Item 1.01. Entry into a Material Definitive Agreement.
6.00% Convertible Senior Notes due 2022
On
November 21, 2018, Gogo Inc. (the Company) issued $215 million aggregate principal amount of its 6.00% Convertible Senior Notes due 2022 (the Notes) under an Indenture, dated as of November 21, 2018 (the
Indenture), with U.S. Bank National Association, as trustee. The Notes will bear interest at a rate of 6.00% per year, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15,
2019. The Notes will mature on May 15, 2022, unless earlier repurchased by the Company or converted.
The initial conversion rate of the Notes is
166.6667 shares of common stock per $1,000 principal amount of Notes, which corresponds to an initial conversion price of approximately $6.00 per share and represents a conversion premium of approximately 20.0% over the last reported sale price of
the Companys common stock of $5.00 per share on The NASDAQ Global Select Market on November 16, 2018. The conversion rate is subject to adjustment upon the occurrence of certain specified events, including, but not limited to, the
issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, distributions of capital stock, indebtedness or assets and the payment of cash dividends.
The Notes will be convertible prior to January 15, 2022 only under certain circumstances (as set forth in the Indenture) and thereafter at any time. Upon
conversion, the Notes will be settled at the Companys election in shares of the Companys common stock, cash or a combination of cash and shares of the Companys common stock.
The Company may not redeem the Notes prior to the relevant maturity date and no sinking fund is provided for the Notes, which means the Company is not
required to periodically redeem or retire the Notes. Upon the occurrence of a fundamental change (as defined in the Indenture), holders will, subject to specified conditions, have the right, at their option, to require the Company to repurchase all
or a portion of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.
The Notes are the Companys general unsecured senior obligations and will rank equal in right of payment with all of the Companys existing and
future senior unsecured indebtedness and senior in right of payment to our existing and future subordinated debt. The Notes will effectively rank junior in right of payment to any of the Companys existing and future secured indebtedness to the
extent of the value of the assets securing such indebtedness and are structurally subordinated to all indebtedness and other liabilities of the Companys subsidiaries.
The Indenture provides for customary events of default. In the case of an event of default with respect to the Notes arising from specified events of
bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. If any other event of default with respect to the Notes under the Indenture occurs or is continuing, the Trustee or holders of
at least 25% in aggregate principal amount of the then outstanding Notes may declare the principal amount of the Notes to be immediately due and payable.