Item 1.01 Entry into a Material Definitive Agreement
Indenture and Notes
The Notes were issued pursuant to an Indenture, dated
We may redeem for cash all or any portion of the Notes, at our option, on or
after
The Indenture includes customary terms and covenants, including certain events of default after which the Notes may be due and payable immediately. The following events are considered "events of default," which may result in acceleration of the maturity of the Notes:
(1) default by us in any payment of interest on any Note when due and payable and the default continues for a period of 30 days; (2) default by us in the payment of principal of any Note when due and payable at its stated maturity, on optional redemption, on any required repurchase, on declaration of acceleration, or otherwise; (3) failure by us to comply with our obligation to convert the Notes in accordance with the Indenture on exercise of a holder's conversion right and such failure continues for a period of three business days; (4) failure by us to give a fundamental change notice, notice of a make-whole fundamental change, or notice of a specified distribution or specified corporate event, in each case when due if such failure continues for three business days; (5) failure by us to comply with our obligations under the Indenture with respect to a consolidation, merger, or sale of assets; (6) failure by us for 60 days after written notice has been received from either the Trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of our other agreements contained in the Notes or Indenture; (7) default by us or any of our significant subsidiaries (as defined in the Indenture) with respect to any mortgage, agreement, or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of$150,000,000 (or its foreign
--------------------------------------------------------------------------------
currency equivalent) in the aggregate of us and any such subsidiary (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, on required repurchase, on declaration of acceleration or otherwise, and in the cases of clauses (i) and (ii), such acceleration will not have been rescinded or annulled or such failure to pay or default will not have been cured or waived, or such indebtedness will not have been paid or discharged, as the case may be, within 30 days after written notice to us by the Trustee or us and the Trustee by holders of at least 25% in aggregate principal amount of the Notes then outstanding; or (8) certain events of bankruptcy, insolvency, or reorganization of us or any of our significant subsidiaries.
The Notes are convertible into cash, shares of our Class A common stock, or a
combination thereof, at our election, at an initial conversion rate of 17.7494
shares of Class A common stock per
Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the Indenture) or in connection with a redemption are, under certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change (as defined in the Indenture), holders of the Notes may require us to repurchase all or a portion of their Notes at a price equal to 100% of the principal amount of Notes, plus any accrued and unpaid special interest, if any, to, but excluding, the repurchase date.
Holders of the Notes may convert all or a portion of their Notes at their option
prior to
• during any calendar quarter commencing after the calendar quarter ending onMarch 31, 2022 , if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the preceding calendar quarter is greater than or equal to 130% of the conversion price of the Notes on each applicable trading day; • during the five consecutive business day period immediately following any ten consecutive trading day period in which the trading price per$1,000 principal amount of the Notes for each trading day of that ten consecutive trading day period was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate for the Notes on each such trading day; • if we call such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, in which case we may be required to increase the conversion rate for the Notes so surrendered for conversion in connection with such redemption notice (or at our election, all notes); or
• on the occurrence of specified corporate events.
A copy of the Indenture and form of Global Note are filed as Exhibit 4.1 and Exhibit 4.2, respectively, to this Current Report on Form 8-K and are . . .
Item 2.03 Creation of a Direct Financial Obligation under an Off-Balance Sheet
Arrangement of a Registrant
See Item 1.01 above, which is incorporated by reference.
Item 3.02 Unregistered Sale of
See the explanatory note above and Item 1.01 under the heading "Indenture and Notes," which is incorporated by reference. We sold the Notes to the Initial Purchasers pursuant to the Purchase Agreement in reliance on the exemption from the registration requirements provided by Section 4(a)(2) of the Securities Act, and the Notes were initially resold to qualified institutional buyers as defined in, and in reliance on, Rule 144A of the Securities Act.
The offer and sale of the Notes and our Class A common stock issuable on
conversion of the Notes, if any, have not been and will not be registered under
the Securities Act or the securities laws of any other jurisdiction, and such
securities may not be offered or sold in
--------------------------------------------------------------------------------
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the
meaning of the federal securities laws. These statements include, but are not
limited to, expectations regarding the effect of the Capped Call Transactions
and regarding actions of the Capped Call Counterparties and their respective
affiliates. Forward-looking statements include all statements that are not
historical facts. In some cases, forward-looking statements can be identified by
terms such as "anticipates," "believes," "could," "estimates," "expects,"
"intends," "may," "plans," "potential," "will," or similar expressions and the
negatives of those words. Forward-looking statements involve substantial risks
and uncertainties that may cause actual results to differ materially from those
that we expect. These risks and uncertainties include market risks, trends, and
conditions. These and other risks are more fully described in our filings with
the
Item 9.01 Financial Statements and Exhibits
(d) Exhibits Exhibit Description No. 4.1 Indenture, datedFebruary 11, 2022 , by and betweenSnap Inc. andU.S. Bank Trust Company, National Association , as Trustee. 4.2 Form of Global Note, representingSnap Inc.'s 0.125% Convertible Senior Notes due 2028 (included as Exhibit A to the Indenture filed as Exhibit 4.1). 99.1 Form of Capped Call Confirmation. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
--------------------------------------------------------------------------------
© Edgar Online, source