On February 17, 2017, the Company entered into separate privately
negotiated exchange agreements with certain holders of its 2.75% Convertible Senior Notes due 2020 (the Old Notes) to exchange, in a private placement in reliance on Section 4(a)(2) and Regulation D of the Securities
Act, approximately $49.6 million in aggregate principal amount of Old Notes (the Exchange Transactions) for an equal principal amount of the Companys 2.75% Convertible Exchange Senior Notes due 2020 (the
New Notes).
The Company anticipates that the closings of the Exchange Transactions will occur on or about
February 23, 2017.
Following the closings of the Exchange Transactions, approximately $30.4 million in aggregate principal
amount of Old Notes will remain outstanding.
The New Notes will be the Companys senior, unsecured obligations and will rank senior
in right of payment to any of the Companys indebtedness that is expressly subordinated in right of payment to the New Notes; equal in right of payment to any of the Companys unsecured indebtedness that is not so subordinated, including
the Old Notes; effectively junior in right of payment to any of the Companys secured indebtedness (including the Companys existing 0% Convertible Senior Secured Notes due 2020 (the Secured Notes)) to the extent of the value
of the assets securing such indebtedness; and will be structurally junior to all indebtedness and other liabilities (including trade payables) of the Companys subsidiaries.
The New Notes bear interest at a fixed rate of 2.75% per year, payable semiannually in arrears on June 1 and December 1 of each
year, beginning June 1, 2017. Interest on the New Notes accrues from December 1, 2016. The New Notes will mature on December 1, 2020, unless earlier repurchased, redeemed or converted.
The New Notes are convertible at any time prior to the close of business on the business day immediately preceding the maturity date, at the
option of the holders, into (i) shares of the Companys common stock (the Common Stock), plus (ii) a cash payment equal to $150 for each $1,000 principal amount of New Notes converted (the Additional Conversion
Payment), subject to certain adjustments. For conversions prior to September 1, 2018 and the Companys election to exercise its Mandatory Conversion Right (as hereinafter defined), the Company will make an interest make-whole payment
to a converting holder for each $1,000 principal amount of New Notes being converted (the Interest Make-Whole Payment). The Company may pay any Interest Make-Whole Payment either in cash or in shares of Common Stock, at the
Companys election. If the Company elects to pay any Interest Make-Whole Payment in cash it will pay cash in an amount equal to the Interest Make-Whole Payment. If Company elects, or is deemed to have elected, to pay any Interest Make-Whole
Payment by delivering shares of Common Stock, the number of shares of Common Stock a converting holder of New Notes will receive for each $1,000 principal amount of New Notes will be the number of shares equal to the amount of the Interest
Make-Whole Payment to be paid to such holder, divided by the product of (x) 98% and (y) the simple average of the daily volume-weighted average price of the Common Stock for the five trading days ending on and including the trading day
immediately preceding the conversion date. Subject to compliance with certain conditions, the Company has the right (the Mandatory Conversion Right) to, at its option, mandatorily convert all of the New Notes if the daily volume-weighted
average price of the Common Stock is equal to or greater than 60.0% of the applicable conversion price of the New Notes for at least 20 Daily VWAP Trading Days (as defined in the indenture governing the New Notes) (whether or not consecutive) during
any 30 consecutive Daily VWAP Trading Day period (including the last trading day of such period).
The conversion rate is initially
approximately 66.6667 shares of Common Stock per $1,000 principal amount of New Notes (equivalent to an initial conversion price of $15.00 per share of Common Stock), and will be subject to adjustment upon the occurrence of certain events.
The Company may redeem for cash all or any portion of the New Notes, at its option, on or after December 1, 2019 at a redemption price
equal to 100% of the principal amount of the New Notes to be redeemed, plus accrued and
unpaid interest to, but excluding, the redemption date. Upon a fundamental change (as defined in the indenture governing the New Notes), subject to certain exceptions, the holders of the New
Notes may require that the Company repurchase some or all of their New Notes for cash at a repurchase price equal to 100% of the principal amount of the New Notes being repurchased, plus any accrued and unpaid interest to, but excluding, the
fundamental change repurchase date.
