Salesforce.com 2016 Annual Report Download - page 109

Warrants
Date
Proceeds
(in thousands) Shares
Strike
Price
0.25% Warrants ....................... March 2013 $84,800 17,308,880 $90.40
In March 2013, the Company also entered into a warrants transaction (the “ 0.25% Warrants”), whereby the
Company sold warrants to acquire, subject to anti-dilution adjustments, shares of the Company’s common stock.
The 0.25% Warrants were anti-dilutive for the periods presented. The 0.25% Warrants are separate transactions
entered into by the Company and are not part of the terms of the 0.25% Senior Notes or the 0.25% Note Hedges.
Holders of the 0.25% Senior Notes and 0.25% Note Hedges will not have any rights with respect to the 0.25%
Warrants.
Term Loan
On July 11, 2013, the Company entered into a credit agreement (the “Prior Credit Agreement”) with Bank
of America, N.A. and certain other lenders. The Prior Credit Agreement provided for a $300.0 million term loan
(the “Term Loan”) maturing on July 11, 2016 (the “Term Loan Maturity Date”), which was entered into in
conjunction with and for purposes of funding the acquisition of ExactTarget in fiscal 2014. The Term Loan bore
interest at the Company’s option at either a base rate plus a spread of 0.50% to 1.00% or an adjusted LIBOR rate
as defined in the Prior Credit Agreement plus a spread of 1.50% to 2.00%.
In October 2014, the Company repaid the Term Loan in full and the Prior Credit Agreement was terminated.
Revolving Credit Facility
In October 2014, the Company entered into an agreement (the “Credit Agreement”) with Wells Fargo, N.A.
and certain other institutional lenders that provides for a $650.0 million unsecured revolving credit facility that
matures on October 6, 2019 (the “Credit Facility”). Immediately upon closing, the Company borrowed $300.0
million under the Credit Facility, approximately $262.5 million of which was used to repay in full the
indebtedness under the Company’s Term Loan, as described above. Borrowings under the Credit Facility bear
interest, at the Company’s option at either a base rate, as defined in the Credit Agreement, plus a margin of
0.00% to 0.75% or LIBOR plus a margin of 1.00% to 1.75%. The Company is obligated to pay ongoing
commitment fees at a rate between 0.125% and 0.25%. Such interest rate margins and commitment fees are
based on the Company’s consolidated leverage ratio for the preceding four fiscal quarter periods. Interest and the
commitment fees are payable in arrears quarterly. The Company may use amounts borrowed under the Credit
Facility for working capital, capital expenditures and other general corporate purposes, including permitted
acquisitions. Subject to certain conditions stated in the Credit Agreement, the Company may borrow amounts
under the Credit Facility at any time during the term of the Credit Agreement. The Company may also prepay
borrowings under the Credit Agreement, in whole or in part, at any time without premium or penalty, subject to
certain conditions, and amounts repaid or prepaid may be reborrowed.
The Credit Agreement contains certain customary affirmative and negative covenants, including a
consolidated leverage ratio covenant, a consolidated interest coverage ratio covenant, a limit on the Company’s
ability to incur additional indebtedness, dispose of assets, make certain acquisition transactions, pay dividends or
distributions, and certain other restrictions on the Company’s activities each defined specifically in the Credit
Agreement. The Company was in compliance with the Credit Agreement’s covenants as of January 31, 2016.
In March 2015, the Company paid down $300.0 million of outstanding borrowings under the Credit Facility.
There are currently no outstanding borrowings held under the Credit Facility as of January 31, 2016.
The weighted average interest rate on borrowings under the Credit Facility was 1.6% for the period
beginning October 6, 2014 and ended March 2015. The Company continues to pay a fee on the undrawn amount
of the Credit Facility.
102