Array BioPharma Inc. (NASDAQ:ARRY) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
As previously announced by Array BioPharma, on November16, 2017, Array BioPharma entered into separate, privately negotiated exchange agreements (“Exchange Agreements”) with a limited number of holders (“Noteholders”) of its outstanding 3.00% Convertible Senior Notes due 2020 (“2020 Notes”), to which the Company agreed to exchange (the “Exchanges”) approximately $107.1 million in aggregate principal amount of 2020 Notes held by the Noteholders for (i)a number of newly issued shares of its common stock (with such number rounded down to the nearest whole share for each holder) to be determined based on the volume-weighted average trading price of its common stock on November17, 2017 (the “Reference Date”) (collectively, the “Exchange Shares”), and (ii)an aggregate of $107.1 million in aggregate principal amount of its newly issued 2.625% Convertible Senior Notes due 2024 (the “2024 Notes”).
Subsequent to that announcement, certain affiliated holders of 2020 Notes (the “Subsequent Noteholders” and together with the Prior Noteholders, the “Noteholders”) inquired about their ability to participate in the exchange of 2020 Notes for the same consideration. As a result of those inquiries and through separate negotiations, Array entered into a separate privately negotiated Exchange Agreement dated November20, 2017 providing for the exchange of an additional $19.0 million in principal amount of 2020 Notes on the same terms as those that apply to the Prior Noteholders. Accordingly, subject to the satisfaction of customary closing conditions, Array will exchange 2020 Notes in the aggregate principal amount of $126.1 million held by the Noteholders for 2024 Notes in an aggregate principal amount of $126.1 million and the Exchange Shares (the “Exchanges”).
In addition, on November17, 2017, the number of Exchange Shares to be issued in the Exchanges was determined as well as the coupon rate on the 2024 Notes. An aggregate of 7,955,560 Exchange Shares will be issued upon completion of the Exchanges based on the volume-weighted average trading price of approximately $11.67 as of the Reference Date. The 2024 Notes will bear interest at the rate of 2.625% per annum. The Company will receive no cash proceeds for the issuance of the Exchange Shares or the 2024 Notes. The principal amount of 2020 Notes to be exchanged for each $1,000 in principal amount of 2024 Notes was determined in individual negotiations between the Company and the Noteholders.
The Company anticipates that the Exchanges will be completed on or about December1, 2017, subject to satisfaction of customary closing conditions. Upon completion of the Exchanges, the aggregate principal amount of the 2020 Notes will be reduced to approximately $6.2 million.
The foregoing description of the Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the form of Exchange Agreement filed as Exhibit10.1 to its Current Report on Form8-K filed by the Company on November17, 2017, which is incorporated by reference herein.
In connection with the issuance of the 2024 Notes, the Company will enter into an Indenture (the “Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee. The Company will file a copy of the Indenture on a Form8-K following the closing of the Exchange.
This Current Report does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.
Item 3.02 Unregistered Sales of Equity Securities
As disclosed in Item 1.01 of this Current Report on Form8-K, on November17, 2017, the Company entered into the Exchange Agreement to which the Company will, subject to the satisfaction of customary closing conditions, issue the 2024 Notes and the Exchange Shares to the Subsequent Noteholders.The 2024 Notes and Exchange Shares were offered, and will be sold, to the exemption provided by Section4(a)(2)of the Securities Act of 1933, as amended (the “Securities Act”).This offer was made by the Company to no more than ten persons, each of which is an accredited investor (within the meaning of Rule501 promulgated under the Securities