Item 1.01. Entry into a Material Definitive Agreement.
Indenture and Notes
As previously disclosed, on
The proceeds from the offering of the Notes were approximately
The Notes were, and any additional Notes will be, issued pursuant to, and are
and will be governed by, an indenture, dated as of the Closing Date
(the "Indenture"), between the Company and
The Notes bear interest at a rate of 4.50% per annum on the principal amount
thereof, payable semi-annually in arrears on
The Notes are the senior, unsecured obligations of the Company and are equal in right of payment with the Company's senior unsecured indebtedness, senior in right of payment to the Company's indebtedness that is expressly subordinated to the Notes, effectively subordinated to the Company's senior secured indebtedness, to the extent of the value of the collateral securing that indebtedness, and structurally subordinated to all indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company's subsidiaries.
Holders may convert their Notes at their option in the following circumstances:
• at any time from, and afterJanuary 11, 2023 until the close of business on the second scheduled trading day immediately before the maturity date; • upon the occurrence of certain corporate events or distributions on the Company's common stock, par value$0.001 per share ("Common Stock") as provided in the Indenture; • if the Company calls such Notes for redemption; subject to the right of certain Purchasers to elect a delayed conversion period for any such Notes called for redemption that would cause such Purchaser to beneficially own shares of Common Stock, in excess of the Ownership Cap (as defined below), over which threshold a settlement of such conversion would be made in cash rather than the Purchaser would otherwise receive cash rather than shares; and • upon the occurrence of a default with regard to the Company's financial covenants under the Indenture.
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The initial conversion rate for the Notes will be 111.1111 shares of Common
Stock per
In addition, upon the occurrence of a "Fundamental Change" (as defined in the Indenture), holders of the Notes may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any.
The Notes will be redeemable, in whole or in part, at the Company's option at
any time, and from time to time, and subject to limited exceptions with respect
to Notes that cannot be immediately physically settled due to the Ownership Cap,
on or after
The events of default, as set forth in the Indenture, include (i) default by the Company in the payment when due (whether at maturity, upon redemption or repurchase upon fundamental change or otherwise) of the principal of, or the redemption price or fundamental change repurchase price for, any Notes, (ii) default by the Company for 30 consecutive days in the payment when due of interest on any Note, (iii) failure by the Company to deliver, when required by the Indenture, (x) a fundamental change notice, (y) a notice of a Make-Whole Fundamental Change or (z) a notice of certain corporate events as provided in the Indenture, if such failure is not cured within five business days after its occurrence, (iv) default by the Company in its obligations to convert a Note in accordance with the Indenture upon the exercise of the conversion right with . . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of
The disclosure set forth in Item 1.01 of this Current Report is incorporated by reference into this Item 3.02.
The Notes were, and any additional Notes will be, issued to the Purchasers in reliance upon Section 4(a)(2) of the Securities Act in transactions not involving any public offering. Any Common Stock that may be issued upon conversion of the Notes will be issued in reliance upon Section 3(a)(9) of the Securities Act as involving an exchange by the Company exclusively with its security holders.
The offer and sale of the Notes and any shares of Common Stock issuable upon conversion thereof have not been, and the resale of the Notes will not be, registered under the Securities Act or any applicable state securities laws, and the Notes and any such shares may not be offered or sold except pursuant to an effective registration statement or exemption from the registration requirements of the Securities Act and any applicable state securities laws.
This report on Form 8-K is neither an offer to sell nor a solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit Number Exhibit Description 4.1 Indenture, dated as ofJanuary 11, 2023 , between2U, Inc. andWilmington Trust, National Association . 4.2 Form of 4.50% Senior Unsecured Convertible Notes due 2030 (included as Exhibit A to Exhibit 4.1). 104 Cover Page Interactive Data File (formatted as Inline XBRL).
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