| Item 1.01 | Entry into a Material Definitive Agreement. |
Issuance and Sale of 4.5% Series A Convertible Preferred Stock
As previously reported on the Current Report on Form 8-K filed on November 19, 2020 by FireEye, Inc., a Delaware corporation (the “Company”), the Company entered into: (i) a Securities Purchase Agreement with Blackstone Delta Holdings DE L.P. (formerly known as BTO Delta Holdings DE L.P.), an investment vehicle of funds affiliated with The Blackstone Group Inc. (“Blackstone”), and (ii) a Securities Purchase Agreement with ClearSky Security Fund I LLC and ClearSky Power & Technology Fund II LLC (collectively, “ClearSky” and together with Blackstone, the “Purchasers”), in connection with the issuance and sale (the “Private Placement”) of an aggregate of 400,000 shares of a newly designated 4.5% Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), at a price of $1,000 per share, for an aggregate purchase price of $400,000,000 (each a “Financing Agreement” and together the “Financing Agreements”).
On December 11, 2020, the Company entered into an Amendment to each of the Financing Agreements with Blackstone and ClearSky, respectively (the “Financing Agreement Amendments”), to change the conversion price for the Series A Preferred Stock set forth in the Certificate of Designations (as defined below) to $17.25 per share, subject to certain customary adjustments in the event of certain adjustments to the Common Stock.
The foregoing summary of the Financing Agreement Amendments does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Financing Agreement Amendments, which are attached hereto as Exhibits 10.1 and 10.2, and are incorporated by reference.
On December 11, 2020, the parties completed the Private Placement (the “Closing Date”).
Certificate of Designations
Each share of Series A Preferred Stock has the powers, designations, preferences, and other rights of the shares of such series as are set forth in the Certificate of Designations of the Series A Preferred Stock filed by the Company with the Secretary of State of the State of Delaware on December 11, 2020 (the “Certificate of Designations”).
The Series A Preferred Stock ranks senior to the Company’s common stock, par value $0.0001 per share (“Common Stock”) with respect to dividend rights and rights upon the voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Company (a “Liquidation”).
Upon a Liquidation, each share of Series A Preferred Stock is entitled to receive an amount per share equal to the greater of (i) the purchase price paid by the Purchaser, plus all accrued and unpaid dividends and (ii) the amount that the holder of Series A Preferred Stock (each, a “Holder” and collectively, the “Holders”) would have been entitled to receive at such time if the Series A Preferred Stock were converted into Common Stock (the “Liquidation Preference”). The initial purchase price of the Series A Preferred Stock is $1,000 per share (the “Original Purchase Price”). The Holders are entitled to dividends on the Original Purchase Price paid by the Purchaser at the rate of 4.5% per annum that (i) for the first three years after the Closing Date will be paid in-kind, and (ii) after the third anniversary of the Closing Date, will, at the Company’s election either be paid in cash, or, if not, will accrue and accumulate, in each case, accruing daily and paid quarterly in arrears. The Holders are also entitled to participate in dividends declared or paid on the Common Stock on an as-converted basis.
Conversion Rights
The Holder has the right, at its option, to convert its Series A Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Common Stock at a conversion price equal to $17.25 per share subject to certain customary adjustments in the event of certain adjustments to the Common Stock. After the third anniversary of the Closing Date, subject to certain conditions, the Company may, at its option, require conversion of all of the outstanding shares of Series A Preferred Stock to Common Stock if, for at least 20 trading days during the 30 consecutive trading days immediately preceding the date the Company notifies the Holders of the election to convert, the closing price of the Common Stock is at least 175% of the conversion price.
Redemption Rights
After the seventh anniversary of the Closing Date, each Holder shall have the right to require the Company to redeem all or any part of the Holder’s Series A Preferred Stock for cash at a price equal to the Original Purchase Price paid by the Purchaser plus any accrued and unpaid dividends. Upon a “Fundamental Change” (involving a change of control, bankruptcy, insolvency, liquidation or de-listing of the Company as further described in the Certificate of Designations), each Holder shall have the right to require the Company to redeem all or any part of the Holder’s Series A Preferred Stock for an amount equal to the Liquidation Preference at a repurchase price calculated in accordance with the Certificate of Designations plus any accrued and unpaid dividends.
