outstanding shares of common stock. In addition, following certain corporate events that occur prior to the maturity date, the Company will increase the conversion rate for a holder who elects to convert its New 2024 Notes in connection with such corporate event in certain circumstances by a specified number of shares of common stock as described in the Indenture.
The Company will not have the right to redeem the New 2024 Notes at its option prior to their maturity. If the Company undergoes a fundamental change prior to the maturity date of the New 2024 Notes, holders of the New 2024 Notes may require the Company to repurchase for cash all or part of their New 2024 Notes at a repurchase price equal to 100% of the principal amount of the New 2024 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Indenture will provide for customary terms and covenants, including that upon certain events of default, either the trustee or the holders of not less than 25% in aggregate principal amount of the New 2024 Notes then outstanding may declare the unpaid principal amount of the New 2024 Notes and accrued and unpaid interest, if any, thereon immediately due and payable. In the case of certain events of bankruptcy, insolvency or reorganization, the principal amount of the New 2024 Notes together with accrued and unpaid interest, if any, thereon will automatically become and be immediately due and payable.
The Company intends to use the net proceeds from the sale of the New 2024 Notes for general corporate purposes, including repayment, repurchase or refinance of its debt obligations, sales and marketing expenses associated with Rubraca® (rucaparib), funding of its development programs, payment of milestones pursuant to its license agreements, general and administrative expenses, acquisition or licensing of additional product candidates or businesses and working capital.
The settlement of the New 2024 Notes is expected to occur on or about November 17, 2020, subject to the satisfaction of customary closing conditions.
The issuance of the Exchanged Shares, the New 2024 Notes issuable in the transaction and any shares of common stock issuable upon conversion of such New 2024 Notes have not been registered under the Securities Act, or any state securities law, and, unless so registered, the New 2024 Notes and any such shares may not be offered or sold in the United States except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Company has agreed to file a registration statement for the resale of the shares of common stock issuable upon the conversion of the New 2024 Notes purchased by the holder.
The description of the Exchange and Purchase Agreement is qualified in its entirety by reference to the form of Exchange and Purchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. The descriptions of the Indenture and the New 2024 Notes are qualified in their entirety by reference to the form of Indenture and form of Global Note, which are filed as Exhibit 4.1 and 4.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference. The Indenture and New 2024 Notes are expected to be entered into November 17, 2020, the settlement date for sale of the New 2024 Notes.
The Exchange and Purchase Agreement has been included as an exhibit hereto to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the Exchange and Purchase Agreement were made by the parties thereto only for purposes of that agreement and as of specific dates; were solely for the benefit of the parties to the Exchange and Purchase Agreement; may be subject to limitations agreed upon by the contracting parties; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Exchange and Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The New 2024 Notes will be offered pursuant to the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
The Exchanged Shares will be issued pursuant to the exemption provided by Section 3(a)(9) of the Securities Act.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
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