Item 1.01 Entry into a Material Definitive Agreement.
On June 3, 2014, we entered into a 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"), which amount does not include the Initial Purchaser's 30-day
right to purchase up to an additional $15 million principal amount of the Notes
(the "Purchase Agreement"). On June 3, 2014, we also entered into a Prepaid
Forward Share Repurchase Agreement with an affiliate of the Initial Purchaser
(the "Prepaid Forward Share Repurchase Agreement") providing for us to use $24
million of the funds we received from the Notes to prepay for the repurchase of
our shares of common stock under such agreement. On June 9, 2014, we entered
into an Indenture (the "Indenture") with Wells Fargo Bank, National Association,
as the Trustee for the Notes. The foregoing descriptions of the Purchase
Agreement, Prepaid Forward Share Repurchase Agreement and the Indenture are
qualified in their entirety by reference to the Purchase Agreement and the
Indenture, copies of which are filed as exhibits to this Form 8-K and are
incorporated by reference in this Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On June 9, 2014, we issued $100 million in aggregate principal amount of the
Notes, pursuant to the Indenture. 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 are filed as exhibits to this
Form 8-K and are incorporated by reference in this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities
As discussed above, the Company issued $100 million aggregate principal amount
of the Notes on June 9, 2014. The Initial Purchaser of the Notes received an
aggregate discount of approximately $4.0 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
10.2* Prepaid Forward Share Repurchase Agreement dated June 3, 2014 between
JAKKS Pacific, Inc. and Merrill Lynch International
* Filed herewith