Entry into a Material Definitive


 


Indenture and


Convertible Senior Secured Notes due 2026


 


On August

17

,
2021, Intercept Pharmaceuticals, Inc. (the “Company”) i

ssued $500.0 million aggregate principal amount of its
3.50% Convertible Senior Secured Notes due 2026 (the “New Notes”), pursuant to an indenture, dated as of August 17, 2021 (the
“Base Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented
by a supplemental indenture, dated as of August 17, 2021 (the “Supplemental Indenture” and, together with the Base Indenture,
the “Indenture”), between the Company and U.S. Bank National Association, as trustee and as collateral agent (in such capacity,
the “Collateral Agent”), consisting of (i) New Notes issued in exchange for approximately $306.5 million aggregate principal
amount of the Company’s outstanding

3.25% Convertible Senior Notes due 2023

(the “2023
Notes”) and (ii) New Notes issued in exchange for approximately $114.7 million aggregate principal amount of the Company’s
outstanding

2.00% Convertible Senior Notes due 2026 (the “2026 Notes”), in each case

pursuant to privately-negotiated agreements (the “Exchange Agreements”) with a limited number of existing holders of
the 2023 Notes and the 2026 Notes who are both “institutional accredited investors” (within the meaning of Rule 501(a)(1),
(2), (3) or (7) promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) and “qualified
institutional buyers” (as defined in Rule 144A under the Securities Act) (such existing holders, the “Exchange Participants”
and such exchange transactions, the “Exchange”) and (iii) approximately $117.6 million aggregate principal amount
of New Notes issued for cash (the “Subscription” and, together with the Exchange, the “Transactions”) pursuant
to privately-negotiated agreements (the “Subscription Agreements” and, together with the Exchange Agreements, the “Agreements”)
with certain qualified investors who are both institutional accredited investors and qualified institutional buyers (the “Purchasers”).


 


Separately, the Company purchased an aggregate of approximately 4.5 million
shares of its common stock (the “Repurchases”) in privately negotiated transactions at a price per share of $16.75, equal
to the closing price of the Company’s common stock on August 10, 2021, in order to facilitate the Transactions. These Repurchases
could prevent a decrease in the market price of the Company’s common stock or the New Notes.


 


The following is a brief description of the terms of the Notes and
the Indenture.

The description of the Indenture is qualified in its entirety by reference to the
full and complete terms of the Base Indenture and Supplemental Indenture, which are attached hereto as Exhibit 4.1 and Exhibit 4.2, respectively,
each of which is incorporated herein by reference.


 


The New Notes are senior, secured obligations of the Company, accrue
interest payable semi-annually in arrears and will mature on February 15, 2026, unless earlier converted, redeemed or repurchased. The
initial conversion rate is 47.7612 shares of the Company’s common stock per $1,000 principal amount of New Notes (equivalent to
an initial conversion price of approximately $20.94 per share), subject to customary adjustments.


 


The New Notes will be convertible into cash, shares of the Company’s
common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. Prior to the close
of business on the business day immediately preceding November 15, 2025, the New Notes will be convertible at the option of holders only
upon the satisfaction of certain conditions and during certain periods, including if the last reported sale price of the Company’s
common stock exceeds 130% of the conversion price for certain specified periods (the “Stock Price Conversion Condition”).
Thereafter, holders of the New Notes may convert their New Notes at their option at any time until the close of business on the business
day immediately preceding the maturity date.


 


The Company may redeem for cash all or any portion of the New Notes,
at its option, on or after February 20, 2024 if the last reported sale price of the Company’s 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
the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the New Notes to be redeemed,
plus accrued and unpaid interest, if any, to, but excluding, the redemption date.


 




 


 



 


If (1) the Company elects to redeem all or a portion of the New
Notes (2) upon the occurrence of certain corporate events or (3) if the Stock Price Conversion Condition is satisfied with respect
to any calendar quarter after the calendar quarter ending September 30, 2022, the Company will, under certain circumstances,
increase the conversion rate for holders who elect to convert New Notes (1) during the related redemption period, (2) in connection
with such corporate event or (3) in connection with such Stock Price Conversion Condition. If the Company undergoes a
“fundamental change,” holders of the New Notes may require the Company to repurchase for cash all or any portion of
their New Notes at a fundamental change repurchase price equal to 100% of the principal amount of the New Notes to be repurchased,
plus accrued and unpaid interest if any, to, but excluding, the fundamental change repurchase date.


