The committed equity financing facility (CEFF) allows Jazz Pharmaceuticals to raise capital, at its discretion, to support the company’s commercial, product development and general corporate activities. Under the terms of the agreement, Jazz Pharmaceuticals will determine the exact timing and amount of any CEFF financings, subject to certain conditions.
Under the terms of the CEFF, Jazz Pharmaceuticals has access to up to $75 million from Kingsbridge in exchange for newly-issued shares of Jazz Pharmaceuticals’ common stock. The funds that can be raised under the CEFF will depend on the number of shares actually sold, which may not exceed a total of approximately 4.9 million shares. The company plans to file the registration statement in June 2008.
The CEFF agreement does not restrict Jazz Pharmaceuticals’s operating activities, and does not prohibit Jazz Pharmaceuticals from entering into or completing other debt or equity financings, other than financings similar to the CEFF.
In connection with the CEFF, Jazz Pharmaceuticals issued a warrant to Kingsbridge to purchase 220,000 shares of common stock at an exercise price of $11.20 per share, which represents a 25% premium over the average of the closing prices of Jazz Pharmaceuticals common stock during the five trading days preceding the signing of the CEFF. The warrant will be exercisable beginning on the six-month anniversary of the date of the agreement and will remain exercisable, subject to certain exceptions, for five years.