Jefferies LLC Wells Fargo Securities, LLC BofA Securities, Inc. As Representatives of the several Initial Purchasers c/o Jefferies LLC c/o J.P. Morgan Securities LLC New York, New York 10179 c/o Wells Fargo Securities, LLC New York, New York 10001 c/o...
Exhibit 10.1
$300,000,000
2.00% Convertible Senior Notes due 2029
Amphastar Pharmaceuticals, Inc.
PURCHASE AGREEMENT
September 12, 2023
Xxxxxxxxx LLC
X.X. Xxxxxx Securities LLC
Xxxxx Fargo Securities, LLC
BofA Securities, Inc.
As Representatives of the several Initial Purchasers
c/x Xxxxxxxxx LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
c/o X.X. Xxxxxx Securities LLC
000 Xxxxxxx Xxxxxx
c/x Xxxxx Fargo Securities, LLC
000 Xxxx 00xx Xxxxxx, 14th Floor
c/o BofA Securities, Inc.
One Bryant Park
New York, NY 10036
Ladies and Gentlemen:
Amphastar Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several initial purchasers named on Schedule A (the “Initial Purchasers”) $300,000,000 aggregate principal amount of its 2.00% Convertible Senior Notes due 2029 (the “Firm Securities”). In addition, the Company has granted to the Initial Purchasers an option to purchase up to an additional $45,000,000 aggregate principal amount of its 2.00% Convertible Senior Notes due 2029 (the “Option Securities”). The Firm Securities and the Option Securities are hereinafter referred to collectively as the “Securities.” Xxxxxxxxx LLC, X.X. Xxxxxx Securities LLC, Xxxxx Fargo Securities, LLC and BofA Securities, Inc. have agreed to act as representatives of the several Initial Purchasers (in such capacity, the “Representatives”) in connection with the offering and sale of the Securities. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Securities to be converted and pay or deliver, as the case may be, cash, shares of common stock of the Company, par value $0.0001 per share (the “Common Stock”), or a combination of cash and shares of Common Stock (any shares of Common Stock issuable upon conversion of the Securities are referred to as the “Conversion Shares”), at the Company’s election, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the Securities being converted, in accordance with and subject to the terms of, the Indenture (as defined below). The Securities will be issued pursuant to an indenture, to be
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dated as of the First Closing Date (as defined in Section 2) (the “Indenture”), between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
The Securities will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission (the “SEC”) thereunder (collectively, the “Securities Act”). Upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Securities shall bear the legends set forth in the final offering memorandum, dated the date hereof (the “Final Offering Memorandum”). The Company has prepared a preliminary offering memorandum, dated September 11, 2023 (the “Preliminary Offering Memorandum”, and together with the Final Offering Memorandum, the “Offering Memoranda”), (ii) a pricing term sheet, dated the date hereof, attached hereto as Schedule B (the “Pricing Term Sheet”), which includes pricing terms and other information with respect to the Securities and the Conversion Shares, and (iii) the Final Offering Memorandum, in each case, relating to the offer and sale of the Securities (the “Offering”). All references in this Agreement to the Preliminary Offering Memorandum, the Time of Sale Document (as defined herein) or the Final Offering Memorandum include, unless expressly stated otherwise, (i) all amendments or supplements thereto, and (ii) all documents, financial statements and schedules and other information contained, incorporated by reference or deemed incorporated by reference therein (and references in this Agreement to such information being “contained,” “included” or “stated” (and other references of like import) in the Preliminary Offering Memorandum, the Time of Sale Document or the Final Offering Memorandum shall be deemed to mean all such information contained, incorporated by reference or deemed incorporated by reference therein). The Preliminary Offering Memorandum and the Pricing Term Sheet are collectively referred to herein as the “Time of Sale Document.”
As used herein, “Applicable Time” shall be 10:15 p.m. (New York City time) on September 12, 2023. This Agreement, the Indenture and the Securities are collectively referred to herein as the “Transaction Documents”, and the transactions contemplated hereby and thereby are collectively referred to herein as the “Transactions.” The Company hereby confirms its agreements with the Initial Purchasers as follows:
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the dates indicated and the results of their operations, changes in shareholders’ equity and cash flows for the periods specified. The abbreviated financial statements of Baqsimi contained or incorporated by reference in the Time of Sale Document and the Final Offering Memorandum present fairly the financial position of Baqsimi as of the dates indicated and the statements of assets acquired and statements of revenues and direct expenses for the periods specified. All such financial statements have been prepared in conformity with generally accepted accounting principles as applied in the United States on a consistent basis throughout the periods involved (“GAAP”), except as may be expressly stated in the related notes thereto, and the requirements of Regulation S-X. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Time of Sale Document and the Final Offering Memorandum fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto. No other financial statements or supporting schedules are required to be included in the Time of Sale Document and the Final Offering Memorandum. The financial data set forth in each of the Time of Sale Document and the Final Offering Memorandum under the captions “Capitalization” fairly present the information set forth therein on a basis consistent with that of the audited financial statements of the Company and its subsidiaries contained in the Time of Sale Document and the Final Offering Memorandum. The disclosures contained in the Time of Sale Document, the Final Offering Memorandum and any Company Additional Written Communications that constitute non-GAAP financial measures (as defined by the rules and regulations under the Securities Act and the Exchange Act) comply in all material respects with Regulation G under the Exchange Act and Item 10 of Regulation S-K under the Securities Act, as applicable. The unaudited pro forma financial information and related notes and supporting schedules of the Company and the subsidiaries contained or incorporated by reference in the Time of Sale Document and the Final Offering Memorandum have been prepared in accordance with the requirements of Regulation S-X and have been properly presented on the bases described therein, and give effect to assumptions used in the preparation thereof are reasonable basis and in good faith and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.
