The following events are considered “events of default” with respect to the Notes,
which may result in the acceleration of the maturity of the Notes:
(1) the Company defaults in any payment of interest on any Note when
due and payable and the default continues for a period of 30 days;
(2) the Company defaults in the payment of principal of any Note when
due and payable at its stated maturity, upon redemption, upon any required repurchase, upon declaration of acceleration or otherwise;
(3)
failure by the Company to comply with its obligation to convert the Notes in accordance with the Indenture upon exercise of a holder’s conversion right, and such failure continues for five business days;
(4) failure by the Company to give a fundamental change notice or notice of a specified corporate transaction in accordance with the provisions
of the Indenture when due with respect to the Notes, and such failure continues for two business days;
(5) failure by the Company to
comply with any of its obligations under the Indenture with respect to consolidation, merger, sale, conveyance, transfer and lease of assets of the Company;
(6) failure by the Company for 60 days after written notice from the Trustee or the holders of at least 25% in aggregate principal amount of
the Notes then outstanding has been received to comply with any of its other agreements contained in the Notes or the Indenture;
(7)
default by the Company or any significant subsidiary (as defined in the Indenture) 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 $25.0 million (or its foreign currency equivalent) in the aggregate of the Company and/or such significant subsidiary, whether such indebtedness now exists or is hereafter created (i) resulting in such
indebtedness becoming or being declared due and payable prior to its stated maturity or (ii) constituting a failure to pay the principal of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration of
acceleration or otherwise, in each case, after the expiration of any applicable grace period, if such acceleration shall not have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness
shall not have been paid or discharged, as the case may be, within 30 days after written notice to the Company by the Trustee or to the Company and the Trustee by holders of at least 25% in aggregate principal amount of Notes then outstanding in
accordance with the Indenture; and
(8) certain events of bankruptcy, insolvency or reorganization of the Company or any significant
subsidiary.
If such an event of default, other than an event of default described in clause (8) above with respect to the Company,
occurs and is continuing, the Trustee by notice to the Company, or the holders of at least 25% in aggregate principal amount of the outstanding Notes by notice to the Company and the Trustee, may declare 100% of the principal of and accrued and
unpaid interest, if any, on all the Notes then outstanding to be due and payable. If an event of default described in clause (8) above with respect to the Company occurs, 100% of the principal of and accrued and unpaid interest on the Notes
then outstanding will automatically become due and payable.
A copy of the Indenture (including the form of the Note) is attached as an
exhibit to this Current Report on Form 8-K and is incorporated herein by reference (and this description is qualified in its entirety by reference to such document).
The net proceeds from this offering were approximately $72.6 million, after deducting the Initial Purchasers’ discounts and
commissions and the Company’s estimated offering expenses related to the offering. The Company used approximately $8.8 million of the net proceeds from the offering to pay the cost of the Capped Call Transactions (as defined below). The
Company used approximately $24.0 million of the net proceeds from the offering to repay in full the Company’s existing credit facility with Silicon Valley Bank, whereupon the credit facility terminated pursuant to its terms. If the Initial
Purchasers exercise their option to purchase Additional Notes, the Company expects to use a portion of the net proceeds from the sale of such Additional Notes to enter into additional Capped Call Transactions with the Option Counterparties (as
defined below). The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes.
Capped Call
Transactions
On December 11, 2019, in connection with the pricing of the Notes, the Company entered into privately negotiated
capped call transactions (the “Capped Call Transactions”) with JPMorgan Chase Bank, National Association, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC (the “Option Counterparties”). The Capped Call
Transactions have an initial strike price of $34.5525 per share, subject to adjustments, which corresponds to the approximate initial conversion price of the Notes. The Capped Call Transactions will cover, subject to anti-dilution adjustments, the
number of shares of Common Stock