prospect8k.htm
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
August
5, 2009
Date of
Report (Date of earliest event reported)
Prospect
Capital Corporation
(Exact
name of registrant as specified in its charter)
| Maryland |
333-114552 |
43-2048643 |
| (State or
other jurisdiction |
(Commission
File No.) |
(I.R.S.
Employer |
| of incorporation) |
|
Identification
No.) |
|
10
East 40th Street, 44th
Floor
|
|
New
York, NY 10016
|
(Address
of principal executive offices and zip code)
(Registrant's
telephone number, including area code) 212-448-0702
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):
x 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))
Item
1.01 Entry
into a Material Definitive Agreement.
On August 3, 2009, Prospect Capital
Corporation (“Prospect Capital”) and Patriot Capital Funding, Inc. (“Patriot”)
entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant
to which Patriot will merge with and into Prospect Capital, with Prospect
Capital continuing as the surviving company (the “Merger”).
Subject to the terms and conditions of
the Merger Agreement, which has been approved by the Board of Directors of both
companies, if the Merger is completed, each issued and outstanding share of
Patriot common stock will be converted into the right to receive 0.3992 shares
of Prospect Capital’s common stock, with such exchange ratio to give effect to
any tax distributions and any dividends that Patriot may declare before closing;
provided that any fractional shares will be paid in cash. In
addition, Prospect Capital will repay all outstanding amounts under Patriot’s
Second Amended and Restated Loan Funding and Servicing Agreement by and among
Patriot, Patriot Capital Funding LLC I and the Lenders specified therein, as
amended from time to time, which is anticipated to equal approximately
$110,500,000 at closing. Upon closing of the Merger, outstanding
Patriot stock options will be cancelled in exchange for the payment in cash to
the holder of these stock options of $0.01 per share of shares of Patriot’s
common stock for which these options are exercisable. Furthermore,
upon consummation of the Merger, each share of Patriot restricted stock then
outstanding will vest and be converted in the Merger into shares of Prospect
Capital common stock on the same terms as all other shares of Patriot common
stock.
The Merger Agreement, which is included
as Exhibit 2.1 to this current report on Form 8-K, contains (a) customary
representations and warranties of Prospect Capital and Patriot, including, among
others: corporate organization, capitalization, corporate authority, third party
and governmental consents and approvals, reports and regulatory matters,
financial statements, compliance with law and legal proceedings, absence of
certain changes and taxes, as well as additional representations by Prospect
Capital, including, a no financing condition; (b) covenants of Patriot to
conduct its business in the ordinary course until the Merger is completed; and
(c) covenants of Prospect Capital and Patriot not to take certain actions during
such interim period. Prospect Capital has agreed to indemnify the
officers and directors of Patriot in certain instances for claims brought
against them relating to (i) their service as an officer or director of Patriot
and (ii) the Merger, and to provide directors’ and officers’ liability insurance
for such officers and directors for a period of six years after the consummation
of the Merger. Patriot has also agreed to certain restrictions on its ability to
enter into negotiations regarding alternative business combination
transactions.
The representations and warranties of
each party set forth in the Merger Agreement have been made solely for the
benefit of the other party to the Merger Agreement. In addition, such
representations and warranties (a) have been qualified by confidential
disclosures made to the other party in connection with the Merger Agreement; (b)
will not survive consummation of the Merger and cannot be the basis for any
claims under the Merger Agreement by the other party after termination of the
Merger Agreement; (c) are subject to the materiality standard contained in
Section 9.2 of the Merger Agreement which may differ from what may be viewed as
material by investors; (d) were made only as of the date of the Merger Agreement
or such other date as is specified in the Merger Agreement; and (e) may have
been included in the Merger Agreement for the purpose of allocating risk between
Prospect Capital and Patriot rather than for establishing matters as
facts. Accordingly, the Merger Agreement is included with this filing
only to provide investors with information regarding the terms of the Merger
Agreement, and not to provide investors with any other factual information
regarding the parties or their respective businesses. The Merger
Agreement should not be read alone, but should instead be read in conjunction
with the other information regarding the companies and the Merger that will be
contained in the proxy statement/prospectus that the parties will be filing in
connection with the Merger, as well as in the Forms 10-K, Forms 10-Q and other
filings that each of Prospect Capital and Patriot make with the
SEC.
