Item 1.01 Entry into a Material Definitive Agreement.
Purchase Agreement
On September 13, 2022, Sarepta Therapeutics, Inc. (the "Company") entered into a
Purchase Agreement (the "Purchase Agreement") with the several initial
purchasers named in Schedule 1 thereto (the "Initial Purchasers"), for whom
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as representatives
(the "Representatives") relating to the sale of $980.0 million aggregate
principal amount of 1.250% Convertible Senior Notes due 2027 (the "Offered
Notes") to the Initial Purchasers. The Company also granted the Initial
Purchasers an option to purchase up to an additional $150.0 million aggregate
principal amount of the Offered Notes, which option was exercised in full on
September 14, 2022. The Purchase Agreement includes customary representations,
warranties and covenants. Under the terms of the Purchase Agreement, the Company
has agreed to indemnify the Initial Purchasers against certain liabilities.
The foregoing description of the Purchase Agreement does not purport to be
complete and is qualified in its entirety by reference to the Purchase
Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
Affiliated Investor Purchase Agreement
On September 13, 2022, the Company entered into a purchase agreement (the
"Affiliated Investor Purchase Agreement") with Michael A. Chambers Living Trust
(the "Affiliated Investor"), an entity affiliated with Michael Chambers, a
member of the Company's board of directors, to issue and sell $20.0 million in
aggregate principal amount of 1.250% Convertible Senior Notes due 2027 (the
"Affiliated Investor Notes" and together with the Offered Notes, the "Notes") in
a private placement pursuant to an exemption from the registration requirements
of the Securities Act of 1933, amended (the "Securities Act") afforded by
Section 4(a)(2) of the Securities Act. The Affiliated Investor Purchase
Agreement includes customary representations, warranties and covenants by the
Company and customary closing conditions.
The foregoing description of the Affiliated Investor Purchase Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Affiliated Investor Purchase Agreement, which is filed as Exhibit 10.2 to this
Current Report on Form 8-K and is incorporated herein by reference.
Indenture and the Notes
The Notes were issued by the Company on September 16, 2022 pursuant to an
Indenture, dated as of such date (the "Indenture"), between the Company and U.S.
Bank Trust Company, National Association, as trustee (the "Trustee"). The Notes
bear cash interest at the annual rate of 1.250%, payable on March 15 and
September 15 of each year, beginning on March 15, 2023, and will mature on
September 15, 2027 unless earlier redeemed, converted or repurchased. The
Company will settle conversions of the Notes through payment or delivery, as the
case may be, of cash, shares of common stock of the Company or a combination of
cash and shares of common stock, at the Company's option (subject to, and in
accordance with, the settlement provisions of the Indenture). The initial
conversion rate for the Notes is 7.0439 shares of common stock (subject to
adjustment as provided for in the Indenture) per $1,000 principal amount of
Notes, which is equivalent to an initial conversion price of approximately
$141.97 per share of the Company's common stock, representing an approximately
35.0% conversion premium on the closing price of the Company's common stock of
$105.16 per share on September 13, 2022. Prior to September 20, 2025, the Notes
will not be redeemable. On or after September 20, 2025 and on or before the 41st
scheduled trading day immediately preceding the maturity date, the Company may
redeem for cash all or part of the Notes (subject to certain conditions), at its
option, if the last reported sale price of the Company's common stock has been
at least 130% of the conversion price then in effect for at least 20 trading
days (whether or not consecutive), including the trading day immediately
preceding the date on which the Company provides notice of redemption, during
any 30 consecutive trading day period ending on, and including, the trading day
immediately preceding the date on which the Company provides notice of
redemption. If the Company elects to redeem fewer than all of the outstanding
Notes, at least $150.0 million aggregate principal amount of Notes must be
outstanding and not subject to redemption as of, and after giving effect to,
delivery of the relevant notice of redemption.
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Holders of the Notes may convert their Notes at their option at any time prior
to the close of business on the business day immediately preceding March 15,
. . .
Item 1.02 Termination of a Material Definitive Agreement.
On September 16, 2022, in connection with the series of transactions described
herein, the Company prepaid in full all of its amounts outstanding with respect
to the term loans and repaid in full all obligations to the lenders under the
Loan Agreement, dated as of December 13, 2019 and amended as of September 24,
2020 by and among the Company, the additional Credit Parties thereto (as defined
therein), BioPharma Credit PLC, BPCR Limited Partnership and BioPharma Credit
Investments V (Master) LP (the "Loan Agreement") and the related loan. The
aggregate payoff amount was approximately $585.5 million (the "Payoff Amount"),
which includes $7.0 million of aggregate prepayment premiums, and, upon payment
of the Payoff Amount, the obligations of the Company under the Loan Agreement
and related loan documents were satisfied in full and the Loan Agreement and
related loan documents terminated with respect to the Company.
A description of the terms of the Loan Agreement is set forth under Item 1.01 of
the Company's Form 8-K filed December 13, 2019 and a description of the terms of
the amendment to the Loan Agreement is set forth under Item 1.01 of the
Company's Form 8-K filed September 25, 2020, and are incorporated by reference
into this Item 1.02.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth under Item 1.01 of this Current Report on Form 8-K
under the heading "Indenture and the Notes" is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 of this Current Report on Form 8-K
under the heading "Indenture and the Notes" is incorporated herein by reference.