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internal controls (whether or not remediated); all such material weaknesses and significant deficiencies, if any, have been disclosed. Since the date of the most recent evaluation of such internal controls, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses. Since the end of the Company’s most recent audited fiscal year, there have been no significant deficiencies or material weakness in the Company’s internal control over financial reporting (whether or not remediated) and there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company is not aware of any change in its internal control over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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its obligations under the Transaction Documents. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of each of the Transaction Documents and consummation of the transactions contemplated by the Transaction Documents and by the Time of Sale Document and the Final Offering Memorandum, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act and such as may be required under applicable state securities or blue sky laws. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.
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Offering Memorandum that are not so described therein; and (vi) no government funding, facilities or resources of a university, college, other educational institution or research center was used in the development of any Intellectual Property that is owned or purported to be owned by the Company that would confer upon any governmental agency or body, university, college, other educational institution or research center any claim or right in or to any such Intellectual Property. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others: (A) challenging the Company’s rights in or to any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim; (B) challenging the validity, enforceability or scope of any Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim; or (C) asserting that the Company or any of its subsidiaries infringes, misappropriates or otherwise violates, or would, upon the commercialization of any product or service described in the Time of Sale Document or the Final Offering Memorandum as under development, infringe, misappropriate or otherwise violate, any patent, trademark, trade name, service name, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any facts which would form a reasonable basis for any such action, suit, proceeding or claim. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company, upon any officers, directors or, to the Company’s knowledge, employees of the Company, and the Company is not aware of any facts that would form a reasonable basis for a successful challenge that any of its employees are in or have ever been in violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where such violation relates to such employee’s breach of a confidentiality obligation, obligation to assign intellectual property to an employer, or obligation not to use third-party intellectual property or other proprietary rights of a third party. The products described in the Time of Sale Document and the Final Offering Memorandum fall within the scope of the claims of one or more patents owned by, or exclusively licensed to, the Company or any subsidiary.
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person, or in any country or territory, that at the time of such financing, is the subject or the target of Sanctions or in any other manner that will result in a violation by any person (including any person participating in the transaction whether as initial purchaser, advisor, investor or otherwise) of applicable Sanctions. The Company and its subsidiaries have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions or with any Sanctioned Jurisdiction.
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knowledge, agents and contractors has committed any prohibited act, made any statement of material fact or made any material omissions that would reasonably be expected to provide a basis for FDA to invoke the FDA Application Integrity Policy or for any other governmental agency to invoke a similar policy. The Company and its subsidiaries have filed, maintained, and submitted all reports, documents, forms, notices, applications, records, submissions and supplements or amendments as required by any applicable law or regulations, and all such reports, documents, forms, notices, applications, records, submissions and supplements or amendments were complete and accurate on the date filed in all material respects (or were corrected or supplemented by a subsequent submission). Neither the Company, its subsidiaries nor any of their respective employees, officers, directors, and to the Company’s knowledge, agents and contractors has made any materially false statements on, or material omissions from, any notifications, applications, approvals, reports and other submissions required to be submitted to FDA or any other governmental entity. The manufacturing facilities and operations of the Company and its subsidiaries and, to the Company’s knowledge, their respective manufacturers and suppliers, are and have been in compliance in all material respects with all applicable laws, regulations, and requirements, including applicable Health Care Laws.
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Any certificate signed by any officer of the Company and delivered to any Initial Purchaser or to counsel for the Initial Purchasers in connection with the offering, or the purchase and sale, of the Securities shall be deemed a representation and warranty by the Company to each Initial Purchaser as to the matters covered thereby.
The Company has a reasonable basis for making each of the representations set forth in this Section 1. The Company acknowledges that the Initial Purchasers and, for purposes of the opinions to be delivered pursuant to Section 6 hereof, counsel to the Company and counsel to the Initial Purchasers, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.
