Item 1.01 Entry into a Material Definitive Agreement.
Convertible Note Offering
On
October 16, 2018, Karyopharm Therapeutics Inc. (the Company) completed its previously announced private offering of $150 million aggregate principal amount of its 3.00% convertible senior notes due 2025 (the Notes).
The Notes were sold under a purchase agreement, dated as of October 10, 2018, entered into by and between the Company and each of J.P. Morgan Securities LLC and Leerink Partners LLC, as representatives of the several initial purchasers named
therein (collectively, the Initial Purchasers), for resale to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act). The Company also granted the Initial
Purchasers an option to purchase within a
13-day
period from, and including, October 10, 2018 up to an additional $22.5 million aggregate principal amount of the Notes.
Indenture and the Notes
On
October 16, 2018, the Company entered into an indenture (the Indenture) with respect to the Notes with Wilmington Trust, National Association, as trustee (the Trustee). The Notes are senior unsecured obligations of the
Company and bear interest at a rate of 3.00% per year payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2019. The Notes will mature on October 15, 2025, unless earlier converted,
redeemed or repurchased in accordance with their terms.
Prior to October 15, 2022, the Company may not redeem the Notes. On or after
October 15, 2022, the Company may redeem for cash all or a portion of the Notes if the last reported sale price of the Companys common stock equals or exceeds 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 ending within five trading days prior to the date on which the Company provides notice of redemption. The redemption price will be equal to the principal amount of the Notes
to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the Notes.
The Notes are convertible into shares of the Companys common stock at an initial conversion rate of 63.0731 shares per $1,000 principal
amount of Notes (equivalent to an initial conversion price of approximately $15.85 per share of common stock). The conversion rate will be subject to adjustment upon the occurrence of certain events as provided in the Indenture, but will not be
adjusted for any accrued and unpaid interest. The initial conversion price represents a premium of approximately 27.5% to $12.435, which was the last reported sale price of the Companys common stock on the Nasdaq Global Select Market on
October 10, 2018. Upon conversion of the Notes, the Company will pay or deliver, as the case may be, cash, shares of the Companys common stock or a combination of cash and shares of common stock, at the Companys election (subject
to, and in accordance with, the settlement provisions of the Indenture).
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 July 15, 2025 only upon the occurrence of certain circumstances. On or after July 15, 2025 until the close of business on the second scheduled trading day
immediately preceding the maturity date of the Notes, holders may convert the Notes at any time.
The conversion rate is subject to
customary anti-dilution adjustments. In addition, if certain corporate events described in the Indenture occur prior to the maturity date, the Company will increase the conversion rate for a holder that elects to convert its Notes in connection with
such corporate event in certain circumstances. Furthermore, calling any Note for redemption will result in an increase in the conversion rate applicable to the conversion of that Note, if it is converted in connection with the redemption in certain
circumstances.