Documents as the Term Loan Administrative Agent and the 2024 Incremental Term Lenders shall reasonably request;

 

(v)            a certificate of the Secretary, Assistant Secretary, Director or similar officer of each Loan Party (other than each Australian Loan Party) dated as of the Effective Date and certifying:

 

(A)          a copy of the memorandum, certificate or articles of incorporation, certificate of limited partnership, certificate of formation or other equivalent constituent and governing documents, including all amendments thereto, of such Loan Party, (1) in the case of a corporation, certified (to the extent available in any non-U.S. jurisdiction) as of a recent date by the Secretary of State (or other similar official or Governmental Authority in the case of any Loan Party organized outside the United States of America) of the jurisdiction of its organization, or (2) otherwise certified by the Secretary, Assistant Secretary, Director or similar officer of such Loan Party or other person duly authorized by the constituent documents of such Loan Party;

 

(B)          with the exception of any English Loan Party, German Loan Party or a Swiss Loan Party, a certificate as to the good standing (to the extent such concept or a similar concept exists under the laws of such jurisdiction) of such Loan Party as of a recent date from such Secretary of State (or other similar official or Governmental Authority in the case of any Loan Party organized outside the United States of America);

 

 

(C)          that attached thereto is a true and complete copy of the by-laws (or partnership agreement, limited liability company agreement, constitution or other equivalent constituent and governing documents) (to the extent such concept or a similar concept exists under the laws of such Loan Party’s jurisdiction of formation) of such Loan Party as in effect on the Effective Date and at all times since a date prior to the date of the resolutions described in clause (D) below;

 

(D)          that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors (or equivalent governing body) of such Loan Party (other than a German Loan Party unless required by law) (or its managing general partner or managing member), and, if required by law or customary in the jurisdiction of incorporation of such Loan Party (including, without limitation, England, Germany and Switzerland), the shareholders and other relevant corporate body, approving the 2024 Incremental Term Facility, authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to be executed by such Loan Party in connection with this Agreement and, in the case of the Borrowers, the borrowings under the 2024 Incremental Term Facility, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Effective Date;

 

(E)           as to the incumbency and specimen signature of each officer executing this Agreement or any other Loan Document or any other document delivered in connection herewith on behalf of such Loan Party;

 

(F)           that attached thereto is a true and complete copy of the companies register or commercial register, list of shareholders and the rules of procedure of any corporate body of such Loan Party (in each case, to the extent such concept or a similar concept exists under the laws of such Loan Party’s jurisdiction of formation and delivery of such document in a formalities certificate is customary in the relevant jurisdiction) of such Loan Party as in effect as at the Effective Date; and

 

(G)          except for any German Loan Party, confirming that, subject to the guarantee limitations set out in the Credit Agreement, borrowing or guaranteeing or securing (as appropriate) the Commitments (including the 2024 Incremental Term Loan Commitments) would not cause any borrowing, guarantee, security or other similar limit binding on it to be exceeded, subject to any limitations provided for in the Loan Documents;

 

(vi)            in respect of each Australian Loan Party, (x) ASIC company extracts and Australian PPS Register searches in relation to such Australian Loan Party and (y) a verification certificate dated as of the Effective Date and signed by a director of such Australian Loan Party, (A)     certifying the following items: (1) the constitution (or other equivalent constituent and governing documents) and certificate of registration of such Australian Loan Party last provided on April 19, 2022 remain correct, complete and in full force and effect and there have been no amendments as at the date of the verification certificate, (2) a copy of a true, complete and up-to-date extract board resolutions (or equivalent) approving the entry by such Australian Loan Party into this Agreement, (3) a copy of a true, complete and up-to-date shareholders’ resolutions (or equivalent) approving the resolutions referred to under (2) (if required), and (4) a true and complete specimen of signatures for each of the directors or authorized signatories of such Australian Loan Party authorized by the extract board resolutions (or equivalent) referred to above to execute this Agreement and otherwise be appointed for the purposes of this Agreement and other Loan Documents and (B) confirming that: (1) such Australian Loan Party is solvent and (2) such Australian Loan Party is not prevented by Chapter 2E and/or 2J.3 of the Australian Corporations Act from entering into this Agreement; and