The Company hereby grants to the several Initial Purchasers the right to purchase at their election the Option Securities, solely for the purpose of covering sales of Securities in excess of the number of the Firm Securities. The option granted hereunder may be exercised for settlement no later than the thirteenth calendar day from, and including, the First Closing Date. Subject to the preceding sentence the option granted hereunder may be exercised at any time, and from time to time, in whole or in part upon written notice by the Representatives to the Company. Such notice shall set forth (i) the aggregate principal amount of Option Securities as to which the Initial Purchasers are exercising the option, and (ii) the time, date and place at which the Securities will be delivered (which time and date may be simultaneous with, but not earlier than, the First Closing Date for the Firm Securities; and in the event that such time and date
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are simultaneous with such First Closing Date, the term “First Closing Date” shall refer to the time and date of delivery to the Initial Purchasers of and payment for the Firm Securities and such Option Securities). If any Option Securities are to be purchased, each Initial Purchaser, severally and not jointly, agrees to purchase from the Company the principal amount of Option Securities that bears the same proportion to the total principal amount of Option Securities to be purchased as the principal amount of Firm Securities set forth on Schedule A opposite the name of such Initial Purchaser bears to the total principal amount of Firm Securities. Any such time and date of delivery, if subsequent to the First Closing Date, is called an “Option Closing Date,” shall be determined by the Representatives and shall not be earlier than one business day after delivery of such notice of exercise.
The Initial Purchasers have advised the Company, and the Company understands, that the Initial Purchasers will make offers to sell (the “Exempt Resales”) some or all of the Securities purchased by the Initial Purchasers hereunder on the terms set forth in the Time of Sale Document to persons (the “Subsequent Purchasers”) whom the Initial Purchasers reasonably believe are “qualified institutional buyers” (“QIBs”) (as defined in Rule 144A under the Securities Act).
Payment for the Securities shall be made by wire transfer in immediately available funds to the account specified by the Company to the Representatives in the case of the Firm Securities, at the offices of Xxxxxxx Procter LLP at 10:00 a.m. New York City time on September 15, 2023, or at such other time not later than seven full business days thereafter as the Representatives and the Company determine (such time being herein referred to as the “First Closing Date”), or, in the case of the Option Securities, on the Option Closing Date.
Payment for the Securities to be purchased on the First Closing Date or any Option Closing Date, as the case may be, shall be made against delivery to the nominee of The Depository Trust Company (“DTC”), for the account of the Initial Purchasers of the Securities to be purchased on such date, of one or more global notes representing the Securities (collectively, the “Global Note”), with any transfer taxes payable in connection with the sale of such Securities duly paid by the Company. The Global Note will be made available for inspection by the Initial Purchasers at the offices of Xxxxxxx Procter LLP not later than 5:00 p.m., New York City time, on the business day prior to the First Closing Date or any Option Closing Date, as the case may be.
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The Initial Purchasers may, in their sole discretion, waive in writing the performance by the Company of any one or more of the foregoing covenants or extend the time for their performance.
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assurance letter of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C., counsel for the Company, dated as of such date, in form and substance satisfactory to the Representatives.
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accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as contemplated herein and in connection with the other transactions contemplated by this Agreement shall be satisfactory in form and substance to the Representatives and counsel for the Representatives.
If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Initial Purchasers by notice from the Representatives to the Company at any time on or prior to the First Closing Date and, with respect to the Option Securities, at any time on or prior to the applicable Option Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 4, Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such termination.
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The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 9(c), any documented legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 9(c) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 10; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 9(c) for purposes of indemnification.
The Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 10.
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be required to contribute any amount in excess of the discounts and commissions received by such Initial Purchaser in connection with the Exempt Resales. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 10 are several, and not joint, in proportion to their respective commitments as set forth opposite their respective names on Schedule A. For purposes of this Section 10, each affiliate, director,
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officer, employee and agent of each Initial Purchaser and each person, if any, who controls such Initial Purchaser within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Initial Purchaser, and each director of the Company, each officer of the Company, and each person, if any, who controls the Company within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.
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If to the Representatives:Xxxxxxxxx LLC
000 Xxxxxxx Xxxxxx
New York, New York 10022
Facsimile:(000) 000-0000
Attention:General Counsel
X.X. Xxxxxx Securities LLC
000 Xxxxxxx Xxxxxx
New York, New York 10179
Facsimile:(000) 000-0000
Attention:Equity Syndicate Desk
Xxxxx Fargo Securities, LLC
000 Xxxx 00xx Xxxxxx, 14th Floor
New York, New York 10001
Facsimile:(000) 000-0000
Attention:Equity Syndicate
(with such fax or other electronic means to be confirmed by telephone to (000) 000-0000)
BofA Securities, Inc.