The events of default, which may result in the acceleration of the maturity of the New Notes,
include, among other things:
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the Companys failure to pay any interest on the New Notes when due and such failure continues for a period of 30 days past the applicable due date;
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the Companys failure to pay principal amount of the New Notes when due and payable at maturity, upon declaration of acceleration, upon any fundamental change purchase date, upon any redemption date or otherwise;
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the Companys failure to deliver the consideration due upon the conversion of any New Notes (including the Additional Conversion Payment and the Interest Make-Whole Payment, if applicable) and such failure
continues for five business days;
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the Companys failure to give a fundamental change notice when due and such failure continues for a period of five days;
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the Companys failure to comply with the Companys obligations set forth in the indenture governing the New Notes relating to certain consolidations, mergers and sales of assets;
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the Companys failure to perform or observe any of the Companys other covenants or warranties in the indenture governing the New Notes or in the New Notes for 60 days after written notice to the Company from
the trustee or to the Company and the trustee from the holders of at least 25% of the aggregate principal amount of then outstanding New Notes has been received by the Company;
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default by the Company or any of the Companys significant subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or
evidenced, any indebtedness for money borrowed in excess of $10.0 million in the aggregate of the Company and/or any of the Companys subsidiaries, whether such indebtedness now exists or shall hereafter be created (i) resulting in such
indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration or otherwise, and
such acceleration shall not have been rescinded or annulled or such failure to pay cured within 30 days after written notice has been received by the Company or such subsidiary from the trustee or by the trustee, the Company and such subsidiary by
the holders of at least 25% in principal amount of the New Notes then outstanding;
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a final judgment for the payment of $10.0 million or more (excluding any amounts covered by insurance) rendered against the Company or any of the Companys significant subsidiaries, which judgment is not discharged
or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished; and
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certain events of bankruptcy, insolvency and reorganization of the Company or any of the Companys significant subsidiaries.
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The description of the New Notes above is qualified in its entirety by reference to the text of
the indenture governing the New Notes, the form of which is filed as Exhibit 4.1 hereto.
On February 16, 2017, the Company entered
into a Second Supplemental Indenture (the Second Supplemental Indenture) with U.S. Bank National Association, as trustee (the Trustee) and collateral agent, and certain holders of the Secured Notes. Pursuant to the Second
Supplemental Indenture, the Indenture dated March 21, 2016 (the Original Indenture), providing for the issuance of the Secured Notes, as supplemented by the First Supplemental Indenture, dated December 19, 2016 (the First
Supplemental Indenture and the Original Indenture as supplemented by the First Supplemental Indenture, the Secured Indenture), was amended as follows: (i) the limitations on the Companys ability to incur indebtedness
were amended to permit the issuance of the New Notes; (ii) the limitations on the Companys ability to prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof certain indebtedness of the Company or
its subsidiaries were amended to permit the Additional Conversion Payment, Interest Make-Whole Payment and other cash payments under the New Notes; and (iii) the amendment provisions were amended to require the consent of holders representing
at least 65% of the aggregate principal amount of the Secured Notes then outstanding to amend or waive the limitations in the Secured Indenture to permit the redemption of any New Notes. The Company filed the Original Indenture as an exhibit to its
Current Report on Form 8-K filed on March 15, 2016 and the First Supplemental Indenture as an exhibit to its Current Report on Form 8-K filed on December 19, 2016.
A copy of the Second Supplemental Indenture is filed as an exhibit to this Current Report on Form 8-K and incorporated by reference
herein.
This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor
shall it constitute an offer to sell, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. These securities have not been registered under the Securities Act or any or in a transaction not subject to,
the registration requirements of the Securities Act and applicable state laws.