MICROSTRATEGY INCORPORATED Item 1.01. Entry into a Material Definitive Agreement.
Indenture and 6.125% Senior Secured Notes due 2028
On
The net proceeds from the sale of the Notes were approximately
The Company intends to use the net proceeds from the sale of the Notes to acquire additional bitcoin.
General
The Notes were issued pursuant to an indenture (the "Indenture"), among the
Company, the Guarantor, and
The Notes will mature on
The Notes will bear interest at a rate of 6.125% per annum. The Company will pay
interest on the Notes semi-annually in arrears on
Guarantees and Security
The Company's obligations under the Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the Guarantor, and certain subsidiaries of the Company that may be formed or acquired on or after the Closing Date (collectively, the "Subsidiary Guarantors").
The Notes and the related guarantees are secured, on a senior secured basis with the Company's existing and future senior indebtedness, by security interests on substantially all of the Company's and the Subsidiary Guarantors assets, including any bitcoins or other digital assets acquired on or after the Closing Date, but excluding the Company's existing bitcoins as well as bitcoins and digital assets acquired with the proceeds from existing bitcoins and bitcoins acquired from proceeds of debt secured by existing bitcoins (the "Collateral"). On the Closing Date, each of the Company, the Subsidiary Guarantors, and the collateral agent entered into a collateral agreement, which created and established the terms of the security interests that secure the Notes and related guarantees.
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Ranking
The Notes and the related guarantees are the general senior secured obligations
of the Company and the Subsidiary Guarantors and rank pari passu in right of
payment with the Company's and the Subsidiary Guarantors' existing and future
senior indebtedness (including the Existing Notes), are senior in right of
payment to all future subordinated indebtedness of the Company and the
Subsidiary Guarantors, and are effectively senior to any existing and future
unsecured indebtedness of the Company and the Subsidiary Guarantors (including
the Existing Notes) to the extent of the value of the Collateral (after giving
effect to the sharing of such Collateral with holders of equal or prior ranking
liens on the Collateral). The Notes and the guarantees are (i) secured on a
first priority basis by liens on the Collateral (subject to Permitted Liens (as
defined in the Indenture) and certain other exceptions) or to the extent there
is outstanding ABL Indebtedness (as defined in the Indenture), secured on a
first priority basis by the Notes Priority Collateral (as defined in the
Indenture) and on a second priority basis by liens on the ABL Priority
Collateral (as defined in the Indenture)(subject to Permitted Liens and certain
other exceptions), and (ii) effectively subordinated to any future ABL
Indebtedness to the extent of the value of the ABL Priority Collateral securing
such indebtedness, are effectively subordinated to any existing and future
indebtedness of the Company or any Subsidiary Guarantor that is secured by liens
on assets that do not constitute a part of the Collateral (including the
Company's existing bitcoins as well as bitcoins and digital assets acquired with
the proceeds from existing bitcoins), and are structurally subordinated to any
existing and future indebtedness and other liabilities (including trade payables
and preferred stock) of
Optional Redemption
At any time and from time to time prior to
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 in Item 1.01 of this Current Report on Form 8-K under the heading "Indenture and 6.125% Senior Secured Notes due 2028" is incorporated herein by reference.
Item 8.01. Other Events.
On the Closing Date, the Company issued a press release announcing the closing of the Notes offering. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
Statements in this Current Report on Form 8-K and the exhibits attached hereto
about future expectations, plans, and prospects, as well as any other statements
regarding matters that are not historical facts, may constitute "forward-looking
statements" within the meaning of The Private Securities Litigation Reform Act
of 1995. These statements include, but are not limited to, statements relating
to the Company's anticipated use of the net proceeds of the offering. The words
"anticipate," "believe," "continue," "could," "estimate," "expect," "intend,"
"may," "plan," "potential," "predict," "project," "should," "target," "will,"
"would," and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these
identifying words. Actual results may differ materially from those indicated by
such forward-looking statements as a result of various important factors,
including the factors discussed in the "Risk Factors" section of the Company's
Quarterly Report on Form 10-Q filed with the
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 4.1 Indenture, dated as ofJune 14, 2021 , by and amongMicroStrategy Incorporated , as issuer,MicroStrategy Services Corporation , as a guarantor, andU.S. Bank National Association , as trustee and notes collateral agent. 4.2 Form of 6.125% Senior Secured Note due 2028 (included within Exhibit 4.1). 99.1 Press Release, datedJune 14, 2021 , announcing the closing of the offering. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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