One Bryant Park
New York, NY 10036
Facsimile:(000) 000-0000
Attention:Syndicate Department
with a copy to ECM Legal (fax (000) 000-0000)
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with a copy to:Xxxxxxx Procter LLP
000 Xxxxxx Xxxxxx
New York, NY 10018
Attention:Xxxxx X. Xxxxx; Xxxxxxxx X. Xxxxx; Xxx X. Xx Xxxxxxx
If to the Company:Amphastar Pharmaceuticals, Inc.
00000 0xx Xxxxxx
Rancho Cucamonga, CA 91730
Attention:Xxxxxxx X. Xxxxxx
with a copy to:Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention:Xxxxxxx Xxxxxx; Xxxxxx Xxxxxxx
Any party hereto may change the address for receipt of communications by giving written notice to the others.
For purposes of this Agreement, (A) “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); (B) “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance
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with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); (C) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and (D) “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 9 and the contribution provisions of Section 10, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Section 9 and Section 10 hereof fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to assure that adequate disclosure has been made in the Preliminary Offering Memorandum, the Time of Sale Document, the Final Offering Memorandum and the Company Additional Written Communications (and any amendments and supplements to the foregoing), as contemplated by the Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument will become a binding agreement among the Company and the Representatives, for themselves and on behalf of the several Initial Purchasers.
Very truly yours, | |
By: | /s/Xxxxxxx X. Xxxxxx |
Name: | Xxxxxxx X. Xxxxxx |
Title: | Chief Financial Officer |
Accepted as of the date hereof: | ||
Acting individually and as Representatives of the several Initial Purchasers named in the attached Schedule A | ||
XXXXXXXXX LLC | ||
By: | /s/Xxxxxx Xxxxxx | |
Name: | Xxxxxx Xxxxxx | |
Title: | Managing Director | |
X.X. Xxxxxx Securities LLC | ||
By: | /s/Xxxxxxx Xxxxxx | |
Name: | Xxxxxxx Xxxxxx | |
Title: | Executive Director | |
Xxxxx Fargo Securities, LLC | ||
By: | /s/Xxxxx Xxxxxxxxx | |
Name: | Xxxxx Xxxxxxxxx | |
Title: | Managing Director | |
BofA Securities, Inc. | ||
By: | /s/Xxxxx Xxxxxxx | |
Name: | Xxxxx Xxxxxxx | |
Title: | Managing Director | |
Initial Purchaser | | Firm Securities | |
| $72,000,000 | | |
| $72,000,000 | | |
| $60,000,000 | | |
| $60,000,000 | | |
| $21,000,000 | | |
| $9,000,000 | | |
| $6,000,000 | | |
| $300,000,000 | |
Schedule B
PRICING TERM SHEET
PRICING TERM SHEET | STRICTLY CONFIDENTIAL |
DATED September 12, 2023 | |
AMPHASTAR PHARMACEUTICALS, INC.
$300,000,000 AGGREGATE PRINCIPAL AMOUNT OF
2.00% CONVERTIBLE SENIOR NOTES DUE 2029
The information in this pricing term sheet supplements Amphastar Pharmaceuticals, Inc.’s preliminary offering memorandum, dated September 11, 2023 (the “Preliminary Offering Memorandum”), and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. In all other respects, this pricing term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum, including all documents incorporated by reference therein. References to “we,” “our” and “us” refer to Amphastar Pharmaceuticals, Inc. and not to its subsidiaries. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Offering Memorandum. All references to dollar amounts are references to U.S. dollars.
