shares of common stock per $1,000 principal amount of 2029 Notes, which represents an initial conversion price of $3.5530 per share of the Company’s common stock. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.
Noteholders who convert their 2029 Notes will also be entitled to an interest make-whole payment of up to 7.50% of the aggregate principal amount of notes converted, subject to reduction as further described in the Indenture. Interest make-whole payments are payable in cash or shares of common stock at the Company’s election, subject to certain limitations including a limitation on the number of shares of common stock deliverable upon conversion of the 2029 Notes to comply with New York Stock Exchange listing standards. Payment of the interest make-whole in shares will be at a price equal to 95% of the average of the daily volume-weighted average price per share of the Company’s common stock over an agreed upon period.
The 2029 Notes will not be redeemable at the Company’s election before December 27, 2025. The 2029 Notes will be redeemable, in whole but not in part (subject to certain limitations) for cash, at the Company’s option at any time, and from time to time, December 27, 2025 and prior to the close of business on November 16, 2029, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, noteholders may require the Company to repurchase their 2029 Notes for cash. The repurchase price will be equal to the principal amount of the 2029 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date, plus any remaining amounts that would be owed to, but excluding, the maturity date.
The Notes are guaranteed by the guarantors and secured on a first-priority basis by substantially all assets of the Company and such guarantors, subject to certain exceptions. The Indenture contains certain specified events of default, the occurrence of which would entitle the holders of the 2029 Notes to demand repayment of all outstanding principal and accrued interest on the Notes, together with a make-whole payment as determined pursuant to the Indenture. Such events of default include, among others, failure to make any payment under the Notes when due, failure to observe or perform certain covenants under the Notes or the other transaction documents related thereto (subject in certain cases to specified cure periods), the failure of the Company to be able to pay debts as they come due, the commencement of bankruptcy or insolvency proceedings against the Company or its significant subsidiary, a material judgment levied against the Company or its significant subsidiary, any event of default in excess of a specified amount by the Company or its significant subsidiary under other indebtedness, failure to perfect certain collateral securing the 2029 Notes and failure of the guarantees to be enforceable.
The Indenture contains a number of restrictive covenants and limitations, including restrictions on the Company’s ability to incur indebtedness or liens, make restricted payments, issue preferred stock or disqualified stock, transact with affiliates, sell material intellectual property, or make investments or dispositions, as further described in the Indenture. The Company will also be required to comply with a minimum liquidity covenant.
Pursuant to the Exchange Agreements, the Company agrees to register the shares of common stock issuable upon conversion of the 2029 Notes and the “Interest Shares” (as defined in the Indenture) under the Securities Act of 1933, as amended (the “Securities Act”).