 


The Indenture contains customary terms and covenants, including that
upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal
amount of the New Notes then outstanding may declare the entire principal amount of all the New Notes, and the interest accrued on such
New Notes, if any, to be immediately due and payable. Upon events of default involving specified bankruptcy events involving the Company,
the New Notes will be due and payable immediately.


 


The New Notes will be guaranteed by certain subsidiaries of the Company
which meet certain threshold requirements (any such subsidiary, a “Guarantor”), and will be senior obligations of the Company
and any such Guarantor.


 


Security Agreement


 


On August 17, 2021, the Company, the Guarantors that may from time
to time be a party thereto and the Collateral Agent entered into a Security Agreement relating to the New Notes (the “Security Agreement”).


 


Pursuant to the Security Agreement, the New Notes will be secured by
a first priority security interest in substantially all of the assets of the Company and any Guarantors, subject to certain exceptions.


 


The description of the Security Agreement is qualified in its entirety
by reference to the full and complete terms of the Security Agreement which is attached hereto as Exhibit 10.1 and is incorporated herein
by reference.


 


Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant.


 


The information set forth in Item 1.01 is incorporated by reference
into this Item 2.03. 


 


Item 3.02. Unregistered Sales of Equity Securities.


 


The New Notes were issued to the Exchange
Participants in the Exchange and the Purchasers in the Subscription in private placements in reliance on the exemption from registration
provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration based in part on representations
made by the Exchange Participants and the Purchasers in the Agreements. The information set forth in Item 1.01 above is incorporated by
reference into this Item 3.02.


 


As of August 20, 2021, the Company
agreed with its financial advisor, J. Wood Capital Advisors LLC, to settle its financial advisory fee for services provided in
connection with the Transactions through the sale of 769,823 shares of its common stock, par value $0.001 per share, equivalent to
$10 million at the price of $12.99, the closing price per share of the Company’s common stock on August 20, 2021. These
unregistered securities are being sold in a private placement in reliance on the exemption from registration provided by Section
4(a)(2) of the Securities Act. The Company is relying on this exemption from registration based in part on representations made by
the financial advisor in its engagement letter.


 




 


 



 


Item 9.01. Financial Statements and Exhibits.


 


(d) 

Exhibits

.


 




Exhibit


Number


 


Description



4.1


 


Indenture, dated as of August 17, 2021, between

Intercept Pharmaceuticals, Inc.

and U.S. Bank National Association, as trustee



4.2


 


First Supplemental Indenture, dated as of August 17, 2021, between

Intercept Pharmaceuticals, Inc.

and U.S. Bank National Association, as trustee and as collateral agent



4.3


 


Form of 3.50% Convertible Senior Note due 2026 (included in Exhibit 4.2)



10.1


 


Security Agreement, dated as of August 17, 2021, among

Intercept Pharmaceuticals, Inc.

, the Guarantors that may from time to time be a party thereto and U.S. Bank National Association, as collateral agent



104


 


Cover Page Interactive Data File (embedded as Inline XBRL document)



 




 


 



 


SIGNATURES


 


Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 




 


INTERCEPT PHARMACEUTICALS,
INC.



 


 



 


 



 


By:

 


/s/
Rocco Venezia



 


 

 


Name:

 


Rocco Venezia



 


 

 


Title:

 


Chief Accounting
Officer & Treasurer



 


Date: August 23, 2021


 




 


 



 


EXHIBIT INDEX


 




Exhibit


Number


 


Description



4.1


 


Indenture, dated as of August 17, 2021, between

Intercept Pharmaceuticals, Inc.

and U.S. Bank National Association, as trustee



4.2


 


First Supplemental Indenture, dated as of August 17, 2021, between

Intercept Pharmaceuticals, Inc.

and U.S. Bank National Association, as trustee and as collateral agent



4.3


 


Form of 3.50% Convertible Senior Note due 2026 (included in Exhibit 4.2)



10.1


 


Security Agreement, dated as of August 17, 2021, among

Intercept Pharmaceuticals, Inc.

, the Guarantors that may from time to time be a party thereto and U.S. Bank National Association, as collateral agent



104


 


Cover Page Interactive Data File (embedded as Inline XBRL document)



 




 



 






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Other recent filings from the company include the following:

Intercept Pharmaceuticals's Chief Qual. Officer & SVP Ops. just disposed of 2,455 shares - Jan. 13, 2022
Departure of Directors or Certain - Jan. 10, 2022
Intercept Pharmaceuticals's President & CEO just disposed of 5,941 shares - Jan. 4, 2022
Statement of changes in beneficial ownership of securities - Jan. 4, 2022
SVP of Intercept Pharmaceuticals just disposed of 2,455 shares - Jan. 4, 2022

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