TOPGOLF CALLAWAY BRANDS CORP. Item 1.01 Entry into a Material Definitive Agreement.
Indenture and Notes
On
The notes were offered in a private placement to qualified institutional buyers
pursuant to Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). The offer and sale of the notes and any shares of the
Company's common stock issuable upon conversion thereof have not been registered
under the Securities Act or any applicable state securities laws, and the notes
and any such shares may not be offered or sold in
The notes were issued pursuant to, and are governed by, an Indenture, dated as
of
The notes bear interest at a rate of 2.75% 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 existing and future senior, unsecured indebtedness, senior in right of payment to the Company's existing and future indebtedness that is expressly subordinated to the notes and effectively subordinated to the Company's existing and future senior secured indebtedness, to the extent of the value of the collateral securing that indebtedness, including the Company's senior secured asset-based revolving credit facility and Term Loan B facility. The notes will be structurally subordinated to all existing and future 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 only 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 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 10
consecutive trading day period (such 10 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, February 1, 2026 until the close of
business on the second scheduled trading day immediately before the
maturity date.
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The initial conversion rate for the notes is 56.7698 shares of the Company's
common stock per
Upon the occurrence of a "Make-Whole Fundamental Change" (as defined in the Indenture), the Company will in certain circumstances increase the conversion rate for a specified period of time.
In addition, upon the occurrence of a "Fundamental Change" (as defined in the Indenture), holders of the notes may require the Company to repurchase their notes at a cash repurchase price equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
The events of default, as set forth in the Indenture, include (i) default by the Company in the payment when due (whether at maturity, upon redemption or repurchase upon fundamental change or otherwise) of the principal of, or the redemption price or fundamental change repurchase price for, any note, (ii) default by the Company for 30 consecutive days in the payment when due of interest on any note, (iii) failure by the Company to deliver, when required by the Indenture, (x) a fundamental change notice, (y) a notice of a make-whole fundamental change or (z) a notice of certain corporate events as provided in the Indenture, if, only in the case of clause (x) or clause (y), such failure is not cured within five business days after its occurrence, (iv) default by the Company in its obligations to convert a note in accordance with the Indenture upon the exercise of the conversion right with respect thereto, if such default is not cured within three business days after its occurrence, (v) default by the Company in its obligations under the Indenture in respect of certain consolidation, merger and asset sale transactions, (vi) default by the Company in any of its other obligations or agreements under the Indenture or the notes (other than a default set forth in clauses (i), (ii), (iii), (iv) or (v) above) where such default is not cured or waived within 60 days after notice is given in accordance with the Indenture, (vii) certain defaults by the Company or any . . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet.
The disclosure set forth under the heading "Indenture and Notes" in Item 1.01 of this Current Report is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
The disclosure set forth under the heading "Indenture and Notes" in Item 1.01 of
this Current Report is incorporated by reference into this Item 3.02. The notes
were issued to the Initial Purchasers in reliance upon Section 4(a)(2) of the
Securities Act in transactions not involving any public offering. The notes were
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. Initially, a maximum of 19,095,931 shares
of the Company's common stock may be issued upon conversion of the notes, based
on the initial maximum conversion rate of 73.8007 shares of common stock per
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 4.1 Indenture, dated as ofMay 4, 2020 , betweenCallaway Golf Company andWilmington Trust, National Association 4.2 Form of 2.75% Convertible Senior Notes dueMay 1, 2026 (included as Exhibit A to Exhibit 4.1) 10.1 Confirmation of Base Capped Call Transaction, datedApril 29, 2020 , betweenCallaway Golf Company andGoldman Sachs & Co. LLC 10.2 Confirmation of Base Capped Call Transaction, datedApril 29, 2020 , betweenCallaway Golf Company andBank of America, N.A . 10.3 Confirmation of Base Capped Call Transaction, datedApril 29, 2020 , betweenCallaway Golf Company andMorgan Stanley & Co. LLC 10.4 Confirmation of Additional Capped Call Transaction, datedApril 30, 2020 , betweenCallaway Golf Company andGoldman Sachs & Co. LLC 10.5 Confirmation of Additional Capped Call Transaction, datedApril 30, 2020 , betweenCallaway Golf Company andBank of America, N.A . 10.6 Confirmation of Additional Capped Call Transaction, datedApril 30, 2020 , betweenCallaway Golf Company andMorgan Stanley & Co. LLC 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
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