Item 1.01 Entry into a Material Definitive Agreement.
Reference is made to a Current Report on Form 8-K we filed on June 9, 2014 (the
"Initial Report") in which we reported that on June 3, 2014 we entered into a
Purchase Agreement (the "Purchase Agreement") with Merrill Lynch, Pierce, Fenner
& Smith Incorporated (the "Initial Purchaser") to sell $100 million in aggregate
principal amount of 4.875% Senior Convertible Notes due 2020 (the "Notes"). The
Purchase Agreement gave the Initial Purchaser a 30-day right to purchase up to
an additional $15 million principal amount of the Notes (the "Over-Allotment
Option"). On June 12, 2014, the Initial Purchaser exercised the Over-Allotment
Option and purchased an additional $15 million principal amount of the Notes.
The Notes issued pursuant to the Over-Allotment Option are in the same form as
the Notes initially issued pursuant to the Purchase Agreement and are subject to
the terms of the Indenture (the "Indenture") we entered into on June 9, 2014
with Wells Fargo Bank, National Association, as the Trustee for the Notes. The
form of Notes, Purchase Agreement and the Indenture were filed as exhibits to
the Initial Report and are incorporated by reference into this Report.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On June 12, 2014, we issued an additional $15 million in aggregate principal
amount of the Notes, pursuant to the exercise of the Over-Allotment Option. The
Notes are our senior unsecured obligations, are entitled to semi-annual interest
payments at a rate of 4.875% per annum and mature on June 1, 2020. The Notes are
convertible into shares of our common stock at an initial conversion rate of
103.7613 shares of our common stock per $1,000 principal amount of Notes
(equivalent to approximately $9.64 per share of common stock), subject to
adjustment in certain circumstances. Upon conversion, the Notes will be settled
in shares of our common stock. The foregoing description of the Notes is
qualified in its entirety by reference to the Indenture and Form of Note, copies
of which were filed as exhibits to the Initial Report and are incorporated by
reference in this Report.
Item 3.02 Unregistered Sales of Equity Securities
As discussed above, the Company issued an additional $15 million aggregate
principal amount of the Notes on June 12, 2014. The Initial Purchaser of the
Notes received an aggregate discount of approximately $0.6 million. The offer
and sale of the Notes to the Initial Purchaser was not registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the
exemption from registration under Section 4(2) of the Securities Act as such
transaction did not involve a public offering of securities. The Initial
Purchaser then offered for resale the Notes to qualified institutional buyers
pursuant to the exemption from registration provided by Rule 144A under the
Securities Act. The Company relied on these exemptions from registration based
in part on representations made by the Initial Purchaser.
Additional information is provided in Item 2.03 and is incorporated herein by
reference to this Item 3.02.
Item 9.01 Financial Statements and Exhibits.
4.1* Indenture dated as of June 9, 2014 between JAKKS Pacific, Inc. and Wells
Fargo Bank, National Association
4.2* Form of 4.875% Senior Convertible Note Due 2020
10.1* Purchase Agreement dated June 3, 2014 between JAKKS Pacific, Inc. and
Merrill Lynch, Pierce,
Fenner & Smith Incorporated
* Incorporated by reference from a Current Report on Form 8-K filed by the registrant
on June 9, 2014