Page 15 of 23 – SEC Filing
The Notes mature on January
16, 2022 (the “Maturity Date”). Interest on the Notes accrues at a minimum of 6.0% per year for the first year and
two weeks the Notes are outstanding, and at a minimum interest rate of 4.0% per year thereafter (each date, an “Interest
Reset Date”), in each case subject to upward adjustment to up to 12.0% per year, based upon the then-applicable Conversion
Premium (as defined in the Note Agreement) as set out in the Note Agreement. In addition, in the event the Issuer has not filed
with the SEC a Form 10-K containing its audited financial statements for the years ended December 31, 2015, 2016 and 2017 (the
“Form 10-K”) by April 30, 2018 (the “Form 10-K Filing Deadline”), the then-applicable interest rate will
increase by 2.0% until the Issuer becomes current in its filings under the Securities Exchange Act of 1934 (the “Exchange
Act”) and until the next applicable Interest Reset Date, at which time such interest rate increase will no longer remain
in effect.
Interest on the Notes
is payable, at the option of the Issuer, in cash, or, subject to certain conditions, through the issuance by the Issuer of additional
shares of Common Stock (the “PIK Interest Shares”). Any PIK Interest Shares so issued will be valued at the arithmetical
average of the volume-weighted average trading prices of the Common Stock on each trading day during the ten consecutive trading
days ending on the trading day immediately preceding the applicable interest payment date.
The Notes are convertible
into shares of Common Stock at any time prior to the Maturity Date at a price (the “Conversion Price”) equal to a 30.0%
premium to the volume weighted average trading prices of the Common Stock on each trading day during the ten consecutive trading
days commencing on the Closing Date, subject to a Conversion Price floor of $28.00 per share. The Notes are also subject to a 4.99%
blocker providing that the Reporting Persons cannot convert any of the Notes if the Reporting Persons would beneficially own, after
any such conversion, more than 4.99% of the outstanding shares of Common Stock of the Issuer.
Pursuant to the terms
of the Purchase Agreement, the Issuer granted the Notes Option to the Starboard Buyers, which Notes Option is exercisable, in whole
or in part, at any time or times through the date that is five business days after the Company files a registration statement relating
to the Rights Offering. Option Notes may be purchased, at the option of the Starboard Buyers, through the exchange of a combination
of cash and shares of Common Stock owned by the Starboard Buyers, subject to certain limitations, as set out in the Purchase Agreement.
Any Option Notes purchased pursuant to the grant of the Notes Option will have the same terms, including as to maturity, interest
rate, convertibility, and security, as the Notes. In the event the Notes Option is exercised by the Starboard Buyers, but the Issuer
is unable to deliver any Option Notes due to, among other things, judicial or regulatory limitation, the Issuer will be obligated
to deliver to the Starboard Buyers an equivalent amount of value through the issuance of additional warrants to purchase Common
Stock, an increase in the interest rate on the Notes, or a reduction in the Conversion Rate of the Notes, as described in the Purchase
Agreement.
The Notes are (and any
Option Notes will be) guaranteed by certain of the Issuer’s direct and indirect wholly-owned domestic subsidiaries (the “Guarantors”)
and are (and any Option Notes will be) secured by a security interest in substantially all of the assets of the Issuer and the
Guarantors, pursuant to a Guaranty, dated as of the Closing Date, entered into by the Guarantors (the “Guaranty Agreement”),
and a Pledge and Security Agreement, dated as of the Closing Date, among the Issuer, the Guarantors and Starboard Value and Opportunity
Master Fund Ltd. as collateral agent (the “Security Agreement”).