 

 

(vii)           (A) with respect to each such Mortgaged Property located in the United States of America, the Flood Documentation as the Term Loan Administrative Agent or FCMA may reasonably request and (B) except to the extent permitted to be delivered pursuant to Section 5(b) below, such additional customary documents and filings (including amendments to the Mortgages and other Security Documents and title date-down and modification endorsements) as the Term Loan Administrative Agent may reasonably request to assure that the 2024 Incremental Term Loans are secured by the Collateral ratably with the then-existing Term Loans and Revolving Facility Loans.

 

(b)        Farm Credit Equities. The Borrowers shall have made at least the minimum equity investment in FCMA as required by Section 2(b) above.

 

(c)        Repayment. The Borrowers shall have made, or concurrently with the funding of the 2024 Incremental Term Loans on the date hereof shall make, principal prepayments with respect to the 2022 Incremental Term A-2 Loan (as defined in that certain Incremental Assumption Agreement (the “2022 Incremental Term A-2 Assumption Agreement”) dated as of June 28, 2022, among the Company, the other Borrowers party thereto, the Subsidiary Loan Parties party thereto, Bank of America, N.A., the 2022 Incremental Term A-2 Lenders (as defined in the 2022 Incremental Term A-2 Assumption Agreement) party thereto and the Term Loan Administrative Agent) in an amount equal to the then unpaid principal amount of such 2022 Incremental Term A-2 Loans outstanding.

 

(d)       Fees and Expenses. The Borrowers shall have paid (i) all fees due and payable on the Effective Date pursuant to that certain engagement letter (the “Engagement Letter”) dated as of May 29, 2024 between FCMA and the Borrowers, (ii) all expenses of FCMA required to be reimbursed in connection herewith pursuant to the Engagement Letter and (iii) all fees and expenses of the Term Loan Administrative Agent required to be reimbursed in connection herewith pursuant to the Credit Agreement.

 

(e)       Representations and Warranties. The representations and warranties set forth in the Loan Documents shall be true and correct in all material respects as of the date hereof (except to the extent such representations and warranties are qualified by “materiality” or “Material Adverse Effect,” in which case such representations and warranties shall be true and correct in all respects as of the date hereof), in each case, with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date (except to the extent such representations and warranties are qualified by “materiality” or “Material Adverse Effect,” in which case such representations and warranties shall be true and correct in all respects as of such earlier date)).

 

(f)        No Default or Event of Default. No Event of Default or Default shall have occurred and be continuing, nor will an Event of Default or Default occur as a result of this Agreement or the incurrence of the Indebtedness contemplated hereby.

 

(g)      KYC, USA PATRIOT Act, Etc. The Term Loan Administrative Agent and the 2024 Incremental Term Lenders shall have received all documentation and other information required by Section 3.25 of the Credit Agreement no later than three (3) business days in advance of the Effective Date, to the extent such information has been requested not less than ten (10) days prior to the Effective Date. Upon the reasonable request of any 2024 Incremental Term Lender made at least ten (10) days prior to the Effective Date, the Borrowers shall have provided to such 2024 Incremental Term Lender the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the USA PATRIOT Act, Beneficial Ownership Certification and the Canada PCTFA, in each case at least three (3) business days prior to the Effective Date (including, without limitation, a Beneficial Ownership Certification for any Borrower that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation).

 

 

Section 5. Post-Closing Obligations. Each relevant Loan Party shall deliver, or cause to be delivered, to the Term Loan Administrative Agent and FCMA, each in form and substance reasonably satisfactory to them:

 

(a)           as soon as reasonably practicable, but in no event later than thirty (30) days after the Effective Date (or such longer period as agreed to by the Term Loan Administrative Agent and FCMA):

 

(i)            junior ranking share pledge agreement(s) governed by German law over all the shares in Lohmann Animal Health GmbH, Elanco Animal Health GmbH, Elanco Deutschland GmbH and KVP Pharma+Veterinär Produkte GmbH;

 