Issuer: | |||
Ticker / Exchange for Common Stock (“common stock”): | “AMPH” / The Nasdaq Global Select Market. | ||
Securities: | 2.00% Convertible Senior Notes due 2029 (the “notes”). | ||
Principal Amount: | $300,000,000. | ||
Option to Purchase Additional Notes: | $45,000,000. | ||
Denominations: | $1,000 and integral multiples of $1,000 in excess thereof. | ||
Ranking: | Senior unsecured. | ||
Maturity: | March 15, 2029, unless earlier converted, redeemed or repurchased. | ||
Optional Redemption: | We may not redeem the notes prior to September 21, 2026. On or after September 21, 2026 and prior to the 41st scheduled trading day preceding the maturity date, we may redeem for cash all or any portion of the notes (subject to the partial redemption limitation set forth below), at our option, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the |
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principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If we elect to redeem fewer than all of the outstanding notes, at least $100.0 million aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date. No sinking fund is provided for the notes, which means that we are not required to redeem or retire the notes periodically. See “Description of Notes—Optional Redemption” in the Preliminary Offering Memorandum. | |||
Fundamental Change: | If a “fundamental change” (as defined in the Preliminary Offering Memorandum under the heading “Description of Notes—Fundamental Change Permits Holders to Require Us to Repurchase Notes”) occurs at any time prior to the maturity date, subject to certain conditions and except as described in the Preliminary Offering Memorandum under the heading “Description of Notes— Fundamental Change Permits Holders to Require Us to Repurchase Notes,” holders will have the right, at their option, to require us to repurchase for cash all of their notes, or any portion of the principal amount thereof that is equal to $1,000 or an integral multiple thereof. The fundamental change repurchase price we are required to pay will be equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. See “Description of Notes—Fundamental Change Permits Holders to Require Us to Repurchase Notes” in the Preliminary Offering Memorandum. | ||
Interest and Interest Payment Dates: | 2.00% per year. Interest will accrue from September 15, 2023 and will be payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2024. | ||
Regular Record Dates: | March 1 and September 1 of each year, immediately preceding any March 15 and September 15 interest payment date, as the case may be. | ||
Issue Price: | 100% of the principal amount of the notes, plus accrued interest, if any, from September 15, 2023. | ||
Last Reported Sale Price of Our Common Stock on The Nasdaq Global Select Market on September 12, 2023: | $46.64 per share. | ||
Initial Conversion Rate: | 15.8821 shares of common stock per $1,000 principal amount of the notes, subject to adjustment. | ||
Initial Conversion Price: | Approximately $62.96 per share of common stock, subject to adjustment. | ||
Conversion Premium: | Approximately 35.0% above the last reported sale price of our common stock on September 12, 2023. |
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Settlement Method: | Cash up to the aggregate principal amount of the notes to be converted and cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the notes being converted, as described in the Preliminary Offering Memorandum. | ||
Joint Book-Running Managers: | Jefferies LLC J.X. Xxxxxx Securities LLC Wells Fargo Securities, LLC BofA Securities, Inc. Truist Securities, Inc. | ||
Co-Managers: | Capital One Securities, Inc. CIBC World Markets Corp | ||
Pricing Date: | September 12, 2023. | ||
Trade Date: | September 13, 2023. | ||
Expected Settlement Date: | September 15, 2023 (T+2). | ||
CUSIP Number (144A): | 03209R AA1 | ||
ISIN (144A): | US03209RAA14 | ||
Listing: | None. | ||
Use of Proceeds: | We estimate that the net proceeds from this offering will be approximately $290.2 million (or approximately $333.9 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and estimated offering expenses payable by us. We intend to use (i) approximately $200.0 million of the net proceeds from this offering to repay borrowings under the Xxxxx Fargo Credit Facility and (ii) approximately $50.0 million of the net proceeds from this offering to repurchase our common stock from certain purchasers of the notes concurrently with the pricing of this offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as our agent (the “share repurchases”). We intend to use the remainder of the proceeds from this offering for general corporate purposes, which may include the repayment of our indebtedness, the payment of milestone payments in connection with the acquisition of BAQSIMI® (glucagon) nasal powder, working capital, capital expenditures and potential acquisitions and strategic transactions. From time to time, we evaluate potential strategic transactions and acquisitions of businesses, technologies or products. We have not designated any specific uses and have no current agreements with respect to any material acquisitions or strategic transactions. If the initial purchasers exercise their option to purchase additional notes, we expect to use the net proceeds from the sale of the additional notes for general corporate purposes as described above. | ||
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The agreed to purchase price per share of our common stock in the share repurchases is equal to the last reported sale price per share of our common stock of $46.64 on the Nasdaq Global Select Market on September 12, 2023. The share repurchases may have increased (or reduced the size of any decrease in) the market price of our common stock prior to, concurrently with or shortly after the pricing of the notes, and may have resulted in a higher effective conversion price for the notes. See “Use of Proceeds” in the Preliminary Offering Memorandum. | ||
Description of Notes—Conversion Rights—Increase in Conversion Rate upon Conversion upon a Make-Whole Fundamental Change or during a Redemption Period
Holders who convert their notes in connection with a “make-whole fundamental change” (as defined in the Preliminary Offering Memorandum) occurring prior to the maturity date or who convert their notes called (or deemed called) for redemption during the “redemption period” (as defined in the Preliminary Offering Memorandum) for such notes may be entitled to an increase in the conversion rate for the notes so surrendered for conversion as set forth in the Preliminary Offering Memorandum under the caption “Description of Notes—Conversion Rights—Increase in Conversion Rate upon Conversion upon a Make-Whole Fundamental Change or during a Redemption Period.”
