Exelixis amends purchase agreement to allow issuance of convertibles

By Angela McDaniels

Tacoma, Wash., Aug. 6 - Exelixis, Inc. amended its note purchase agreement with Deerfield Private Design Fund, LP and Deerfield Private Design International, LP on Monday to allow it to issue convertible senior subordinated notes, according to an 8-K filing with the Securities and Exchange Commission.

Under the note purchase agreement, the company sold $124 million principal amount of secured convertible notes due June 2015 to Deerfield for $80 million. The sale settled on July 2, 2010.

The amendment would become effective if the company sells at least $150 million of convertibles prior to Sept. 14 and pays a $1.5 million consent fee to Deerfield.

Under the amendment

• The company would have to place in escrow enough of the new convertibles' proceeds to cover the first six semiannual interest payments;

• The optional prepayment amount for any prepayment of the old convertibles on or prior to July 2, 2013 would be determined as if that prepayment occurred as of July 3, 2013;

• The company could not exercise its right to pay any optional prepayment amount in stock prior to July 3, 2013; and

• The security agreement between the company and Deerfield would be amended to exclude any escrowed proceeds of the new convertibles from the collateral pledged to Deerfield.

Exelixis is a South San Francisco, Calif.-based pharmaceutical company.

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