(ii)           junior ranking account pledge agreement governed by German law over bank accounts by Elanco GmbH, Elanco Deutschland GmbH, Lohmann Animal Health GmbH, Elanco Animal Health GmbH and KVP Pharma+Veterinär Produkte GmbH as pledgors;

 

(iii)          junior ranking intellectual property pledge agreement governed by German law over intellectual property by Lohmann Animal Health GmbH and Elanco Animal Health GmbH as pledgors;

 

(iv)         security confirmation agreement(s) governed by German law in relation to the existing global assignment agreement by Elanco GmbH, Elanco Deutschland GmbH, Lohmann Animal Health GmbH, Elanco Animal Health GmbH and KVP Pharma+Veterinär Produkte GmbH as assignors, the existing security transfer agreement by Lohmann Animal Health GmbH, Elanco Animal Health GmbH and KVP Pharma+Veterinär Produkte GmbH as transferors and the existing security purpose agreement in relation to land charges by Lohmann Animal Health GmbH and KVP Pharma+Veterinär Produkte GmbH as chargors, each dated December 21, 2020;

 

(v)         a security confirmation agreement governed by Swiss law to be entered into between Elanco International, Inc., Elanco Tiergesundheit AG, Elanco Financing SA and Elanco Europe GmbH as Security Providers, and Goldman Sachs Bank USA as Collateral Agent, in respect of security confirmation of, inter alia, the security interests granted under the existing Swiss Security Documents; and

 

(vi)         customary legal opinions from Homburger AG, legal advisor to the Loan Parties, and from Walder Wyss AG, legal advisor to the Term Loan Administrative Agent and the other Lenders, in each case, as to Swiss law, addressed to each Issuing Bank, the Administrative Agents, the Collateral Agent and the Lenders and covering capacity and enforceability matters, respectively, which shall be in form and substance reasonably satisfactory to the Term Loan Administrative Agent and FCMA; and

 

(b)            as soon as reasonably practicable, but in no event later than ninety (90) days after the Effective Date (or such longer period as agreed to by the Term Loan Administrative Agent and FCMA), such amendments to the Mortgages and title date-down and modification endorsements as the Term Loan Administrative Agent and FCMA may reasonably request to assure that the 2024 Incremental Term Loans are secured by the Collateral ratably with the then-existing Term Loans and Revolving Facility Loans.

 

 

Section 6. Representations and Warranties. In order to induce the Term Loan Administrative Agent and the 2024 Incremental Term Lenders to enter into this Agreement, each Loan Party represents and warrants to the Term Loan Administrative Agent and each 2024 Incremental Term Lender as follows:

 

(a)            The representations and warranties set forth in the Loan Documents are true and correct in all material respects as of the date hereof (except to the extent such representations and warranties are qualified by “materiality” or “Material Adverse Effect,” in which case such representations and warranties are true and correct in all respects as of the date hereof), in each case, with the same effect as though made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties are true and correct in all material respects as of such earlier date (except to the extent such representations and warranties are qualified by “materiality” or “Material Adverse Effect,” in which case such representations and warranties are true and correct in all respects as of such earlier date)).

 

(b)            No Event of Default or Default has occurred and is continuing, nor will an Event of Default or Default occur as a result of this Agreement or the incurrence of the Indebtedness contemplated hereby.

 

(c)            This Agreement has been duly authorized, executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party, in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, arrangement, reorganization, fraudulent conveyance or other similar laws affecting creditors’ rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.

 

Section 7.       Miscellaneous.