The Merger Agreement also contains
certain termination rights of Prospect Capital and Patriot, including but not
limited to, if the Merger has not been completed by December 15, 2009; if there
is a breach by the other party that is not or cannot be cured within 30 days’
notice of such breach if such breach would result in a failure of the conditions
to closing set forth in the Merger Agreement; if the Board of Directors of
Patriot fails to recommend the Merger to its stockholders; if Patriot breaches
its obligations in any material respect regarding any alternative business
combination proposals; or if the Patriot stockholders have voted to not approve
the Merger. The Merger Agreement provides that, in connection with
its termination under specified circumstances, Patriot may be required to pay
Prospect Capital a termination fee equal to $3,200,000.
The foregoing description of the Merger
and the Merger Agreement does not purport to be complete and is qualified in its
entirety by reference to the Merger Agreement, which is attached hereto as
Exhibit 2.1 and is incorporated into this current report on Form 8-K by
reference.
Additional Information About
this Transaction
In
connection with the proposed Merger, Prospect Capital will file with the SEC a
registration statement on Form N-14, which will include a proxy statement of
Patriot that also constitutes a prospectus of Prospect
Capital. Patriot will mail the proxy statement/prospectus to its
stockholders. Prospect Capital and Patriot urge investors and
stockholders to read the proxy statement/prospectus regarding the proposed
Merger when it becomes available because it will contain important
information.
You may
obtain copies of all documents filed with the SEC regarding this transaction,
free of charge, at the SEC’s website (www.sec.gov). Free copies of
these documents (when available) and other documents filed with the SEC can also
be obtained by directing a request to Prospect Capital Corporation, 10 East 40th
Street, 44th Floor, New York, NY 10016, Attention: Brian Oswald, Chief Financial
Officer.
Proxy
Solicitation
Prospect
Capital, Patriot and their respective directors, executive officers and certain
other members of management and employees and potentially a proxy solicitor may
be soliciting proxies from Patriot stockholders in favor of the
Merger. Information regarding the persons who may, under the rules of
the SEC, be considered participants in the solicitation of the Patriot
stockholders in connection with the proposed Merger will be set forth in the
proxy statement/prospectus when it is filed with the SEC. You can
find information about Prospect Capital’s executive officers and directors in
the prospectus supplement, dated June 30, 2009, to the prospectus dated June 26,
2009, filed with the SEC on July 1, 2009. You can find information
about Patriot’s executive officers and directors in its definitive proxy
statement filed with the SEC on April 28, 2009. You can obtain free copies of
these documents from Prospect Capital and Patriot in the manner set forth
above.
Forward-Looking
Statements
The
following factors, among others, could cause actual results to differ from those
set forth in the forward-looking statements: the failure of Patriot stockholders
to approve the transaction; the risk that the businesses will not be integrated
successfully; and disruption from the transaction making it more difficult to
maintain relationships with Patriot’s private equity
sponsors. Additional factors that may affect future results are
contained in Patriot’s and Prospect Capital’s filings with the SEC, which are
available at the SEC’s web site http://www.sec.gov. Patriot and
Prospect Capital disclaim any obligation to update and revise statements
contained in these materials based on new information or otherwise.
|
Item
9.01
|
Financial
Statements and Exhibits
|
|
(a)
|
Not
applicable. |
| |
|
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(b)
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Not
applicable. |
| |
|
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(c)
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Not
applicable. |
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|
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(d)
|
Exhibits. |
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|
| |
Exhibit
No. |
Description |
| |
|
|
| |
2.1 |
Agreement
and Plan of Merger by and between Patriot Capital Funding, Inc. and
Prospect Capital Corporation, dated as of August 3,
2009 |
| |
|
|
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99.1 |
Press release dated
August 3, 2009 |
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.
| August 5,
2009 |
Prospect Capital
Corporation |
| |
|
| |
|
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|
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By: /s/ John F. Barry
III
|
| |
Name: John F. Barry III |
| |
Title: Chief Executive
Officer |