The following table sets forth the number of additional shares by which the conversion rate for the notes will be increased per $1,000 principal amount of notes for each stock price and effective date or redemption notice date, as applicable, set forth below:
| Stock Price | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Effective Date / Redemption Notice Date | $46.64 | $55.00 | $62.96 | $71.00 | $81.85 | $100.00 | $125.00 | $150.00 | $200.00 | $300.00 |
September 15, 2023 | 5.5587 | 4.0551 | 3.1072 | 2.4406 | 1.8260 | 1.2072 | 0.7579 | 0.5191 | 0.2827 | 0.0000 |
March 15, 2024 | 5.5587 | 4.0551 | 3.0894 | 2.4056 | 1.7807 | 1.1603 | 0.7190 | 0.4882 | 0.2641 | 0.0000 |
March 15, 2025 | 5.5587 | 4.0347 | 2.9919 | 2.2769 | 1.6386 | 1.0278 | 0.6155 | 0.4101 | 0.2194 | 0.0000 |
March 15, 2026 | 5.5587 | 3.8660 | 2.7667 | 2.0331 | 1.4012 | 0.8296 | 0.4741 | 0.3098 | 0.1658 | 0.0000 |
March 15, 2027 | 5.5587 | 3.5720 | 2.4069 | 1.6638 | 1.0629 | 0.5720 | 0.3074 | 0.1994 | 0.1100 | 0.0000 |
March 15, 2028 | 5.5587 | 3.0909 | 1.8189 | 1.0880 | 0.5831 | 0.2624 | 0.1360 | 0.0928 | 0.0556 | 0.0000 |
March 15, 2029 | 5.5587 | 2.2996 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
The exact stock prices and effective dates or redemption notice dates may not be set forth in the table above, in which case:
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| to the conversion rate. |
Notwithstanding the foregoing, in no event will the conversion rate per $1,000 principal amount of notes exceed 21.4408 shares of common stock, subject to adjustment in the same manner as such conversion rate as set forth in the Preliminary Offering Memorandum under the heading “Description of Notes—Conversion Rights—Conversion Rate Adjustments.”
__________________
This communication is intended for the sole use of the person to whom it is provided by the sender. This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of the notes or the offering thereof. This communication does not constitute an offer to sell or the solicitation of an offer to buy any notes in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
The notes and any shares of common stock issuable upon conversion of the notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws, and may not be offered or sold within the United States or any other jurisdiction, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. The initial purchasers are initially offering the notes only to persons reasonably believed to be qualified institutional buyers as defined in, and in reliance on, Rule 144A under the Securities Act.
The notes and any shares of common stock issuable upon conversion of the notes are not transferable except in accordance with the restrictions described under “Notice to Investors” and “Transfer Restrictions” in the Preliminary Offering Memorandum.
Any legends, disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such legends, disclaimers or other notices have been automatically generated as a result of this communication having been sent via Bloomberg or another system.
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Schedule C
Form of Lock-Up Agreement
September 11, 2023
Xxxxxxxxx LLC
X.X. Xxxxxx Securities LLC
Xxxxx Fargo Securities, LLC
BofA Securities, Inc.
As Representatives of the several Initial Purchasers
c/x Xxxxxxxxx LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
c/o X.X. Xxxxxx Securities LLC
000 Xxxxxxx Xxxxxx
New York, New York 10179
c/x Xxxxx Fargo Securities, LLC
000 Xxxx 00xx Xxxxxx, 14th Floor
New York, New York 10001
c/o BofA Securities, Inc.
One Bryant Park
New York, NY 10036
RE:Amphastar Pharmaceuticals, Inc. (the “Company”)
Ladies & Gentlemen:
The undersigned is an owner of shares of common stock, par value $0.0001 per share, of the Company (“Shares”) and/or Related Securities. The Company proposes to conduct an offering (the “Offering”) pursuant to Rule 144A under the Securities Act of Convertible Senior Notes (the “Securities”) for which Xxxxxxxxx LLC, X.X. Xxxxxx Securities LLC, Xxxxx Fargo Securities, LLC and BofA Securities, Inc. (collectively, the “Representatives”) will act as the representatives of the several initial purchasers. The undersigned recognizes that the Offering will benefit each of the Company and the undersigned. The undersigned acknowledges that the initial purchasers are relying on the representations and agreements of the undersigned contained in this letter agreement in conducting the Offering and, at a subsequent date, in entering into a purchase agreement (the “Purchase Agreement”) and other arrangements with the Company with respect to the Offering.
Annex A sets forth definitions for capitalized terms used in this letter agreement that are not defined in the body of this letter agreement. Those definitions are a part of this letter agreement.
In consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees that, during the Lock-up Period, subject to the exceptions set forth in this letter agreement, the undersigned will not (and will cause any Family Member not to), without the prior written consent of Jefferies LLC, which may withhold its consent in its sole discretion:
| ● | Sell or Offer to Sell any Shares or Related Securities currently or hereafter owned either of record or beneficially (as defined in Rule 13d-3 under the Exchange Act) by the undersigned or such Family Member, |
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| ● | enter into any Swap, |
| ● | make any demand for, or exercise any right with respect to, the registration under the Securities Act of the offer and sale of any Shares or Related Securities, or cause to be filed a registration statement, prospectus or prospectus supplement (or an amendment or supplement thereto) with respect to any such registration, or |
| ● | publicly announce any intention to do any of the foregoing. |
The undersigned acknowledges and agrees that the foregoing precludes the undersigned from engaging in any hedging or other transactions or arrangements designed or intended, or which could reasonably be expected to lead to or result in, a sale or disposition or transfer (whether by the undersigned or any other person) of any economic consequences of ownership, in whole or in part, directly or indirectly, of any Shares or Related Securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Shares or Related Securities, in cash or otherwise.