On September 16, 2022, the Company issued $1.130 billion aggregate principal
amount (including the Offered Notes issued upon exercise in full of the Initial
Purchasers' option to purchase additional Notes, which occurred on September 14,
2022) of Offered Notes to the Initial Purchasers in a private placement pursuant
to exemptions from the registration requirements of the Securities Act. The
Company offered and sold the Offered Notes to the Initial Purchasers in reliance
on the exemption from registration provided by Section 4(a)(2) of the Securities
Act, for resale by such Initial Purchasers to persons reasonably believed to be
"qualified institutional buyers" pursuant to the exemption from registration
provided by Rule 144A under the Securities Act. The Company also sold
$20.0 million aggregate principal amount of Affiliated Investor Notes to the
Affiliated Investor in reliance on the exemption from registration provided by
Section 4(a)(2) of the Securities Act, concurrently with the offer and sale of
the Offered Notes to the Initial Purchasers. The Company will settle conversions
of the Notes by paying and/or delivering, as the case may be, cash, shares of
the Company's common stock or a combination of cash and shares of the Company's
common stock, at the Company's election. The initial maximum number of shares of
common stock underlying the Notes is 8,100,485 shares of the common stock.
Neither the Notes nor the underlying shares of common stock have been registered
under the Securities Act or may be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
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Item 8.01 Other Events.
On September 19, 2022, the Company used a portion of the net proceeds from the
sales of the Notes to repurchase $150.6 million aggregate principal amount of
the Company's 1.50% Convertible Senior Notes due 2024.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements. Investors
are cautioned not to place undue reliance on these forward-looking statements,
including, but not limited to, statements about the expected benefits of the
Capped Call Transactions and the anticipated impact of any trading activity in
connection with these transactions. Each forward-looking statement is subject to
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied in such statement. Applicable risks and
uncertainties include, without limitation, the risk that the Capped Call
Transactions will not reduce the potential dilution to the common stock and/or
offset any cash payments the Company is required to make. In addition,
applicable risks also include those that are listed under the heading "Risk
Factors" and elsewhere in the Company's Annual Report on Form 10-K for the year
ended December 31, 2021 or Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2022 and June 30, 2022, and in the Company's subsequent filings with
the Securities and Exchange Commission. Except as otherwise noted, these
forward-looking statements speak only as of the date of this Form 8-K. All
forward-looking statements are qualified in their entirety by this cautionary
statement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
4.1 Indenture, dated as of September 16, 2022, by and between Sarepta
Therapeutics, Inc. and U. S. Bank Trust Company, National Association
(including the form of the 1.250% Convertible Senior Note due 2027).
4.2 Form of Note (included in Exhibit 4.1).
10.1 Purchase Agreement, dated as of September 13, 2022, among Sarepta
Therapeutics, Inc. and the several Initial Purchasers named in
Schedule 1 thereto for whom Goldman, Sachs & Co. LLC and J.P. Morgan
Securities LLC acted as Representatives.
10.2 Purchase Agreement, dated as of September 13, 2022, between Sarepta
Therapeutics, Inc. and Michael A. Chambers Living Trust.
10.3 Base Call Option Transaction Confirmation, dated as of September 13,
2022, between Sarepta Therapeutics, Inc. and Barclays Bank PLC.
10.4 Base Call Option Transaction Confirmation, dated as of September 13,
2022, between Sarepta Therapeutics, Inc. and Goldman Sachs & Co. LLC.
10.5 Base Call Option Transaction Confirmation, dated as of September 13,
2022, between Sarepta Therapeutics, Inc. and Mizuho Markets Americas
LLC.
10.6 Base Call Option Transaction Confirmation, dated as of September 13,
2022, between Sarepta Therapeutics, Inc. and Morgan Stanley & Co. LLC.
10.7 Base Call Option Transaction Confirmation, dated as of September 13,
2022, between Sarepta Therapeutics, Inc. and RBC Capital Markets,
LLC.
10.8 Additional Call Option Transaction Confirmation, dated as of
September 14, 2022 between Sarepta Therapeutics, Inc. and Barclays
Bank PLC.
10.9 Additional Call Option Transaction Confirmation, dated as of
September 14, 2022 between Sarepta Therapeutics, Inc. and Goldman
Sachs & Co. LLC.
10.10 Additional Call Option Transaction Confirmation, dated as of
September 14, 2022 between Sarepta Therapeutics, Inc. and Mizuho
Markets Americas LLC.
10.11 Additional Call Option Transaction Confirmation, dated as of
September 14, 2022 between Sarepta Therapeutics, Inc. and Morgan
Stanley & Co. LLC.
10.12 Additional Call Option Transaction Confirmation, dated as of
September 14, 2022 between Sarepta Therapeutics, Inc. and RBC Capital
markets, LLC.
104 The cover page from this Current Report on Form 8-K, formatted in
Inline XBRL
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