2U, INC. Item 1.01. Entry into a Material Definitive Agreement.
Indenture and Notes
On
The net proceeds from the offering of the notes will be approximately
The base 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 2.25% 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:
• during any calendar quarter commencing after the calendar quarter ending on
September 30, 2020 (and only during such calendar quarter), if the last
reported sale price per share of the Company's common stock, $0.001 par value
per share ("common stock"), exceeds 130% of the conversion price for each of
at least 20 trading days, whether or not consecutive, during the 30
consecutive trading days ending on, and including, the last trading day of
the immediately preceding calendar quarter;
• during the five consecutive business days immediately after any ten
consecutive trading day period (such ten consecutive trading day period, the
"measurement period") in which the trading price per $1,000 principal amount
of notes for each trading day of the measurement period was less than 98% of
the product of the last reported sale price per share of the Company's common
stock on such trading day and the conversion rate on such trading day;
• upon the occurrence of certain corporate events or distributions on the
Company's common stock, as provided in the Indenture;
• if the Company calls such notes for redemption; and
• at any time from, and including, November 1, 2024 until the close of business
on the second scheduled trading day immediately before the maturity date.
The initial conversion rate for the notes will be 35.3773 shares of the
Company's common stock per
Item 1.02. Termination of a Material Definitive Agreement.
On the Closing Date, the Company used a portion of the proceeds from the sale of
the base notes to repay in full all amounts outstanding under, and discharge all
obligations in respect of, the credit agreement, dated as of
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 under the heading "Indenture and Notes" 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 base notes were, and any additional notes will be, issued to the Initial Purchasers in reliance upon Section 4(a)(2) of the Securities Act in transactions not involving any public offering. The base notes were, and any additional notes will be, resold by the Initial Purchasers to persons whom the Initial Purchasers reasonably believe are "qualified institutional buyers" in accordance with Rule 144A under the Securities Act. Any shares of the Company's 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 Base Capped Call Transactions were, and any Additional Capped Call Transactions will be, entered into by the Company with the Option Counterparties in reliance upon Section 4(a)(2) of the Securities Act in transactions not involving any public offering. The Company relied on this exemption from registration based in part on representations made by the Option Counterparties.
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 ofApril 23, 2020 , between2U, Inc. andWilmington Trust, National Association . 4.2 Form of 2.25% Convertible Senior Notes dueMay 1, 2025 (included as Exhibit A to Exhibit 4.1). 10.1 Base Call Option Confirmation, dated as ofApril 20, 2020 between2U, Inc. andCitibank, N.A . 10.2 Base Call Option Confirmation, dated as ofApril 20, 2020 , between2U, Inc. andMorgan Stanley & Co. LLC . 10.3 Base Call Option Confirmation, dated as ofApril 20, 2020 , between2U, Inc. andCredit Suisse Capital LLC . 104 Cover Page Interactive Data File (formatted as Inline XBRL).
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