EXPLANATORY NOTE
On August 13, 2020, Wix.com Ltd. (the Company) closed the previously announced offering of $575,000,000 principal amount of
0% Convertible Senior Notes due 2025 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the Securities Act), including $75,000,000 of notes pursuant to the full
exercise of the Initial Purchasers (as defined below) over-allotment option.
PURCHASE AGREEMENT
On August 10, 2020, the Company entered into a purchase agreement (the Purchase Agreement) with certain financial
institutions (collectively the Initial Purchasers), pursuant to which the Company agreed to sell $500,000,000 aggregate principal amount of its 0% convertible senior notes due 2025 (the Initial Convertible Notes) in a private
placement pursuant to Rule 144A under the Securities Act. The Company also agreed to grant an option to the Initial Purchasers to purchase, during the 13-day period beginning on, and including, the first date on which the Convertible Notes are
issued, all or part of an additional $75,000,000 aggregate principal amount of its 0% convertible senior notes due 2025 (the Additional Convertible Notes) solely to cover over-allotments. The Initial Convertible Notes, together with the
Additional Convertible Notes, are referred to herein as the Convertible Notes.
The Purchase Agreement includes customary
representations, warranties and covenants. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities and contribute to payments which the Initial Purchasers may be required to
make in respect of any such liabilities.
INDENTURE
The sale of the Convertible Notes closed on August 13, 2020. The Convertible Notes were issued pursuant to an indenture, dated
August 13, 2020 (the Indenture), between the Company and U.S. Bank National Association, as trustee.
The Convertible
Notes are convertible based upon an initial conversion rate of 2.4813 of the Companys ordinary shares, par value NIS 0.01 per share (the ordinary shares) per $1,000 principal amount of Convertible Notes (equivalent to a conversion
price of approximately $403.01 per ordinary share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events, but will not be adjusted for accrued and unpaid special interest (as defined in the Indenture), if
any. In addition, in connection with a make-whole fundamental change (as defined in the Indenture), or following the Companys delivery of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a
holder who elects to convert its notes in connection with such a corporate event or to convert its Convertible Notes called for redemption in connection with such notice of redemption, as the case may be.
The Convertible Notes will mature on August 15, 2025, unless earlier repurchased, redeemed or converted. Prior to the close of business
on the business day immediately preceding February 15, 2025, a holder may convert all or a portion of its Convertible Notes only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter
ending on December 31, 2020 (and only during such calendar quarter), if the last reported sale price of the Companys ordinary shares 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 immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any 10
consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale
price of the ordinary shares and the conversion rate on each such trading day; (3) if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding
the related redemption date; or (4) upon the occurrence of specified corporate events. On or after February 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may
convert their Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, ordinary shares or a combination of cash and ordinary shares, at the Companys
election.
2