Warrant Transactions
In addition, concurrently with entering into the Convertible Note Hedge Transactions, on November 9, 2020, the Company separately entered into privately negotiated warrant transactions, whereby the Company sold to the Counterparties warrants expiring in 2026 (the “2026 Warrants”) and warrants expiring in 2027 (the “2027 Warrants” and collectively with the 2026 Warrants, the “Warrants”) to acquire, collectively, subject to anti-dilution adjustments, approximately 3.34 million shares of the Class A Common Stock at an initial strike price of approximately $368.16 per share, in the case of the 2026 Warrants, and approximately $414.18 per share, in the case of the 2027 Warrants, which represents a premium of approximately 100% and 125%, respectively, over the last reported sale price of the Class A Common Stock of $184.08 on November 9, 2020. The Company received aggregate proceeds of approximately $115.3 million from the sale of the Warrants to the Counterparties. The Warrants were sold in private placements to the Counterparties pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act.
If the market price per share of the Class A Common Stock, as measured under the terms of the Warrants, exceeds the strike price of the Warrants, the Warrants could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the Warrants in cash.
The Warrants are separate transactions, entered into by the Company with the Counterparties, and are not part of the terms of the Notes. Holders of the Notes will not have any rights with respect to the Warrants.
The foregoing description of the Warrants is qualified in its entirety by reference to the copies of the forms of confirmation for the 2026 Warrants attached as Exhibit 10.4 and the 2027 Warrants attached as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference.
Second Amendment to Revolving Credit Agreement
The Company entered into the Second Amendment to Revolving Credit Agreement, dated as of November 9, 2020, among the Company, the lenders that are a party thereto, and Goldman Sachs Bank USA, as administrative agent (the “Amendment”). The Amendment amends the Revolving Credit Agreement, dated as of May 1, 2020, among the Company, the lenders that are a party thereto, and Goldman Sachs Bank USA, as administrative agent (as amended, modified, or supplemented, the “Credit Agreement”) to permit the Company to issue additional convertible senior unsecured notes.
The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment attached as Exhibit 10.6 to this Current Report on Form 8-K and is incorporated herein by reference.
Certain of the Initial Purchasers and lenders under the Credit Agreement and their respective affiliates have engaged in, and may in the future engage in, other commercial dealings with the Company or its affiliates in the ordinary course of business, including in connection with the offering of Notes and the Credit Agreement. They have received, or may in the future receive, customary fees and commissions for those transactions.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 is incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information set forth under Item 1.01 is incorporated herein by reference.
On November 9, 2020, the Company issued a press release announcing its intention to offer $500 million aggregate principal amount of 2026 Notes and $500 million aggregate principal amount of 2027 Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