The foregoing will not apply to the sale of the Securities to the initial purchasers, as contemplated by the Purchase Agreement. In addition, the foregoing restrictions shall not apply to (i) the sale of Shares acquired in open market transactions after the completion of the Offering; provided that no filing under the Exchange Act or other public announcement shall be voluntarily made in connection with such sale, and if such filing or public announcement shall be legally required during the Lock-up Period, such filing or public announcement clearly indicate in the footnotes thereto the circumstances of such sale; (ii) the transfer of Shares or Related Securities by gift, (iii) the transfer of Shares or Related Securities by will or intestate succession to the legal representative, heir or beneficiary of the undersigned, (iv) the transfer of Shares or Related Securities to a trust whose direct or indirect beneficiaries consist exclusively of one or more of the undersigned and/or a Family Member, (v) transfers or dispositions of the undersigned’s Shares or Related Securities to any corporation, partnership, limited liability company or other entity all of the beneficial ownership interests of which are held by the undersigned or any Family Member, (vi) distributions of the undersigned’s Shares or Related Securities to limited partners, general partners, members, shareholders or other equityholders of the undersigned, provided that any such transfer or distribution shall not involve a disposition for value, (vii) by operation of law, including pursuant to a domestic order or negotiated divorce settlement or (viii) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, the transfer of Shares or Related Securities to another corporation, partnership, limited liability company, trust or other business entity that is a direct or indirect affiliate (as defined in Rule 405 promulgated under the Securities Act) of the undersigned, provided that any such transfer or distribution shall not involve a disposition for value; provided, however, that in any such sale, transfer or distribution (or similar transaction) permitted by the above clauses (ii)-(viii), it shall be a condition to such transfer that:
| ● | each transferee executes and delivers to Jefferies LLC an agreement in form and substance satisfactory to Xxxxxxxxx LLC stating that such transferee is receiving and holding such Shares and/or Related Securities subject to the provisions of this letter agreement and agrees not to Sell or Offer to Sell such Shares and/or Related Securities, engage in any Swap or engage in any other activities restricted under this letter agreement except in accordance with this letter agreement (as if such transferee had been an original signatory hereto), and |
| ● | prior to the expiration of the Lock-up Period, no public disclosure or filing under the Exchange Act by any party to the transfer (donor, donee, transferor or transferee) shall be made voluntarily, and if such filing or public announcement shall be legally required during the Lock-up Period, such filing or public announcement clearly indicate in the footnotes thereto the circumstances of such transfer. |
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Furthermore, notwithstanding the restrictions imposed by this letter agreement, the undersigned may (i) exercise an option to purchase Shares granted under any equity incentive plan or stock purchase plan of the Company existing as of the date hereof and described in the Final Offering Memorandum (as defined in the Purchase Agreement), provided that the Shares issued upon such exercise shall continue to be subject to the restrictions on transfer set forth in this letter agreement, (ii) establish a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Shares, provided that such plan does not provide for any sales or transfers of Shares or Related Securities during the Lock-up Period and the entry into such plan is not publicly disclosed, including in any filing under the Exchange Act, during the Lock-up Period (other than as required under Item 408 of Regulation S-K), (iii) transfer or sell Shares or Related Securities pursuant to any trading plan pursuant to Rule 10b5-1 under the Exchange Act that has been entered into by the undersigned prior to the date of this agreement, provided that any filing required to be made under Section 16(a) of the Exchange Act as a result of such transfer or sale shall state that such transfer or sale is pursuant to a trading plan pursuant to Rule 10b5-1; or (iv) transfer Shares or Related Securities (A) as forfeitures to satisfy tax withholding obligations of the undersigned in connection with the vesting or exercise of equity awards by the undersigned pursuant to the Company’s equity incentive plan existing as of the date hereof and described in the Final Offering Memorandum, (B) pursuant to a net exercise or cashless exercise by the undersigned of outstanding equity awards pursuant to the Company’s equity incentive plan existing as of the date hereof and described in the Final Offering Memorandum, provided that any Shares acquired upon the net exercise or cashless exercise of equity awards described in this clause (B) shall be subject to the restrictions set forth in this letter agreement, (C) pursuant to a bona fide third-party tender offer for all outstanding shares of the Company, merger, consolidation or other similar transaction made to all holders of the Company’s securities involving a change of control of the Company (including, without limitation, the entering into any lock-up, voting or similar agreement pursuant to which the undersigned may agree to transfer, sell, tender or otherwise dispose of common stock or other such securities in connection with such transaction, or vote any common stock or other such securities in favor of any such transaction), provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, such securities held by the undersigned shall remain subject to the provisions of this letter agreement, or (D) that may be deemed to have occurred as a result of the conversion of the outstanding preferred shares of the Company into shares of common stock or the exercise of warrants, provided that the restrictions set forth in this letter agreement shall apply to any of the undersigned’s Shares or Related Securities issued upon such conversion or exercise; provided that, in the case of a transfer pursuant to clause (A) or (B) above, such transfer will be allowed only to the Company and, if the undersigned is required to make a filing under the Exchange Act reporting a reduction in beneficial ownership of Shares during the Lock-up Period, the undersigned shall include a statement in such report to the effect that the purpose of such transfer was to cover tax obligations of the undersigned or net exercise or cashless exercise by the undersigned in connection with such exercise.