 

(a)            Ratification and Confirmation of Loan Documents. Each Loan Party hereby consents, acknowledges and agrees to the amendments and other agreements set forth herein and hereby confirms and ratifies in all respects the Loan Documents to which such Loan Party is a party (including, without limitation, the continuation of such Loan Party’s payment and performance obligations thereunder and the continuation and extension of the liens and security interests granted by such Loan Party thereunder), in each case after giving effect to the amendments and other agreements contemplated hereby. Other than as expressly provided for in this Agreement, the rights and obligations under the Credit Agreement and each other Loan Document are not affected by the execution of this Agreement and the transactions contemplated by this Agreement and the Credit Agreement and each other Loan Document to which any Loan Party is a party prior to the Effective Date continues in full force and effect and continues to secure all amounts owing to any Lender, despite the execution of this Agreement or any other document, the transactions contemplated by this Agreement and/or any other document. Nothing in this Agreement (i) affects the validity or enforceability of any Loan Document; (ii) prejudices or adversely affects any right, power, authority, discretion or remedy arising under the Loan Documents other than as expressly stated by the terms of this Agreement; and/or (iii) discharges, releases or otherwise affects any liability or obligation arising under any Loan Document other than as expressly stated by this Agreement.

 

(b)            Fees and Expenses. Without limiting the generality of Section 4(d) above or the Engagement Letter, the Borrowers shall pay all reasonable out-of-pocket costs and expenses of the Term Loan Administrative Agent and FCMA in connection with the preparation, negotiation, execution, and delivery of this Agreement and any other documents prepared in connection herewith, including, without limitation, reasonable legal fees and expenses.

 

 

(c)            Headings. Section and subsection headings in this Agreement are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

 

(d)            Governing Law; Jurisdiction; Consent to Jurisdiction. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY PRINCIPLE OF CONFLICTS OF LAW THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW. Section 9.15 of the Credit Agreement is hereby incorporated by reference with respect to each Loan Party as if set forth fully herein, mutatis mutandis.

 

(e)           WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6(e).

 

(f)             Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which, when taken together, shall constitute but one contract, and shall become effective as provided in Section 4. Delivery of an executed signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart hereof. Any signature to this Agreement may be delivered by facsimile, electronic mail (including pdf) or any electronic signature complying with the U.S. federal ESIGN Act of 2000 or the New York Electronic Signature and Records Act or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes to the fullest extent permitted by applicable law. Each of the parties executing this Agreement through electronic means represents and warrants to the other parties that it has the corporate capacity and authority to execute this Agreement through electronic means and there are no restrictions for doing so in that party’s constitutive documents.

 

(g)            Entire Agreement. This Agreement, the other Loan Documents and the Engagement Letter, constitute the entire contract between the parties relative to the subject matter hereof. Any previous agreement among or representations from the parties or their Affiliates with respect to the subject matter hereof is superseded by this Agreement and the other Loan Documents. Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.

 

(h)            Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

 

(i)             Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party and all covenants, promises and agreements by or on behalf of any party hereto that are contained in this Agreement shall bind and inure to the benefit of their respective permitted successors and assigns.

 

(j)             Direction to Execute. Each 2024 Incremental Term Loan Lender authorizes and directs Goldman Sachs, as Term Loan Administrative Agent, to execute this Agreement.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

 

The following parties have caused this Agreement to be executed as of the date first written above.

 

	BORROWERS:
	ELANCO ANIMAL HEALTH INCORPORATED
	By:	/s/ Beth Haney
	Name:	Beth Haney
	Title:	Assistant Treasurer
	ELANCO US INC.
	By:	/s/ Beth Haney
	Name:	Beth Haney
	Title:	Assistant Treasurer
	SUBSIDIARY LOAN PARTIES:
	ELANCO international, inc.
	By:	/s/ Beth Haney
	Name:	Beth Haney
	Title:	Treasurer
	ELANCO MISSOURI INC.
	By:	/s/ Rajeev A. Modi
	Name:	Rajeev A. Modi
	Title:	Director
	LOHMANN ANIMAL HEALTH INTERNATIONAL, INC.
	By:	/s/ Jose Manuel Correia De Simas
	Name:	Jose Manuel Correia De Simas
	Title:	Director

 

INCREMENTAL ASSUMPTION AGREEMENT

Signature Page

 

 

	ELANCO CANADA LIMITED
	By:	/s/ Wa (Brianna) Niu
	Name:	Wa (Brianna) Niu
	Title:	CFO - Canada

 

INCREMENTAL ASSUMPTION AGREEMENT

Signature Page

 

 

ELANCO DEUTSCHLAND GMBH

 

	By:	/s/ Dr. Inga Drosse
	Name:	Dr. Inga Drosse
	Title:	GENERAL MANAGER DACH / Managing Director

 

ELANCO GMBH

 

	By:	/s/ Stefan Gebauer
	Name:	Stefan Gebauer
	Title:	Managing Director

 

LOHMANN ANIMAL HEALTH GMBH

 

	By:	/s/ Stefan Gehlhaar
	Name:	Stefan Gehlhaar
	Title:	Director Production

 

	ELANCO ANIMAL HEALTH GMBH
	By:	/s/ DR. KLAUS WENING
	Name:	DR. KLAUS WENING
	Title:	EXECUTIVE DIRECTOR / Authorised Signatory

 

	KVP PHARMA+VETERINÄR PRODUKTE GMBH
	By:	/s/ Dr. Frank Küpker
	Name:	Dr. Frank Küpker
	Title:	Managing Director

 

INCREMENTAL ASSUMPTION AGREEMENT

Signature Page

 

 

	ELANCO EUROPE GMBH
	By:	/s/ Stefan Alexander Gebauer
	Name:	Stefan Alexander Gebauer
	Title:	Managing Officer

 

	ELANCO TIERGESUNDHEIT AG
	By:	/s/ Stefan Alexander Gebauer
	Name:	Stefan Alexander Gebauer
	Title:	Member of the Board of Directors

 

	ELANCO FINANCING SA
	By:	/s/ Stefan Alexander Gebauer
	Name:	Stefan Alexander Gebauer
	Title:	Member of the Board of Directors

 

INCREMENTAL ASSUMPTION AGREEMENT

Signature Page

 

 

	ELANCO UK AH LIMITED
	By:	/s/ Christopher Lewis
	Name:	Christopher Lewis
	Title:	CFO & Director

 

INCREMENTAL ASSUMPTION AGREEMENT

Signature Page

 

 

Executed by Elanco Australia Holding Pty Limited in accordance with section 127 of the Corporations Act 2001 (Cth) by:
/s/ Gert Hendrik Van Der Walt		/s/ Ahmad Zoabi
Signature of director   Gert Hendrik Van Der Walt		Signature of director/secretary   Ahmad Zoabi
Name of director (print)		Name of director/secretary (print)

 

Executed by Elanco Australasia Pty Ltd in accordance with section 127 of the Corporations Act 2001 (Cth) by:
/s/ Gert Hendrik Van Der Walt		/s/ Ahmad Zoabi
Signature of director   Gert Hendrik Van Der Walt		Signature of director/secretary   Ahmad Zoabi
Name of director (print)		Name of director/secretary (print)

 

INCREMENTAL ASSUMPTION AGREEMENT 

Signature Page

 

 

	GOLDMAN SACHS BANK USA,
	as Term Loan Administrative Agent
	By:	/s/ Luke Qiu
	Name:	Luke Qiu
	Title:	Authorized Signatory

 

INCREMENTAL ASSUMPTION AGREEMENT

Signature Page

 

 

	FARM CREDIT MID-AMERICA PCA, as a 2024
	Incremental Term Lender
	By:	/s/ Rollin Richey
	Name:	Rollin Richey
	Title:	Sr. Credit Officer, Food & Agribusiness

 

INCREMENTAL ASSUMPTION AGREEMENT

Signature Page

 

 

SCHEDULE 1

 

2024 Incremental Term Loan Commitments

 

2022 Incremental Term Lender		2022 Incremental Term Loan Commitment
Farm Credit Mid-America, PCA		$	350,000,000.00
Total		$	350,000,000.00

 

v3.24.2.u1

Cover	Aug. 13, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 13, 2024
Entity File Number	001-38661
Entity Registrant Name	Elanco Animal Health Incorporated
Entity Central Index Key	0001739104
Entity Tax Identification Number	82-5497352
Entity Incorporation, State or Country Code	IN
Entity Address, Address Line One	2500 Innovation Way
Entity Address, City or Town	Greenfield
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46140
City Area Code	877
Local Phone Number	352-6261
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common stock, no par value
Trading Symbol	ELAN
Security Exchange Name	NYSE

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