Item 1.01.
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Entry into a Material Definitive Agreement.
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Purchase Agreement
On December 5, 2019, Twitter, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with J.P. Morgan Securities LLC, as representative of the several initial purchasers listed in Schedule I thereto (the “Initial Purchasers”), relating to the sale by the Company of $700 million aggregate principal amount of its 3.875% Senior Notes due 2027 (the “Notes”), in a private placement to “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States pursuant to Regulation S under the Securities Act (the “Offering”). The Company intends to use the net proceeds from the Offering for general corporate purposes, which may include capital expenditures, investments, repayment of debt, working capital and potential acquisitions and strategic transactions. The Purchase Agreement contains customary representations, warranties and covenants by the Company together with customary closing conditions. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities.
The description of the Purchase Agreement contained in this Current Report on Form 8-K is qualified in its entirety by reference to the complete text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Indenture
On December 9, 2019, the Company entered into an indenture, relating to the issuance of the Notes (the “Indenture”), by and between the Company and U.S. Bank National Association, as trustee (the “Trustee”).
The Notes mature on December 15, 2027 and bear interest at a rate of 3.875% per annum. Interest on the Notes is payable semi-annually in arrears on December 15 and June 15 of each year, commencing on June 15, 2020.
The Company may redeem the Notes, in whole or in part, at any time prior to September 15, 2027 at a price equal to 100% of the principal amount of the Notes plus a “make-whole” premium and accrued and unpaid interest, if any. On and after September 15, 2027, the Company may redeem the Notes at 100% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
If the Company experiences a change of control triggering event (as defined in the Indenture), the Company must offer to repurchase the Notes at a repurchase price equal to 101% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to the applicable repurchase date.
The Indenture contains covenants that, among other things, restrict the ability of the Company and its domestic restricted subsidiaries to:
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create certain liens and enter into sale and lease-back transactions; and
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consolidate or merge with or into, or convey, transfer or lease all or substantially all of the Company and its subsidiaries assets, to another person.
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These covenants are subject to a number of other limitations and exceptions set forth in the Indenture.
The Indenture provides for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving the Company and its significant subsidiaries. In the case of an event of default arising from specified events of bankruptcy or insolvency, all outstanding Notes under the Indenture will become due and payable immediately without further action or notice. If any other event of default under the Indenture occurs or is continuing, the Trustee or holders of at least 25% in aggregate principal amount of the outstanding Notes under the Indenture may declare the principal of the Notes and any accrued and unpaid interest on the Notes to be due and payable immediately.