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of Shares or Related Securities held by the undersigned and the undersigned’s Family Members, if any, except in compliance with the foregoing restrictions.
The undersigned confirms that the undersigned has not, and has no knowledge that any Family Member has, directly or indirectly, taken any action designed to or that might reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale of the Shares. The undersigned will not, and will cause any Family Member not to take, directly or indirectly, any such action.
Whether or not the Offering occurs as currently contemplated or at all depends on market conditions and other factors. The Offering will only be made pursuant to the Purchase Agreement, the terms of which are subject to negotiation between the Company and the initial purchasers.
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The undersigned hereby represents and warrants that the undersigned has full power, capacity and authority to enter into this letter agreement. This letter agreement is irrevocable and will be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned.
Notwithstanding anything herein to the contrary, if (a) the closing of the Offering has not occurred prior to October 31, 2023, (b) after being executed, the Purchase Agreement (other than the provisions thereof that survive termination) shall terminate or be terminated prior to payment for and delivery of the Securities to be sold thereunder or (c) the Company notifies the initial purchasers in writing that it does not intend to proceed with the Offering, then the undersigned shall be released from all obligations under this letter agreement upon the earliest to occur of the events specified above.
The undersigned acknowledges and agrees that the Representatives have not provided any recommendation or investment advice nor have the Representatives solicited any action from the undersigned with respect to the Offering of the Securities and the undersigned has consulted their own legal, accounting, financial, regulatory and tax advisors to the extent deemed appropriate.
This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
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Signature
Printed Name of Person Signing
(Indicate capacity of person signing if signing as custodian or trustee, or on behalf of an entity)
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Annex A
Certain Defined Terms
Used in the Letter Agreement
For purposes of the letter agreement to which this Annex A is attached and of which it is made a part:
| ● | “Call Equivalent Position” shall have the meaning set forth in Rule 16a-1(b) under the Exchange Act. |
| ● | “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. |
| ● | “Family Member” shall mean the spouse of the undersigned, an immediate family member of the undersigned or an immediate family member of the undersigned’s spouse, in each case living in the undersigned’s household or whose principal residence is the undersigned’s household (regardless of whether such spouse or family member may at the time be living elsewhere due to educational activities, health care treatment, military service, temporary internship or employment or otherwise). “Immediate family member” as used above shall have the meaning set forth in Rule 16a-1(e) under the Exchange Act. |
| ● | “Lock-up Period” shall mean the period beginning on the date hereof and continuing through the close of trading on the date that is 60 days after the date of the Final Offering Memorandum (as defined in the Purchase Agreement). |
| ● | “Put Equivalent Position” shall have the meaning set forth in Rule 16a-1(h) under the Exchange Act. |
| ● | “Related Securities” shall mean any options or warrants or other rights to acquire Shares or any securities exchangeable or exercisable for or convertible into Shares, or to acquire other securities or rights ultimately exchangeable or exercisable for or convertible into Shares. |
| ● | “Securities Act” shall mean the Securities Act of 1933, as amended. |
| ● | “Sell or Offer to Sell” shall mean to: |
| ● | sell, offer to sell, contract to sell or lend, |
| ● | effect any short sale or establish or increase a Put Equivalent Position or liquidate or decrease any Call Equivalent Position |
| ● | pledge, hypothecate or grant any security interest in, or |
| ● | in any other way transfer or dispose of, |
in each case whether effected directly or indirectly.
| ● | “Swap” shall mean any swap, hedge or similar arrangement or agreement that transfers, in whole or in part, the economic risk of ownership of Shares or Related Securities, regardless of whether any such transaction is to be settled in securities, in cash or otherwise. |
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Capitalized terms not defined in this Annex A shall have the meanings given to them in the body of this letter agreement.
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Schedule D
Directors, Officers and Others
Signing Lock-Up Agreement
Directors and Officers:
