UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Securities Exchange Act of 1934
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INTRODUCTORY NOTE
Terms used in this Current Report on Form 8-K (this “Report”) but not defined herein, or for which definitions are not otherwise incorporated by reference herein, shall have the meaning given to such terms in the prospectus and definitive proxy statement dated November 10, 2021 (as supplemented by Supplement No. 1, dated as of November 19, 2021 and Supplement No. 2, dated as of November 19, 2021, the “Proxy Statement/Prospectus”), filed by the Company with the Securities and Exchange Commission (the “SEC”), in the section entitled “Certain Defined Terms” beginning on page iv thereof, and such definitions are incorporated by reference herein.
On December 3, 2021 (the “Closing Date”), the registrant consummated the previously announced business combinations in connection with (i) that certain Agreement and Plan of Merger, dated June 24, 2021 (as amended, the “Merger Agreement”), by and among 890 5th Avenue Partners, Inc., a Delaware corporation (“890”), Bolt Merger Sub I, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of 890 (“Merger Sub I”), Bolt Merger Sub II, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of 890 (“Merger Sub II”), and BuzzFeed, Inc., a Delaware corporation (“BuzzFeed”), pursuant to which (a) Merger Sub I merged with and into BuzzFeed (the “First Merger”), with BuzzFeed surviving the First Merger as a wholly-owned subsidiary of 890 and (b) immediately following the First Merger, BuzzFeed merged with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Two-Step Merger”), with Merger Sub II surviving the Second Merger as a wholly-owned subsidiary of 890; and (ii) the Membership Interest Purchase Agreement, dated as of March 27, 2021 (as amended, the “C Acquisition Purchase Agreement”), by and among BuzzFeed, CM Partners, LLC, Complex Media, Inc., Verizon CMP Holdings LLC and HDS II, Inc., pursuant to which the surviving entity acquired 100% of the membership interests of CM Partners, LLC. CM Partners, LLC, together with Complex Media, Inc., is referred to herein as “Complex Networks.” The Two-Step Merger and the other transactions contemplated by the Merger Agreement, including the acquisition by the surviving entity of Complex Networks, are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination, 890 was renamed “BuzzFeed, Inc.” (hereinafter referred to as “New BuzzFeed”).
On the Closing Date: (i) each issued and outstanding share of Class A common stock, par value $0.0001 per share (the “890 Class A common stock”), and Class F common stock, par value $0.0001 per share (the “890 Class F common stock”), of 890 became one share of New BuzzFeed Class A common stock, par value $0.0001 per share (the “New BuzzFeed Class A common stock”); (ii) each issued and outstanding whole warrant to purchase shares of 890 Class A common stock became a warrant to acquire one share of New BuzzFeed Class A common stock at an exercise price of $11.50 per share (each a “New BuzzFeed warrant”); and (iii) each issued and outstanding unit of 890 that had not been previously separated into the underlying share of 890 Class A common stock and the underlying warrants of 890 upon the request of the holder thereof was cancelled and entitled the holder thereof to one share of New BuzzFeed Class A common stock and one-third of one New BuzzFeed warrant.
Pursuant to the terms of the Merger Agreement, at the effective time of the Two-Step Merger (the “Effective Time”), (i) each share of BuzzFeed Class A common stock and BuzzFeed preferred stock (other than Series F Preferred Stock and Series G Preferred Stock, any cancelled shares or dissenting shares) issued and outstanding immediately prior to the Effective Time were cancelled and automatically converted into the right to receive 0.306 shares of New BuzzFeed Class A Common Stock; (ii) all of the shares of Series F Preferred Stock and Series G Preferred Stock issued and outstanding immediately prior to the Effective Time were cancelled and automatically converted into the right to receive 30,880,000 shares of New BuzzFeed Class A Common Stock; (iii) each share of Class B Common Stock of BuzzFeed issued and outstanding immediately prior to the Effective Time (other than any cancelled shares or dissenting shares) were cancelled and automatically converted into the right to receive 0.306 shares of New BuzzFeed Class B Common Stock; and (iv) each share of Class C Common Stock of BuzzFeed issued and outstanding immediately prior to the Effective Time (other than any cancelled shares or dissenting shares) were cancelled and automatically converted into the right to receive 0.306 shares of New BuzzFeed Class C Common Stock, in each case in accordance with the applicable provisions of the Merger Agreement. As a result, shares of BuzzFeed capital stock no longer represent an ownership interest in BuzzFeed, but instead represent an ownership interest in New BuzzFeed.
In addition, pursuant to subscription agreements entered into in connection with the Merger Agreement, the Company issued, and certain investors purchased, $150.0 million aggregate principal amount of unsecured convertible notes due 2026 concurrently with the closing of the Business Combination (the “Closing,” and such transaction, the “Convertible Notes Investment”).
Holders of 27,133,519 shares of 890 Class A common stock sold in 890’s initial public offering (the “public shares”) properly exercised their right to have their public shares redeemed for a full pro rata portion of the trust account holding the proceeds from 890’s initial public offering, calculated as of two business days prior to the Closing, which was approximately $10.00 per share, or $271,349,598.96 in the aggregate.
After giving effect to the Business Combination (including the issuance of New BuzzFeed Class A common stock pursuant to the C Acquisition Purchase Agreement), the redemption of public shares as described above and the separation of the former 890 units, as of the Closing Date, there were 110,789,875 shares of New BuzzFeed Class A common stock issued and outstanding, 15,872,459 shares of New BuzzFeed Class B common stock issued and outstanding and 6,478,031 shares of New BuzzFeed Class C common stock issued and outstanding.
The New BuzzFeed Class A common stock and New BuzzFeed warrants commenced trading on the Nasdaq Capital Market (“Nasdaq”) under the symbols “BZFD” and “BZFDW,” respectively, on December 6, 2021, subject to ongoing review of New BuzzFeed’s satisfaction of all listing criteria following the Business Combination.
As noted above, an aggregate of $271,349,598.96 was paid from the trust account to holders that properly exercised their right to have their public shares redeemed, and the remaining balance immediately prior to the Closing of approximately $16.2 million remained in the trust account. The remaining amount in the trust account was used to partially fund the Business Combination.
Pursuant to the C Acquisition Purchase Agreement, the consideration paid consisted of $200 million in cash and 10 million shares of New BuzzFeed Class A common stock.
A more detailed description of the Business Combination can be found in the section titled “The Business Combination Proposal” in the Proxy Statement/Prospectus and is incorporated by reference herein. Further, the foregoing description of the Merger Agreement is a summary only and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Annex A and Annex A-1 to the Proxy Statement/Prospectus, and is incorporated by reference herein.
Unless the context otherwise requires, the “Company” refers to the registrant, which is New BuzzFeed after the Closing, and 890 prior to the Closing. All references herein to the “Board” refer to the board of directors of New BuzzFeed.
This Report incorporates by reference certain information from reports and other documents that were previously filed with the SEC, including certain information from the Proxy Statement/Prospectus. To the extent there is a conflict between the information contained in this Report and the information contained in such prior reports and documents and incorporated by reference herein, the information in this Report controls.
Item 1.01. Entry into a Material Definitive Agreement.
Amended and Restated Registration Rights Agreement
On the Closing Date, in connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, New BuzzFeed, 200 Park Avenue Partners, LLC (the “Sponsor”) and certain stockholders of BuzzFeed (collectively with the Sponsor, the “Holders”) entered into an amended and restated registration rights agreement (the “Amended and Restated Registration Rights Agreement”), pursuant to which, among other things, New BuzzFeed granted such Holders and their permitted transferees certain registration rights, including, among other things, customary “demand” and “piggyback” registration rights, with respect to their shares of New BuzzFeed Class A common stock.
The material terms of the Amended and Restated Registration Rights Agreement are described in the section of the Proxy Statement/Prospectus beginning on page 119 titled “The Business Combination Proposal—Ancillary Agreements Related to the Business Combination—Amended and Restated Registration Rights Agreement.” Such description is incorporated by reference in this Report and is qualified in its entirety by the text of the Amended and Registration Rights Agreement, which is included as Exhibit 10.1 to this Report and is incorporated by reference herein.
Unsecured Convertible Notes, Indenture and Registration Rights Agreement
In connection with the Closing, the Company entered into an indenture (the “Indenture”) with Wilmington Savings Fund Society, FSB, a federal savings bank (the “Indenture Trustee”), in its capacity as trustee thereunder, in respect of the $150,000,000 in aggregate principal amount of unsecured convertible notes due in 2026 (the “Notes”) that were issued to certain investors (collectively, the “Note Investors”) in accordance with the subscription agreements entered into between the Company and the Note Investors in connection with the Merger Agreement (the “Note Subscription Agreements”). The terms of the Notes are set forth in the Indenture and the form of Global Note to the Indenture (the “Global Note”). The Notes bear interest at a rate of 8.50% per annum, payable semi-annually, are convertible into approximately 12,000,000 shares of New BuzzFeed Class A common stock at an initial conversion rate of 80 shares of New BuzzFeed Class A common stock per $1,000 principal amount of Notes or accrued and unpaid interest thereon (subject to customary adjustment provisions set forth in the Indenture upon the occurrence of certain events prior to the Notes Maturity Date (as defined below)), which is equivalent to an initial conversion price of $12.50 per share of New BuzzFeed Class A common stock in accordance with the terms thereof, and shall mature on December 3, 2026 (the “Notes Maturity Date”). Conversions of the Notes will be settled in cash, shares of New BuzzFeed Class A common stock or a combination thereof, at the Company’s election.
The Notes will be convertible at the option of the holders at any time prior to the close of business on the second scheduled trading day immediately before the Notes Maturity Date. In addition, the Company may, at its election, force conversion of the Notes after the third anniversary of the issuance of the Notes, subject to a holder’s prior right to convert and certain other conditions, if the volume-weighted average trading price of the New BuzzFeed Class A common stock is greater than or equal to 130% of the conversion price for more than 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days. In the event that a holder of the Notes elects to convert its Notes after the one year anniversary, and prior to the three year anniversary, of the issuance of the Notes, New BuzzFeed will be obligated to pay an amount to the holder in connection with such conversion equal to: (i) from the one year anniversary of the issuance of the Notes to the two year anniversary of the issuance of the Notes, an amount equal to 18 month’s interest declining ratably on a monthly basis to 12 month’s interest on the aggregate principal amount of the Notes so converted and (ii) from the two year anniversary of the issuance of the Notes to the three year anniversary of the issuance of the Notes, an amount equal to 12 month’s interest declining ratably on a monthly basis to zero month’s interest, in each case, on the aggregate principal amount of the Note so converted (the “Interest Make-Whole Payment”). The Interest Make-Whole Payment will be payable in cash. Without limiting a holder’s right to convert the Notes at its option, interest will cease to accrue on the Notes during any period in which the Company would otherwise be entitled to force conversion of the Notes, but is not permitted to do so solely due to the failure of a trading volume condition specified in the Indenture.
Each holder of a Note will have the right to cause New BuzzFeed to repurchase for cash all or a portion of the Notes held by such holder (i) at any time after the third anniversary of the Closing Date, at a price equal to par plus accrued and unpaid interest; or (ii) at any time upon the occurrence of a “fundamental change,” as defined in the Indenture (a “Fundamental Change”), at a price equal to 101% of par plus accrued and unpaid interest.
In the event of a conversion in connection with a Fundamental Change, the conversion price will be adjusted by the Fundamental Change “make-whole table” as set forth in the Indenture.
The Indenture includes restrictive covenants that, among other things, limit the ability of New BuzzFeed to incur additional debt or issue preferred stock, incur liens, make restricted payments, make certain investments, enter into affiliate transactions, enter into restrictions on distributions from subsidiaries, dispose of intellectual property and enter into certain merger or asset sale transactions. The Indenture also contains customary events of default.
The Company’s obligations under the Notes are guaranteed on a senior unsecured basis by certain of its material domestic subsidiaries.
In connection with the issuance of the Notes and concurrently with the Closing, the Company entered into a Registration Rights Agreement with the Note Investors (the “Notes Registration Rights Agreement”). Pursuant to the Notes Registration Rights Agreement, and subject to the terms and conditions thereof, the Company is required to file and cause to be declared effective a shelf registration statement registering the public resale of the shares of New BuzzFeed Class A common stock issuable upon conversion of the Notes. In addition, the Notes Registration Rights Agreement provides holders of the Notes with certain demand registration rights
The foregoing description of the Note Subscription Agreements, the Indenture, the Notes Registration Rights Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the full text of the Note Subscription Agreements, the form of which is attached hereto as Exhibit 10.3 and is incorporated by reference herein, the full text of the Notes Registration Rights Agreement, the form of which is attached hereto as Exhibit 10.4 and is incorporated by reference herein and by the full text of the Indenture (which includes the form of Global Note ), which is attached as Exhibit 4.3 and is incorporated by reference herein.
Indemnification Agreements
On the Closing Date, the Company entered into indemnification agreements with its directors and executive officers, which provide for indemnification and advancements by the Company of certain expenses and costs under certain circumstances. The material terms of the indemnification agreements are described in the section of the Proxy Statement/Prospectus beginning on page 279 titled “Certain Relationships and Related Party Transactions—New BuzzFeed—Indemnification Agreements.” Such description is incorporated by reference in this Report and is qualified in its entirety by the text of the form of indemnification agreement, which is included as Exhibit 10.16 to this Report and is incorporated by reference herein.
Amended and Restated Loan and Security Agreement
On the Closing Date, the Company, as a guarantor, BuzzFeed Media Enterprises, Inc., as administrative borrower, certain of the Company’s other domestic subsidiaries, as borrowers and/or guarantors, White Oak Commercial Finance, LLC, as administrative agent, and the other lenders from time to time party thereto, entered into an Amended and Restated Loan and Security Agreement (the “Credit Agreement”) which provides for a $50.0 million senior secured revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility matures on December 30, 2023 (the “Revolving Credit Facility Maturity Date”).
Borrowings under the Revolving Credit Facility are generally limited to 95% of qualifying investment grade accounts receivable and 90% of qualifying non-investment grade accounts receivable, subject to adjustment at the discretion of the lenders. Borrowings under the Revolving Credit Facility bear interest at LIBOR, subject to a floor rate of 0.75%, plus a margin of 3.75% to 4.25%, depending on the level of the Company’s utilization of the facility, and subject to a monthly minimum utilization of $15.0 million. The Revolving Credit Facility also includes an unused commitment fee of 0.375%. If the Company terminates the Revolving Credit Facility prior to the Revolving Credit Facility Maturity Date the Company will be required to pay an early termination fee of 3% if terminated prior to December 30, 2021, 2% if terminated after December 30, 2021 but before December 30, 2022, and 1% if terminated after December 30, 2022.
The Revolving Credit Facility includes a financial covenant that requires the Company to maintain at least $25.0 million of unrestricted cash at all times. The Revolving Credit Facility also contains customary representations and warranties, events of default, financial reporting requirements, and affirmative and negative covenants, including restrictions limiting the Company’s ability to incur additional indebtedness, grant liens, pay dividends, hold unpermitted investments, repurchase or redeem equity interests, or make material changes to the business.
The Revolving Credit Facility is secured by a first priority security interest on the Company’s and the other borrowers’ and guarantors’ cash, accounts receivable, books and records and related assets.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the full text of the Credit Agreement, which is attached hereto as Exhibit 10.22 and is incorporated by reference herein.
Amended and Restated Escrow Agreement
On the Closing Date, Jonah Peretti, Chief Executive Officer of New BuzzFeed, Jonah Peretti, LLC (collectively with Mr. Peretti, the “Peretti Parties”), NBCUniversal Media, LLC (“NBCU”) and PNC Bank, National Association, as escrow agent, entered into an Amended and Restated Escrow Agreement (the “Amended and Restated Escrow Agreement”), which amends and restates in its entirety the Escrow Agreement dated June 23, 2021 (the “Prior Escrow Agreement”) and provides for, among other things, the escrow of 1,200,000 shares of New BuzzFeed Class A common stock or New BuzzFeed Class B common stock (the “Escrowed Shares”) exchangeable by the Peretti Parties in connection with the Two-Step Merger. The Amended and Restated Escrow Agreement revised the escrow mechanics related to the Escrowed Shares in the Prior Escrow Agreement to accommodate the fact that the Escrowed Shares would be issued in book-entry rather than certificate form and corrected the definition of Closing Date to refer to December 3, 2021, the actual closing date of the Business Combination. Pursuant to the Amended and Restated Escrow Agreement, in the event the Transfer Date SPAC Share Price (as defined in the Amended and Restated Escrow Agreement) is less than $12.50 per share on the Transfer Date (as defined in the Amended and Restated Escrow Agreement), the Peretti Parties and NBCU shall instruct the escrow agent to transfer (1) to NBCU a number of Escrowed Shares equal to the Make Whole Shares (as defined in the Amended and Restated Escrow Agreement) and (2) to the Peretti Parties, the remainder of the Escrowed Shares, if any. If the Transfer Date SPAC Share Price is equal to or greater than $12.50 on the Transfer Date, the Peretti Parties and NBCU shall instruct the escrow agent to transfer all of the Escrowed Shares to the Peretti Parties.
The foregoing description of the Amended and Restated Escrow Agreement does not purport to be complete and is qualified in its entirety by the full text of the Amended and Restated Escrow Agreement, which is attached hereto as Exhibit 10.19 and is incorporated by reference herein.
Item 2.01. Completion of Acquisition or Disposition of Assets.
The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference. On December 2, 2021, 890 held an extraordinary general meeting of shareholders (the “Extraordinary General Meeting”), at which the 890 shareholders considered and adopted, among other matters, a proposal to approve the Business Combination. The Business Combination was completed on December 3, 2021.
FORM 10 INFORMATION
Prior to the Closing, the Company was a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company became a holding company whose only assets consist of equity interests in BuzzFeed Media Enterprises, Inc. In accordance with Item 2.01(f) of Form 8-K, the Company is providing below the information that would be required if the Company were filing a general form for registration of securities on Form 10. Please note that the information provided below relates to the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this Report (including in the information that is incorporated by reference in this Report) may constitute “forward-looking statements” for purposes of the federal securities laws. The Company’s forward-looking statements include, but are not limited to, statements regarding the Company’s or the Company’s management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the Business Combination. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Report may include, for example, statements about:
| · | New BuzzFeed’s ability to realize the benefits expected from the Business Combination; |
| · | the ability to obtain and/or maintain the listing of New BuzzFeed’s Class A common stock and warrants on Nasdaq following the Business Combination; |
| · | New BuzzFeed’s success in retaining or recruiting, or changes required in, its officers, key employees or directors following the Business Combination; |
| · | the business, operations and financial performance of New BuzzFeed after the Business Combination, including: |
| · | expectations with respect to financial and business performance of New BuzzFeed, including financial projections and business metrics and any underlying assumptions thereunder; |
| · | future business plans and growth opportunities; |
| · | anticipated trends, growth rates, and challenges in New BuzzFeed’s business and in the markets in which it operates; |
| · | changes in the business and competitive environment in which New BuzzFeed operates; |
| · | the impact of national and local economic and other conditions and developments in technology, each of which could influence the levels (rate and volume) of New BuzzFeed’s subscriptions and advertising, the growth of New BuzzFeed’s business and the implementation of New BuzzFeed’s strategic initiatives; |
| · | government regulation, including revised foreign content and ownership regulations; |
| · | poor quality broadband infrastructure in certain markets; |
| · | technological developments; |
| · | demand for products and services; |
| · | developments and projections relating to New BuzzFeed’s competitors and the digital media industry; |
| · | the impact of the COVID-19 pandemic on New BuzzFeed’s business and the actions New BuzzFeed may take in response thereto; |
| · | expectations regarding future acquisitions, partnerships or other relationships with third parties; |
| · | New BuzzFeed’s future capital requirements and sources and uses of cash, including New BuzzFeed’s ability to obtain additional capital in the future; and |
| · | other factors detailed under the section titled “Risk Factors” beginning on page 28 of the Proxy Statement/Prospectus and incorporated by reference herein. |
The forward-looking statements contained in this Report are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described or incorporated by reference under the heading “Risk Factors” below. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by the COVID-19 pandemic and there may be additional risks that the Company considers immaterial or which are unknown. It is not possible to predict or identify all such risks. The Company will not and does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Business
The business of the Company is described in the Proxy Statement/Prospectus in the section titled “Business of New BuzzFeed” beginning on page 181 thereof and that information is incorporated by reference herein.
Risk Factors
The risks associated with the Company’s business are described in the Proxy Statement/Prospectus in the section titled “Risk Factors” beginning on page 28 thereof and are incorporated by reference herein. A summary of the risks associated with the Company’s business are also described on page 19 of the Proxy Statement/Prospectus under the heading “Summary of the Proxy Statement/Prospectus—Summary of Risk Factors” and are incorporated by reference herein.
Financial Information
The financial information of BuzzFeed for the years ended December 31, 2020, 2019 and 2018 and as of December 31, 2020 and 2019 is described in the Proxy Statement/Prospectus in the sections titled “Summary Historical Financial Information of BuzzFeed” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of BuzzFeed” beginning on pages 23 and 192 thereof, respectively, and is incorporated by reference herein.
The financial information of BuzzFeed as of September 30, 2021 and for the three and nine months ended September 30, 2021 is described in Supplement No. 2 to the Proxy Statement/Prospectus in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of BuzzFeed” in Exhibit 99.4 attached thereto and is incorporated by reference herein.
The financial information of CM Partners, LLC for the years ended December 31, 2020, 2019 and 2018 and as of December 31, 2020 and 2019 is described in the Proxy Statement/Prospectus in the sections titled “Summary Historical Financial Information of Complex Networks” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Complex Networks” beginning on pages 24 and 213 thereof, respectively, and is incorporated by reference herein.
The financial information of CM Partners, LLC as of September 30, 2021 and for the three and nine months ended September 30, 2021 is described in Supplement No. 2 to the Proxy Statement/Prospectus in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Complex Networks” in Exhibit 99.5 attached thereto and is incorporated by reference herein.
The financial information of 890 for the period from September 9, 2020 (inception) through December 31, 2020 and as of December 31, 2020 is described in the Proxy Statement/Prospectus in the sections titled “Summary Historical Financial Information of 890” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of 890” beginning on pages 21 and 176 thereof, respectively, and is incorporated by reference herein.
The financial information of 890 as of September 30, 2021 and for the three and nine months ended September 30, 2021 is described in Supplement No. 1 to the Proxy Statement/Prospectus in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk” beginning on pages 25 and 30 thereof, respectively, and is incorporated by reference herein.
Properties
The properties of the Company are described in the Proxy Statement/Prospectus in the section titled “Business of New BuzzFeed” beginning on page 181 thereof and that information is incorporated by reference herein.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information known to the Company regarding the beneficial ownership of New BuzzFeed Class A common stock and New BuzzFeed Class B common stock immediately following consummation of the Business Combination by:
| · | each person who is the beneficial owner of more than 5% of the outstanding shares of New BuzzFeed common stock; |
| · | each of the Company’s named executive officers and directors; and |
| · | all of the Company’s executive officers and directors as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Except as described in the footnotes below and subject to applicable community property laws and similar laws, the Company believes that each person listed above has sole voting and investment power with respect to such shares. Unless otherwise noted, the address of each beneficial owner is c/o BuzzFeed, Inc., 111 East 18th Street, New York, New York 10003.
The beneficial ownership of New BuzzFeed common stock is based on 110,789,875 shares of New BuzzFeed Class A common stock and 15,872,459 shares of New BuzzFeed Class B common stock issued and outstanding immediately following consummation of the Business Combination, including the redemption of the public shares as described above, the consummation of the Convertible Notes Investment, and the separation of the former 890 units. References to “Class A common stock” and “Class B common stock” in the table below and its related footnotes are to the New BuzzFeed Class A common stock and the New BuzzFeed Class B common stock, respectively.
Beneficial Ownership Table
| Class A Common Stock | Class B Common Stock | |||||||||||||||||||
| Name and Address of Beneficial Owner (1) | Number of Shares | % of Shares | Number of Shares | % of Shares | % of Combined Voting Power | |||||||||||||||
| 5% or Greater Stockholders: | ||||||||||||||||||||
| 200 Park Avenue Partners, LLC (2) | 7,205,040 | 6.49 | % | 12,019,830 | 75.73 | % | 67.23 | % | ||||||||||||
| NBCUniversal Media, LLC (3) | 30,880,000 | 27.87 | % | — | — | 3.41 | % | |||||||||||||
| New Enterprise Associates 13, L.P. (4) | 15,333,892 | 13.84 | % | — | — | 1.70 | % | |||||||||||||
| Entities affiliated with RRE (5) | 10,350,407 | 9.34 | % | — | — | 1.14 | % | |||||||||||||
| General Atlantic BF, L.P. (6) | 7,862,502 | 7.10 | % | — | — | * | ||||||||||||||
| Entities affiliated with Hearst (7) | 12,409,578 | 11.20 | % | — | — | 1.37 | % | |||||||||||||
| Jonah Peretti (8) | — | — | 12,019,830 | 75.73 | % | 66.45 | % | |||||||||||||
| John Johnson (9) | — | — | 5,582,414 | 35.17 | % | 30.86 | % | |||||||||||||
| Entities affiliated with Redwood (10) | 7,600,000 | 5.83 | % | — | — | * | ||||||||||||||
| Executive Officers and Directors: | ||||||||||||||||||||
| Jonah Peretti (8) | — | — | 12,019,830 | 75.73 | % | 66.45 | % | |||||||||||||
| Rhonda Powell (11) | 54,059 | * | — | — | * | |||||||||||||||
| Phuong Dao Nguyen (12) | 358,016 | * | — | — | * | |||||||||||||||
| Angela Acharia | — | — | — | — | — | |||||||||||||||
| Joan Amble (13) | 3,985 | * | — | — | * | |||||||||||||||
| Greg Coleman (14) | 2,231,333 | 1.99 | % | — | — | * | ||||||||||||||
| Patrick Kerins (15) | 15,333,892 | 13.84 | % | — | — | 1.70 | % | |||||||||||||
| Janet Rollé (16) | 31,237 | * | — | — | * | |||||||||||||||
| Adam Rothstein | — | — | — | — | — | |||||||||||||||
| All current directors and executive officers as a group (9 persons) | 18,012,522 | 16.23 | % | 12,019,830 | 75.73 | % | 68.44 | % | ||||||||||||
| * | Less than one percent. |
| (1) | Unless otherwise noted, the business address of each of those listed in the table above is c/o BuzzFeed, Inc., 111 East 18th Street, New York, NY 10003. |
| (2) | Represents (i) 6,952,540 shares of Class A common stock held by the Sponsor, (ii) 252,500 shares of Class A common stock issuable upon the exercise of New BuzzFeed warrants held by the Sponsor and (iii) 12,019,830 shares of Class B common stock beneficially held by Jonah Peretti. The Voting Agreement provides that the Voting Agreement Parties, which includes Jonah Peretti and certain of his affiliates, shall vote all shares of New BuzzFeed common stock beneficially held by such Voting Agreement Parties in favor of the election to New Buzzfeed’s board of directors of certain individuals designated by the Sponsor and, as a result, the Sponsor is deemed to share beneficial ownership of Jonah Peretti’s shares of BuzzFeed common stock. |
| (3) | NBCUniversal Media, LLC is a wholly owned subsidiary of Comcast Corporation. The mailing address of NBCUniversal Media, LLC is 30 Rockefeller Plaza, New York, NY, 10112. |
| (4) | The securities directly held by New Enterprise Associates 13, L.P. (“NEA 13”) are indirectly held by NEA Partners 13, L.P. (“NEA Partners 13”), the sole general partner of NEA 13, NEA 13 GP, LTD (“NEA 13 LTD”), the sole general partner of NEA Partners 13 and each of the individual directors of NEA 13 LTD. The individual directors of NEA 13 LTD (the “NEA 13 LTD Directors”) are Forest Baskett, Patrick Kerins, who is a member of New BuzzFeed’s board of directors, and Scott D. Sandell. NEA Partners 13, NEA 13 LTD, and the NEA 13 LTD Directors share voting and dispositive power with regard to New BuzzFeed’s securities directly held by NEA 13. The mailing address of these entities is 1954 Greenspring Drive, Suite 600, Timonium, Maryland 21093. |
| (5) | Consists of (i) 812,577 shares of Class A common stock held by RRE Leaders Fund, LP and (ii) 9,537,830 shares of Class A common stock held by RRE Ventures IV, L.P. RRE Leaders GP, LLC, the general partner of RRE Leaders Fund LP, has sole voting and dispositive power with respect to the shares held by RRE Leaders Fund LP. The sole general partner of RRE Ventures IV, L.P. is RRE Ventures GP IV, LLC. The managing members and officers of these entities are James D. Robinson IV, Stuart J. Ellman, and William D. Porteous. The address of each of these entities is 130 East 59th Street, 17th Floor, New York, NY 10022. |
| (6) | Each of General Atlantic Partners 93, L.P. (“GAP 93”), GAPCO GmbH & Co. KG (“GAPCO GmbH”), GAP Coinvestments III, LLC (“GAPCO III”), GAP Coinvestments IV, LLC (“GAPCO IV”), GAP Coinvestments V, LLC (“GAPCO V”) and GAP Coinvestments CDA, L.P. (“GAPCO CDA”) share beneficial ownership of the shares held by General Atlantic BF, L.P. The general partner of GA BF is General Atlantic (SPV) GP, LLC (“GA SPV”). The general partner of GAPCO GmbH is GAPCO Management GmbH (“GAPCO Management”). The general partner of GAP 93 is General Atlantic GenPar, L.P. (“GA GenPar”) and the general partner of GA GenPar is General Atlantic, L.P. (“GA LP”). GA LP is ultimately controlled by the Management Committee of GASC MGP, LLC (the "GA Management Committee"). GA LP is the managing member of GAPCO III, GAPCO IV and GAPCO V, the general partner of GAPCO CDA and is the sole member of GA SPV. There are nine members of the GA Management Committee of GA LP. GA LP, GASC MGP, LLC, GA GenPar, GA SPV, GAPCO Management and the GA Funds (collectively, the “GA Group”) are a “group” within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934, as amended. The mailing address of the foregoing General Atlantic entities, other than GAPCO GmbH and GAPCO Management, is c/o General Atlantic Service Company, L.P., 55 East 52nd Street, 33rd Floor, New York, NY 10055. The mailing address of GAPCO GmbH and GAPCO Management is c/o General Atlantic GmbH, Luitpoldblock, Amiraplatz 3, 80333 München, Germany. Each of the members of the GA Management Committee disclaims ownership of the shares except to the extent that he has a pecuniary interest therein. |
| (7) | Consists of (i) 7,409,578 shares of Class A common stock held by Hearst Communications, Inc. and (ii) 5,000,000 shares of Class A common stock held by HDS II, Inc. HDS II, Inc. is a wholly- owned subsidiary of Hearst Communications, Inc. Pursuant to the definition of “beneficial owner” set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, each of Hearst Communications, Inc., Hearst Holdings, Inc., The Hearst Corporation, and The Hearst Family Trust may be deemed to beneficially own the shares held by Hearst Communications, Inc. and HDS II, Inc. Hearst Communications, Inc. has the power to direct the voting and disposition of the shares as the controlling stockholder of HDS II, Inc. Hearst Holdings, Inc. has the power to direct the voting and disposition of the shares as the controlling stockholder of Hearst Communications, Inc. The Hearst Corporation has the power to direct the voting and disposition of the shares as the controlling stockholder of Hearst Holdings, Inc. The Hearst Family Trust has the power to direct the voting and disposition of the shares as the controlling stockholder of The Hearst Corporation. The address of each of HDS II, Inc., Hearst Communications, Inc., Hearst Holdings, Inc. and The Hearst Corporation is 300 West 57th Street, New York, NY 10019. The address of The Hearst Family Trust is 1776 Broadway, Suite 802, New York, NY 10019. |
| (8) | Consists of (i) 6,437,416 shares of Class B common stock held by Jonah Peretti, LLC, (ii) 1,200,000 shares of Class B common stock held in the account of PNC Bank, National Asocation, as escrow agent, pursuant to the terms of the Amended and Restated Escrow Agreemnt and (iii) 5,582,414 shares over which Mr. Peretti holds an irrevocable proxy granted by John Johnson III and Johnson BF, LLC pursuant to the Holder Voting Agreement, as further described in footnote (9). Mr. Peretti is the managing member of Jonah Peretti LLC and has sole voting, investment and dispositive power over the shares held by Jonah Peretti, LLC. |
| (9) | Consists of (i) 31,461 shares of Class B common stock held by John Johnson III and (ii) 5,550,953 shares of Class B common stock held by Johnson BF, LLC. John S. Johnson III is the sole member of Johnson BF, LLC and shares voting and dispositive power over the shares held by Johnson BF, LLC. Mr. Johnson and Johnson BF, LLC have granted Mr. Peretti an irrevocable proxy over their 31,461 shares and 5,550,953 shares, respectively, pursuant to the Holder Voting Agreement. As a result, Mr. Johnson does not hold voting power of these shares, but retains dispositive power. |
| (10) | Consists of (i) 5,220,000 shares of Class A common stock issuable upon conversion of $65,250,000 principal amount of convertible notes purchased by Redwood Master Fund Ltd. in the Convertible Note Financing, (ii) 2,240,000 shares of Class A common stock issuable upon conversion of $28,000,000 principal amount of convertible notes purchased by Redwood Opportunity Master Fund, Ltd. in the Convertible Note Financing and (iii) 140,000 shares of Class A common stock issuable upon conversion of $1,750,000 principal amount of convertible notes purchased by Corbin Opportunity Fund, L.P. in the Convertible Note Financing. The percentage ownership represents a percentage of the total Class A common stock which would be outstanding following a conversion of all convertible notes issued in the Convertible Note Financing. The conversion rate is 80 shares of Class A common stock per $1,000 principal amount of the convertible notes which is equivalent to a conversion price of approximately $12.50 per share. Redwood Capital Management, LLC (“RCM”) is the investment manager of Redwood Master Fund, Ltd. and Redwood Opportunity Master Fund, Ltd. RCM is wholly owned by Redwood Capital Management Holdings, LP (“RCM Holdings”). Mr. Ruben Kliksberg is the Chief Executive Officer of RCM, is the sole managing member of the general partner of RCM Holdings, and controls a majority of the limited partnership interests in RCM Holdings. Corbin Capital Partners Management, LLC is the general partner of Corbin Opportunity Fund, L.P. and Corbin Capital Partners, L.P. is the investment manager of Corbin Opportunity Fund, L.P. The mailing address for Redwood Master Fund Ltd., Redwood Opportunity Master Fund, Ltd. and Corbin Opportunity Fund, L.P. is c/o Redwood Capital Management, LLC, 250 W. 55th Street, New York, New York 10019. |
| (11) | Consists of 54,059 shares of Class A common stock that would be issuable upon settlement of RSU awards vested as of or within 60 days of December 3, 2021. |
| (12) | Consists of 358,016 shares of Class A common stock that would be issuable upon exercise of options exercisable as of or within 60 days of December 3, 2021. |
| (13) | Consists of 3,985 shares of Class A common stock that would be issuable upon settlement of RSU awards vested as of or within 60 days of December 3, 2021. |
| (14) | Consists of (i)(a) 442,597 shares of Class A common stock held by Mr. Coleman and (b) 1,594,854 shares of Class A common stock that would be issuable upon exercise of options exercisable as of or within 60 days of December 3, 2021; (ii) 13,089 shares of Class A common stock held by The Audrey Amelia Coleman 2014 Trust; (iii) 51,722 shares of Class A common stock held by The Benjamin Coleman 2000 Trust; (iv) 12,538 shares of Class A common stock held by The Coleman 2014 Family Trust; (v) 13,089 shares of Class A common stock held by The Eloise Marie Coleman 2016 Trust; (vi) 51,722 shares of Class A common stock held by The Melissa Coleman 2000 Trust; and (vii) 51,722 shares of Class A common stock held by The Stephen Coleman 2000 Trust. Mr. Coleman is the trustee of each of The Audrey Amelia Coleman 2014 Trust, The Benjamin Coleman 2000 Trust, The Coleman 2014 Family Trust, The Eloise Marie Coleman 2016 Trust, The Melissa Coleman 2000 Trust and The Stephen Coleman 2000 Trust (together, the “Coleman Trusts”) and has voting and dispositive power over the shares held in each of the Coleman Trusts. |
| (15) | Consists of shares held by New Enterprise Associates 13, L.P., identified in footnote (4) above. |
| (16) | Consists of 31,237 shares of Class A common stock that would be issuable upon settlement of RSU awards vested as of or within 60 days of December 3, 2021. |
Directors and Executive Officers
The Company’s directors and executive officers upon the Closing are described in the Proxy Statement/Prospectus in the section titled “New BuzzFeed Management After the Business Combination” beginning on page 265 thereof and that information is incorporated by reference herein.
Directors
The following persons constitute the Company’s Board effective upon the Closing: Jonah Peretti, Angela Acharia, Joan Amble, Greg Coleman, Patrick Kerins, Janet Rollé and Adam Rothstein. Jonah Peretti was appointed as the Chair of the Board and Patrick Kerins was appointed as the Lead Independent Director. Jonah Peretti and Angela Acharia were appointed to serve as Class I directors, with terms expiring at the Company’s first annual meeting of stockholders following the Closing; Joan Amble, Janet Rollé and Adam Rothstein were appointed to serve as Class II directors, with terms expiring at the Company’s second annual meeting of stockholders following the Closing; Greg Coleman and Patrick Kerins were appointed to serve as Class III directors, with terms expiring at the Company’s third annual meeting of stockholders following the Closing. Biographical information for these individuals is set forth in the Proxy Statement/Prospectus in the section titled “New BuzzFeed Management After the Business Combination” beginning on page 265, which is incorporated by reference herein.
Committees of the Board of Directors
The standing committees of the Company’s Board consist of an audit committee (the “Audit Committee”), a compensation committee (the “Compensation Committee”) and a nominating, corporate governance and corporate responsibility committee (the “Nominating Committee”). Each of the committees reports to the Board.
The Board appointed Ms. Amble and Messrs. Kerins and Rothstein to serve on the Audit Committee, with Ms. Amble serving as the chair of the Audit Committee. The Board appointed Mr. Kerins and Mss. Acharia and Rollé to serve on the Compensation Committee, with Mr. Kerins serving as the chair of the Compensation Committee. The Board appointed Mss. Acharia, Amble and Rollé to serve on the Nominating Committee, with Ms. Rollé as chair of the Nominating Committee.
Executive Officers
Effective as of the Closing, the executive officers are:
| Name | Age | Position | ||
| Jonah Peretti | 47 | Founder, Chief Executive Officer, and Director | ||
| Felicia DellaFortuna | 38 | Chief Financial Officer | ||
| Rhonda Powell | 53 | Chief Legal Officer and Corporate Secretary | ||
| Phuong Dao Nguyen | 47 | Publisher |
Biographical information for these individuals is set forth in the Proxy Statement/Prospectus in the section titled “New Buzzfeed Management After the Business Combination” beginning on page 265, which is incorporated by reference herein.
Executive Compensation
Executive and Director Compensation
The executive compensation of the Company’s named executive officers and directors is described in the Proxy Statement/Prospectus in the section titled “Executive Compensation” beginning on page 273, thereof and that information is incorporated by reference herein.
Compensation Committee Interlocks and Insider Participation
None of the members of the Company’s compensation committee is currently, or has been at any time, one of the Company’s officers or employees.
Certain Relationships and Related Person Transactions, and Director Independence
Certain Relationships and Related Person Transactions
Certain relationships and related person transactions are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions” beginning on page 279 thereof and are incorporated by reference herein.
Director Independence
Under the rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating committees be independent. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has determined that each of the directors except for Mr. Peretti and Mr. Coleman on the Board qualify as independent directors as defined under the applicable Nasdaq and SEC rules.
Legal Proceedings
Reference is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus titled “Business of New BuzzFeed—Legal Proceedings” beginning on page 187, which is incorporated by reference herein.
Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Market Information and Dividends
On December 6, 2021, the New BuzzFeed Class A common stock and New BuzzFeed public warrants began trading on Nasdaq under the new trading symbols of “BZFD” and “BZFDW.” The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future.
Holders of Record
Following the completion of the Business Combination, including the redemption of public shares as described above and the separation of the former 890 units, the Company had 133,140,365 shares of New BuzzFeed common stock outstanding that were held of record by approximately 850 holders, and no shares of preferred stock outstanding. Such amounts do not include DTC participants or beneficial owners holding through nominee names.
Securities Authorized for Issuance Under 2021 Equity Incentive Plan
Reference is made to the disclosure described in the Proxy Statement/Prospectus in the section titled “The Incentive Plan Proposal” beginning on page 133 thereof, which is incorporated by reference herein. The 2021 Equity Incentive Plan and the material terms thereunder, including the authorization of the initial share reserve thereunder, were approved by 890’s stockholders at the Extraordinary General Meeting.
Securities Authorized for Issuance Under Employee Stock Purchase Plan
Reference is made to the disclosure described in the Proxy Statement/Prospectus in the section titled “The Employee Stock Purchase Plan Proposal” beginning on page 140 thereof, which is incorporated by reference herein. The Employee Stock Purchase Plan and the material terms thereunder, including the authorization of the initial share reserve thereunder, were approved by 890’s stockholders at the Extraordinary General Meeting.
Recent Sales of Unregistered Securities
Reference is made to the disclosure set forth under Item 3.02 of this Report, which is incorporated by reference herein.
Description of Registrant’s Securities
The Company’s securities are described in the Proxy Statement/Prospectus in the section titled “Description of New BuzzFeed Securities” beginning on page 234 thereof and that information is incorporated by reference herein. As described below, the Company’s certificate of incorporation and bylaws became effective as of the Closing.
Indemnification of Directors and Officers
The information set forth above in the sections titled “Indemnification Agreements” in Item 1.01 to this Report is incorporated by reference herein. The indemnification of the Company’s directors and officers is described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions—New BuzzFeed—Indemnification Agreements” beginning on page 279 thereof and that information is incorporated by reference herein.
Financial Statements and Supplementary Data
The information set forth under Item 9.01 of this Report is incorporated by reference herein.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
The information set forth under Item 4.01 of this Report is incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In connection with the Closing, the Company issued $150,000,000 in aggregate principal amount of Notes to the Note Investors pursuant to the terms of the Note Subscription Agreements, the Indenture and the Global Note and also entered into the Credit Agreement which provides for a $50.0 million senior secured revolving credit facility. The disclosure contained in Item 1.01 of this Report is also incorporated by reference herein.
This summary is qualified in its entirety by reference to (i) the Note Subscription Agreements, the form of which is included as Exhibit 10.3 to this Report and is incorporated by reference herein, (ii) the Indenture, which is included as Exhibit 4.3 to this Report and is incorporated by reference herein and (iii) the Credit Agreement which is included as Exhibit 10.22 to this Report and is incorporated by reference herein.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth in the “Introductory Note” above is incorporated by reference herein. The Notes issued in connection with the Closing of the Business Combination are convertible into approximately 12,000,000 shares of New BuzzFeed Class A common stock. The Notes were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption based upon representations made by the Note Investors in the Note Subscription Agreements. The disclosure contained in Item 1.01 of this Report is also incorporated by reference herein.
This summary is qualified in its entirety by reference to (i) the Note Subscription Agreements, the form of which was included as Exhibit 10.3 to this Report and is incorporated by reference herein and (ii) the Indenture (which includes the form of Global Note), which is included as Exhibit 4.3 to this Report and is incorporated by reference herein.
At the Closing, the Sponsor exercised its right to convert the working capital loans made by the Sponsor to the Company into an additional 33,333 private placement warrants and 100,000 shares of New BuzzFeed’s Class A common stock in satisfaction of $1.0 million principal amount of the loan. The private placement warrants and shares issued in satisfaction of the working capital loan were issued by the Company in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.
In connection with the closing of the Business Combination, the Company entered into separate Private Placement Share Purchase Agreements with each of Cowen Investments II LLC (“Cowen”) and Craig-Hallum Capital Group, LLC (“Craig-Hallum”) (such agreements, the “Share Purchase Agreements”), each of which became effective on December 4, 2021. Pursuant to the Share Purchase Agreements, the Company agreed to sell and each of Cowen and Craig-Hallum agreed to subscribe for 150,656 and 58,781 shares of New BuzzFeed Class A common stock, respectively, in full satisfaction of $1.5 million and $0.6 million, respectively, a portion of cash fees payable to each of an affiliate of Cowen and Craig-Hallum in connection with certain services provided to the Company in connection with the Business Combination. The purchase and sale of the shares of New BuzzFeed Class A common stock pursuant to the Share Purchase Agreements was consummated on December 4, 2021. The shares of New BuzzFeed Class A common stock issued pursuant to the Share Purchase Agreements were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption based upon representations made by each of Cowen and Craig-Hallum in the Share Purchase Agreements.
Item 3.03. Material Modification to Rights of Security Holders
The information set forth in Item 5.03 to this Report is incorporated by reference herein.
Item 4.01. Change in Registrant’s Certifying Accountant.
On December 8, 2021, the audit committee of the Board approved the dismissal of Marcum LLP (“Marcum”) and the engagement of Deloitte & Touche LLP (“Deloitte”) as New BuzzFeed’s independent registered public accounting firm to audit New BuzzFeed’s consolidated financial statements for the year ending December 31, 2021. Deloitte served as independent registered public accounting firm of BuzzFeed prior to the Business Combination. Accordingly, Marcum, 890’s independent registered public accounting firm prior to the Business Combination, was informed on December 8, 2021 that it would be replaced by Deloitte as New BuzzFeed’s independent registered public accounting firm, effective December 8, 2021.
The reports of Marcum on 890’s balance sheet as of December 31, 2020 and the statements of operations, changes in stockholder’s equity and cash flows for the period from September 9, 2020 (date of inception) through December 31, 2020, did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles.
During the period from September 9, 2020 (date of inception) through December 31, 2020, and through December 8, 2021, there were no disagreements between 890 and Marcum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make reference to the subject matter of the disagreements in its reports on 890’s financial statements for such period.
During the period from September 9, 2020 (date of inception) through December 31, 2020, and through December 8, 2021, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act), other than the material weakness in internal controls identified by management related to the accounting for certain complex features of the Class A common stock and warrants issued by the Company. This material weakness resulted in the restatement of the Company’s interim financial statements for the quarters ended March 31, 2021 and June 30, 2021.
During the period from September 9, 2020 (date of inception) to the date the Board approved the engagement of Deloitte as New BuzzFeed’s independent registered public accounting firm, 890 did not consult with Deloitte on the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and no written report or oral advice was provided to the Company by Deloitte that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is described in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act, and the related instructions to Item 304 of Regulation S-K under the Exchange Act, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act.
New BuzzFeed has provided Marcum with a copy of the foregoing disclosures and has requested that Marcum furnish New BuzzFeed with a letter addressed to the SEC stating whether it agrees with the statements made by New BuzzFeed set forth above. A copy of Marcum’s letter, dated December 9, 2021, is filed as Exhibit 16.1 to this Current Report on Form 8-K.
Item 5.01. Changes in Control of the Registrant.
The information set forth above under “Introductory Note” and Item 2.01 of this Report is incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth above in the sections titled “Directors and Executive Officers,” “Executive Compensation,” “Certain Relationships and Related Person Transactions, and Director Independence” and “Indemnification of Directors and Officers” in Item 2.01 to this Report is incorporated by reference herein.
Further, in connection with the Two-Step Merger, effective as of the Closing, Adam Rothstein resigned from his position as 890’s Executive Chairman, Emiliano Calemzuk resigned from his position as 890’s Chief Executive Officer, Michael Del Nin resigned from his positions as 890’s Chief Financial Officer and Chief Operating Officer, and each of Linda Yaccarino, Kelli Turner, David Bank, Scott Flanders and Jon Jashni resigned from their positions as directors of 890.
In addition, the 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan became effective upon the Closing. The material terms of each of the 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan are described in the Proxy Statement/Prospectus in the sections entitled “The Incentive Plan Proposal” and “The Employee Stock Purchase Plan Proposal” beginning on pages 133 and 140 thereof, respectively, which are incorporated by reference herein.
Following the Closing of the Business Combination, the Company entered into indemnification agreements with each of its newly elected directors and officers (the “Indemnification Agreements”). The Indemnification Agreements provide the directors and executive officers with contractual rights to indemnification and expense advancement. The foregoing description of the Indemnification Agreements is not complete and is subject to, and qualified in its entirety by reference to, the text of the form of Indemnification Agreement, which is included as Exhibit 10.16 and is incorporated by reference herein.
Item 5.03. Amendments to Articles of Incorporation or Bylaws.
On December 3, 2021, in connection with the consummation of the Business Combination, the Company amended and restated its certificate of incorporation, effective as of the Closing (as amended, the “Amended and Restated Certificate of Incorporation”), and the Company adopted restated bylaws (the “Bylaws”).
Copies of the Amended and Restated Certificate of Incorporation and the Bylaws are attached as Exhibits 3.1 and 3.2 to this Report, respectively, and are incorporated by reference herein.
The material terms of the Amended and Restated Certificate of Incorporation and the Bylaws and the general effect upon the rights of holders of the Company’s capital stock are included in the Proxy Statement/Prospectus under the sections titled “The Organizational Documents Proposal,” “The Advisory Charter Amendment Proposals” and “Description of New BuzzFeed Securities” beginning on pages 122, 126, and 234 of the Proxy Statement/Prospectus, respectively, which are incorporated by reference herein.
Item 5.06 Change in Shell Company Status
As a result of the Business Combination, the Company ceased to be a shell company. Reference is made to the disclosure in the Proxy Statement/Prospectus in the sections entitled “The Business Combination Proposal” beginning on page 75 thereof, which is incorporated by reference herein.
Item 8.01. Other Events.
On December 3, 2021, New BuzzFeed issued a press release announcing the completion of the Business Combination, a copy of which is furnished as Exhibit 99.1 hereto.
Item 9.01. Financial Statement and Exhibits.
| (a) | Financial statements of businesses acquired. |
The unaudited condensed financial statements of BuzzFeed as of September 30, 2021 and for the three months and nine months ended September 30, 2021 and 2020 are included in Supplement No. 2 to the Proxy Statement/Prospectus in Exhibit 99.2 attached thereto and are incorporated by reference herein.
The audited financial statements of BuzzFeed as of December 31, 2020 and 2019, and for the three year period ended December 31, 2020 are included in the Proxy Statement/Prospectus beginning on page F-59 and are incorporated by reference herein.
The unaudited condensed financial statements of CM Partners, LLC as of September 30, 2021 and for the three months and nine months ended September 30, 2021 and 2020 are included in Supplement No. 2 to the Proxy Statement/Prospectus in Exhibit 99.4 attached thereto and are incorporated by reference herein.
The audited financial statements of CM Partners, LLC as of December 31, 2020 and 2019, and for the three-year period ended December 31, 2020 are included in the Proxy Statement/Prospectus beginning on page F-104 and are incorporated by reference herein.
The unaudited financial statements of 890 as of and for the three months and nine months ended September 30, 2021 and the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, are included in Supplement No. 1 to the Proxy Statement/Prospectus beginning on page 25 and are incorporated by reference herein.
The audited financial statement of 890 for the period from September 9, 2020 (date of inception) through December 31, 2020 and the related notes are included in the Proxy Statement/Prospectus beginning on page F-23 and are incorporated by reference herein.
| (b) | Pro forma financial information. |
The unaudited pro forma condensed combined financial information of New BuzzFeed as of September 30, 2021 and for the year ended December 31, 2020 and the nine months ended September 30, 2021 are attached hereto as Exhibit 99.2.
| (d) | Exhibits. |
† Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
* The Company has omitted portions of this Exhibit as permitted under Item 601(b)(1) of Regulation S-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | December 9, 2021 | |||
| BuzzFeed, Inc. | ||||
| By: | /s/ Jonah Peretti | |||
| Name: | Jonah Peretti | |||
| Title: | Chief Executive Officer | |||
| | Dated: December 3, 2021 | | | 890 5TH AVENUE PARTNERS, INC. | |
| | | | |
By: /s/ Jonah Peretti
Name: Jonah Peretti
Title: Director |
|
(a Delaware corporation)
(a Delaware corporation)
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As Effective December 3, 2021
OF
BUZZFEED, INC.
a Delaware Corporation
Exhibit 4.3
890 5th AVENUE PARTNERS, INC. AND
WILMINGTON SAVINGS FUND SOCIETY, FSB,
as Trustee
INDENTURE
Dated as of December 3, 2021
8.50% Convertible Senior Notes due 2026
Table of Contents
| Page | ||
| Article 1 DEFINITIONS | 1 | |
| Section 1.01 | Definitions | 1 |
| Section 1.02 | Divisions | 25 |
| Article 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES | 25 | |
| Section 2.01 | Designation and Amount | 25 |
| Section 2.02 | Form of Notes | 25 |
| Section 2.03 | Date and Denomination of Notes; Payments of Interest and Defaulted Amounts | 26 |
| Section 2.04 | Execution, Authentication and Delivery of Notes | 28 |
| Section 2.05 | Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary | 28 |
| Section 2.06 | Mutilated, Destroyed, Lost or Stolen Notes | 34 |
| Section 2.07 | Temporary Notes | 35 |
| Section 2.08 | Cancellation of Notes Paid, Converted, Etc. | 35 |
| Section 2.09 | CUSIP Numbers | 35 |
| Article 3 SATISFACTION AND DISCHARGE | 35 | |
| Section 3.01 | Satisfaction and Discharge | 35 |
| Article 4 PARTICULAR COVENANTS OF THE COMPANY | 36 | |
| Section 4.01 | Payment of Principal and Interest | 36 |
| Section 4.02 | Maintenance of Office or Agency | 36 |
| Section 4.03 | Appointments to Fill Vacancies in Trustee’s Office | 37 |
| Section 4.04 | Provisions as to Paying Agent | 37 |
| Section 4.05 | Corporate Existence | 38 |
| Section 4.06 | Rule 144A Information Requirement and Annual Reports | 38 |
| Section 4.07 | Stay, Extension and Usury Laws | 39 |
| Section 4.08 | Compliance Certificate; Statements as to Defaults | 39 |
| Section 4.09 | Registration Rights | 39 |
| Section 4.10 | [Reserved] | 39 |
| Section 4.11 | Payment of Taxes | 39 |
| Section 4.12 | Further Instruments and Acts | 39 |
| Section 4.13 | Restricted Payments. | 39 |
| Section 4.14 | Incurrence of Indebtedness and Issuance of Preferred Stock | 42 |
| Section 4.15 | Liens | 45 |
| Section 4.16 | Dividend and Other Payment Restrictions Affecting Subsidiaries | 45 |
| Section 4.17 | Transactions with Affiliates | 47 |
| Section 4.18 | Asset Sales | 48 |
| Section 4.19 | Intellectual Property | 51 |
| Section 4.20 | Additional Note Guarantees | 51 |
| Article 5 LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE | 52 | |
| Section 5.01 | Lists of Holders | 52 |
| Section 5.02 | Preservation and Disclosure of Lists | 52 |
| Article 6 DEFAULTS AND REMEDIES | 52 | |
| Section 6.01 | Events of Default | 52 |
| Section 6.02 | Acceleration; Rescission and Annulment | 53 |
| Section 6.03 | [Reserved] | 54 |
| Section 6.04 | Payments of Notes on Default; Suit Therefor | 54 |
| Section 6.05 | Application of Monies Collected by Trustee | 55 |
| Section 6.06 | Proceedings by Holders | 56 |
| Section 6.07 | Proceedings by Trustee | 57 |
| Section 6.08 | Remedies Cumulative and Continuing | 57 |
| Section 6.09 | Direction of Proceedings and Waiver of Defaults by Majority of Holders | 57 |
| Section 6.10 | Notice of Defaults | 58 |
| Section 6.11 | Undertaking to Pay Costs | 58 |
| Article 7 CONCERNING THE TRUSTEE | 58 | |
| Section 7.01 | Duties and Responsibilities of Trustee | 58 |
| Section 7.02 | Reliance on Documents, Opinions, Etc. | 60 |
| Section 7.03 | No Responsibility for Recitals, Etc. | 61 |
| Section 7.04 | Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes | 61 |
| Section 7.05 | Monies and Shares of Common Stock to Be Held in Trust | 61 |
| Section 7.06 | Compensation and Expenses of Trustee | 62 |
| Section 7.07 | Officer’s Certificate as Evidence | 62 |
| Section 7.08 | Eligibility of Trustee | 62 |
| Section 7.09 | Resignation or Removal of Trustee | 63 |
| Section 7.10 | Acceptance by Successor Trustee | 64 |
| Section 7.11 | Succession by Merger, Etc. | 64 |
| Section 7.12 | Trustee’s Application for Instructions from the Company | 64 |
| Article 8 CONCERNING THE HOLDERS | 65 | |
| Section 8.01 | Action by Holders | 65 |
| Section 8.02 | Proof of Execution by Holders | 65 |
| Section 8.03 | Who Are Deemed Absolute Owners | 65 |
| Section 8.04 | Company-Owned Notes Disregarded | 66 |
| Section 8.05 | Revocation of Consents; Future Holders Bound | 66 |
| Article 9 HOLDERS’ MEETINGS | 66 | |
| Section 9.01 | Purpose of Meetings | 66 |
| Section 9.02 | Call of Meetings by Trustee | 66 |
| Section 9.03 | Call of Meetings by Company or Holders | 67 |
| Section 9.04 | Qualifications for Voting | 67 |
| Section 9.05 | Regulations | 67 |
| Section 9.06 | Voting | 68 |
| Section 9.07 | No Delay of Rights by Meeting | 68 |
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| Article 10 SUPPLEMENTAL INDENTURES | 68 | |
| Section 10.01 | Supplemental Indentures Without Consent of Holders | 68 |
| Section 10.02 | Supplemental Indentures with Consent of Holders | 69 |
| Section 10.03 | Effect of Supplemental Indentures | 70 |
| Section 10.04 | Notation on Notes | 70 |
| Section 10.05 | Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee | 70 |
| Article 11 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE | 71 | |
| Section 11.01 | Company May Consolidate, Etc. on Certain Terms | 71 |
| Section 11.02 | Successor Corporation to Be Substituted | 71 |
| Section 11.03 | Opinion of Counsel to Be Given to Trustee | 72 |
| Article 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS | 72 | |
| Section 12.01 | Indenture and Notes Solely Corporate Obligations | 72 |
| Article 13 GUARANTEES | 72 | |
| Section 13.01 | Guarantees | 72 |
| Section 13.02 | Execution and Delivery of Guarantee | 74 |
| Section 13.03 | Severability | 74 |
| Section 13.04 | Limitation of Guarantors’ Liability | 74 |
| Section 13.05 | Guarantors May Consolidate, Etc., on Certain Terms | 74 |
| Section 13.06 | Release of Guarantees | 75 |
| Section 13.07 | Benefits Acknowledged | 76 |
| Article 14 CONVERSION OF NOTES | 76 | |
| Section 14.01 | Conversion Privilege | 76 |
| Section 14.02 | Conversion Procedure; Settlement Upon Conversion | 76 |
| Section 14.03 | Company’s Mandatory Conversion Option | 80 |
| Section 14.04 | Adjustment of Conversion Rate | 81 |
| Section 14.05 | Adjustments of Prices | 89 |
| Section 14.06 | Shares to Be Fully Paid | 89 |
| Section 14.07 | Effect of Recapitalizations, Reclassifications and Changes of the Common Stock | 89 |
| Section 14.08 | Certain Covenants | 91 |
| Section 14.09 | Responsibility of Trustee | 91 |
| Section 14.10 | Notice to Holders Prior to Certain Actions | 91 |
| Section 14.11 | Stockholder Rights Plans | 92 |
| Section 14.12 | Exchange in Lieu of Conversion | 92 |
| Section 14.13 | [Reserved] | 93 |
| Section 14.14 | Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes or Mandatory Conversion | 93 |
| Article 15 REPURCHASE OF NOTES AT OPTION OF HOLDERS | 95 | |
| Section 15.01 | Repurchase at Option of Holders | 95 |
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| Section 15.02 | Repurchase at Option of Holders Upon a Fundamental Change | 95 |
| Section 15.03 | Withdrawal of Fundamental Change Repurchase Notice | 98 |
| Section 15.04 | Deposit of Fundamental Change Repurchase Price or Repurchase Price | 98 |
| Section 15.05 | Covenant to Comply with Applicable Laws Upon Repurchase of Notes | 99 |
| Article 16 NO REDEMPTION | 99 | |
| Section 16.01 | No Redemption | 99 |
| Article 17 MISCELLANEOUS PROVISIONS | 100 | |
| Section 17.01 | Provisions Binding on Company’s Successors | 100 |
| Section 17.02 | Official Acts by Successor Corporation | 100 |
| Section 17.03 | Addresses for Notices, Etc. | 100 |
| Section 17.04 | Governing Law; Jurisdiction | 100 |
| Section 17.05 | Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee | 101 |
| Section 17.06 | Legal Holidays | 101 |
| Section 17.07 | No Security Interest Created | 101 |
| Section 17.08 | Benefits of Indenture | 101 |
| Section 17.09 | Table of Contents, Headings, Etc | 102 |
| Section 17.10 | Authenticating Agent | 102 |
| Section 17.11 | Execution in Counterparts | 103 |
| Section 17.12 | Severability | 103 |
| Section 17.13 | Waiver of Jury Trial | 103 |
| Section 17.14 | Force Majeure | 103 |
| Section 17.15 | Calculations | 103 |
| Section 17.16 | USA PATRIOT Act | 104 |
| Section 17.17 | Tax Withholding | 104 |
EXHIBIT
| Exhibit A | Form of Note | A-1 |
| Exhibit B | Form of Notational Guarantee | B-1 |
| Exhibit C | List of Initial Subsidiary Guarantors | C-1 |
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INDENTURE, dated as of December 3, 2021, between 890 5TH Avenue Partners, Inc., a Delaware corporation, as issuer (the “Company,” as more fully set forth in Section 1.01) and Wilmington Savings Fund Society, FSB, as trustee (the “Trustee,” as more fully set forth in Section 1.01).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 8.50% Convertible Senior Notes due 2026 (the “Notes”), initially in an aggregate principal amount not to exceed $150,000,000, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided; and
WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as provided in this Indenture, the valid, binding and legal obligations of the Company, and this Indenture the valid, binding and legal agreement of the Company and the Trustee, have been done and performed, and the execution of this Indenture and the issuance hereunder of the Notes have in all respects been duly authorized.
WHEREAS, in connection with the Business Combination Agreement (as defined herein) the Company will be renamed BuzzFeed, Inc.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Notes (except as otherwise provided below), as follows:
Article
1
DEFINITIONS
Section 1.01 Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words “herein,” “hereof,” “hereunder” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article include the plural as well as the singular.
“ABL Collateral” means all assets of the Company or any of its Subsidiaries, whether now owned or hereafter acquired by the Company or any Subsidiary, that secures the ABL Facility.
“ABL Facility” means that certain Amended and Restated Loan and Security Agreement, dated as of December 3, 2021, by and among Buzzfeed Media Enterprises, Inc., as Administrative Borrower, BuzzFeed, Inc., Buzzfeed FC, Inc., BF Acquisition Holding Corp., Buzzfeed Motion Pictures, Inc., ET Acquisition Sub, Inc., ET Holdings Acquisition Corp., TheHuffingtonPost.com, Inc., Complex Media, Inc., CM Partners, LLC, Lexland Studios, Inc., and Product Labs, Inc., as Borrower, the Guarantors named therein, and White Oak Commercial Finance, LLC, as Administrative Agent, Swing Lender and Lender and the lenders from time to time party thereto (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time) or any refinancing, extension, renewal or replacement (or successive refinancing, extension, renewal or replacement) thereof in the form of an asset-based revolving credit facility (as the same may be amended, amended and restated, supplemented or otherwise modified from time to time).
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“Acquired Debt” means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, or to provide all or any portion of the funds or credit support utilized in connection with, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by an existing Lien encumbering any asset acquired by such specified Person.
“Additional Shares” shall have the meaning specified in Section 14.14(a).
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control,” when used with respect to any specified Person means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. Notwithstanding anything to the contrary herein, (x) the determination of whether one Person is an “Affiliate” of another Person for purposes of this Indenture shall be made based on the facts at the time such determination is made or required to be made, as the case may be, hereunder; and (y) no Person shall be an Affiliate of the Company solely by reason of owning the Notes.
“Applicable Procedures” means, with respect to a Depositary, as to any matter at any time, the policies and procedures of such Depositary, if any, that are applicable to such matter at such time.
“Asset Sale” means:
(1) the sale, lease, conveyance or other disposition of any properties or assets of the Company or its Subsidiaries (whether in a single transaction or a series of related transactions) (in each case, other than Capital Stock of the Company); provided, that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole will be governed by Section 11.01 hereof and not by Section 4.18 hereof; or
(2) the issuance or sale of Capital Stock in any of the Company’s Subsidiaries (whether in a single transaction or a series of related transactions) (other than Preferred stock of Subsidiaries issued in compliance with Section 4.14 and directors’ qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Subsidiary).
Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:
(a) damaged, obsolete or worn out assets, and scrap, in each case disposed of in the ordinary course of business,
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(b) Permitted Liens, Cash Equivalents and Permitted Investments or Restricted Payments not prohibited by Section 4.13,
(c) sales and licenses of products and licenses of Intellectual Property in the ordinary course of business to bona fide non-Affiliated third parties,
(d) licenses and sublicenses to bona fide non-Affiliated third parties for the use of the property of the Company or its Subsidiaries in the ordinary course of business,
(e) leases or subleases of property of the Company or its Subsidiaries in the ordinary course of business,
(f) dispositions or discounting of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business and exclusive of factoring or similar arrangements,
(g) any abandonment, failure to renew, or other disposition in the ordinary course of business of Intellectual Property that is, in the reasonable good faith determination of the Company, not material to the conduct of the business of the Company or any Subsidiary of the Company,
(h) deposits of copies of source code and release of such copies of source code pursuant to escrow arrangements entered into in the ordinary course of business and consistent with past practices, provided that any such deposit does not result in the permanent transfer of ownership of such source code,
(i) sales of inventory in the ordinary course of business,
(j) dispositions by a Subsidiary to the Company or by the Company or a Subsidiary to a Subsidiary in the ordinary course of business,
(k) sales, transfers and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between the joint venture parties set forth in joint venture agreements,
(l) any surrender or waiver of contract rights or the settlement, release or sunder of contract rights or other litigation claims in the ordinary course of business,
(m) any exchange of like property for use in a Permitted Business; provided that the property received in such exchange has a fair market value at least equal to the property being sold, transferred or disposed,
(n) dispositions between or among the Company and any Guarantor,
(o) dispositions of Products in the ordinary course of business, and
(p) any sale, transfer or other disposition or series of related sales, transfers or other dispositions having a value not in excess of $5,000,000.
“Asset Sale Offer” means an Offer to Purchase required to be made by the Company pursuant to Section 4.18 to all Holders.
“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.
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“Board of Directors” means the board of directors of the Company or a committee of such board duly authorized to act for it hereunder.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Combination Agreement” means that certain Agreement and Plan of Merger, dated as of June 24, 2021, among the Company, Bolt Merger Sub I, Inc., a Delaware corporation and wholly-owned subsidiary of the Company, Bolt Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of the Company, and BuzzFeed, Inc., a Delaware corporation, and as the same may be amended prior to the Closing Date.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity; provided that debt securities that are convertible into or exchangeable for Capital Stock shall not constitute Capital Stock prior to their conversion or exchange, as the case may be.
“Capitalized Lease Obligation” means any rental obligation which, under GAAP, is or will be required to be capitalized on the books of the lessee, taken at the amount thereof accounted for as Indebtedness (net of all interest with respect to such Indebtedness (including, without limitation, the interest component of Capitalized Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period) determined in accordance with GAAP)) in accordance with GAAP.
“Cash Equivalents” means (i) securities issued, guaranteed or insured by the United States of America or any of its agencies with maturities of not more than one year from the date acquired; (ii) certificates of deposit with maturities of not more than one year from the date acquired, issued by any U.S. federal or state chartered commercial bank of recognized standing which has capital and unimpaired surplus in excess of $500,000,000, or any bank or its holding company that has a short-term commercial paper rating of at least A-1 or the equivalent by Standard & Poor’s Ratings Services or at least P-1 or the equivalent by Moody’s Investors Service, Inc.; (iii) repurchase agreements and reverse repurchase agreements with terms of not more than seven days from the date acquired, for securities of the type described in clause (i) above and entered into only with commercial banks having the qualifications described in clause (ii) above or such other financial institutions with a short-term commercial paper rating of at least A-1 or the equivalent by Standard & Poor’s Ratings Services or at least P-1 or the equivalent by Moody’s Investors Service, Inc.; (iv) commercial paper issued by any Person incorporated under the laws of the United States of America or any state thereof and rated at least A-1 or the equivalent thereof by Standard & Poor’s Ratings Services or at least P-1 or the equivalent thereof by Moody’s Investors Service, Inc., in each case with maturities of not more than one year from the date acquired; (v) investments in money market funds registered under the Investment Company Act of 1940, which have net assets of at least $500,000,000 and at least eighty-five percent (85%) of whose assets consist of securities and other obligations of the type described in clauses (i) through (iv) above; and (vi) such other investments similar to those described in clauses (i) through (v) above in liquid assets that are permitted pursuant to the Company’s investment policy as approved by the Company’s board of directors.
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“Clause A Distribution” shall have the meaning specified in Section 14.04(c). “Clause B Distribution” shall have the meaning specified in Section 14.04(c). “Clause C Distribution” shall have the meaning specified in Section 14.04(c). “close of business” means 5:00 p.m. (New York City time).
“Closing Date” means December 3, 2021.
“Commission” means the U.S. Securities and Exchange Commission.
“Common Equity” of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
“Common Stock” means the Class A Common Stock of the Company, par value $0.0001 per share, at the date of this Indenture, subject to Section 14.07.
“Company” shall have the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article 11, shall include its successors and assigns.
“Company Mandatory Conversion Condition” means the conditions required for the Company to cause Notes to be converted pursuant to Section 14.03(a).
“Company Mandatory Conversion Right” means a conversion right pursuant to Section 14.03(a).
“Company Order” means a written order of the Company, signed on behalf of the Company by an Officer and delivered to the Trustee.
“Complex” means CM Partners, LLC.
“Complex Acquisition Closing Date” means the closing date of the acquisition of Complex by the Company.
“Complex Networks Acquisition Agreement” means that certain Membership Interest Purchase Agreement, dated as of March 27, 2021 among BuzzFeed, Inc., CM Partners, LLC, a Delaware limited liability company, Complex Media, Inc., a Delaware corporation, Verizon CMP Holdings LLC, a Delaware limited liability company, and HDS II, Inc., a Delaware corporation and as the same may be amended prior to the Closing Date.
“Consolidated Adjusted EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person and its Subsidiaries plus, without duplication and solely to the extent deducted in calculating Consolidated Net Income of such Person for such period (including by reducing consolidated net income (or loss) as calculated in accordance with GAAP for the applicable period), the sum of:
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(a) provisions for taxes based on income (or similar taxes in lieu of income taxes), profits or capital (or equivalents), including federal, foreign, state, local, franchise, excise and similar taxes and foreign withholding taxes paid or accrued during such period, including any penalties and interest relating to such taxes or arising from any tax examinations,
(b) Consolidated Interest Expense,
(c) depreciation and amortization expense determined in accordance with GAAP, and
(d) other stock-based and other equity-based compensation expenses; provided, that with respect to any four-fiscal quarter period, such addback pursuant to this clause (d) shall not exceed 2.5% of the aggregate operating expenses of the Company and its Subsidiaries (the “Operating Expense Cap”); provided, further, that, if a four-fiscal quarter period includes any quarterly period ending on or before March 31, 2022, stock-based and other equity-based compensation expenses incurred during such quarterly periods ending on or before March 31, 2022 shall not be subject to the Operating Expense Cap and the Operating Expense Cap shall only apply to the portion of the four fiscal quarter period commencing on April 1, 2022; provided, that for purposes of calculating Consolidated Adjusted EBITDA of the Company and its Subsidiaries for any period, (A) the Consolidated Adjusted EBITDA of any Person or assets constituting a division or line of business of any business entity, division or line of business, in each case, acquired by the Company or any of the Subsidiaries during such period, shall be included on a pro forma basis for such period assuming the consummation of such acquisition had occurred on the first day of such period, provided, that the Company may exclude historical periods of Complex ended prior to the Complex Acquisition Closing Date that would otherwise be included on a pro forma basis in the calculation of Consolidated Adjusted EBITDA and (B) the Consolidated Adjusted EBITDA of any Person or assets constituting a division or line of business of any business entity, division or line of business, in each case, disposed of by the Company or any of the Subsidiaries during such period shall be excluded for such period (assuming the consummation of such disposition had occurred on the first day of such period), in each case, calculated in accordance with Regulation S-X. With respect to each joint venture or minority investee of the Company or any of its Subsidiaries, for purposes of calculating Consolidated Adjusted EBITDA, the amount of Consolidated Adjusted EBITDA (calculated in accordance with this definition) attributable to such joint venture or minority investee, as applicable, that shall be counted for such purposes (without duplication of amounts already included in Consolidated Net Income) shall equal the amount thereof actually distributed to the Company or any Subsidiary. Unless otherwise qualified, all references to “Consolidated Adjusted EBITDA” in this Agreement shall refer to Consolidated Adjusted EBITDA of the Company and its Subsidiaries. In no event shall Consolidated Adjusted EBITDA include any run-rate metrics, including, without limitation, run-rate synergies or cost-savings.
For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Company.
“Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the sum of:
(a) consolidated interest expense of such Person and its Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers’ acceptances, (c) non-cash interest expense (but excluding any non-cash interest expense attributable to the movement in the mark-to-market valuation of hedging obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations and (e) net payments, if any, pursuant to interest rate hedging obligations with respect to Indebtedness, and excluding (v) accretion or accrual of discounted liabilities not constituting Indebtedness, (w) any expense resulting from the discounting of Indebtedness in connection with the application of recapitalization accounting or, if applicable, purchase accounting, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and (y) any expensing of bridge, commitment and other financing fees; plus
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(b) consolidated capitalized interest of such Person and its Subsidiaries for such period, whether paid or accrued; less
(c) interest income of such Person and its Subsidiaries for such period.
“Consolidated Net Income” means, with respect to any Person for any period, the consolidated net income (or loss) of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided, that in calculating Consolidated Net Income of the Company and its consolidated Subsidiaries for any period, there shall be excluded:
(a) costs, charges, accruals, reserves or expenses attributable to cost savings initiatives, operating expense reductions, transition, opening and pre-opening expenses, business optimization, management changes, restructurings or other restructuring charges and integrations (including inventory optimization programs, software and other intellectual property development costs, costs related to the closure or consolidation of facilities and curtailments, costs related to entry into new markets, consulting fees, signing costs, retention or completion bonuses, relocation expenses, severance payments, and modifications to pension and post-retirement employee benefit plans, new systems design and implementation costs and project startup costs) or other fees relating to any of the foregoing; provided, that amounts increasing Consolidated Net Income pursuant to this clause (a) shall not exceed $3.5 million for any consecutive four-fiscal quarter period,
(b) any severance expenses and site-closure expenses incurred in connection with an acquisition to the extent incurred as part of, or within one year from the closing of, such acquisition,
(c) any net after-tax losses (or net after-tax gains) with respect to Asset Sales or other dispositions of properties or assets of the Company or its Subsidiaries,
(d) minority interest expense attributable to minority equity interests of third parties in any non-wholly owned entity,
(e) any net unrealized gains and losses resulting from currency translation,
(f) adjustments for non-cash gains and non-cash write downs,
(g) any net loss from disposed or discontinued operations, losses or sales, disposals or abandonment of, or any impairment charges or asset write-down or write-off related to, intangible assets, long-lived assets and investments in debt and equity securities, and
(h) any fees, expenses or charges incurred in connection with any acquisition (to the extent consummated) and customary transaction expenses incurred in Fiscal Year 2021 and the first Fiscal Quarter of 2022 with respect to this Indenture, any Note or any of the Transactions.
“Consolidated Total Assets” means, as of any date of determination, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated balance sheet of the Company; provided, that solely for purposes of Section 4.14(b)(1), (x) goodwill, patents and trademarks shall be excluded from the calculation of Consolidated Total Assets and (y) the Consolidated Total Assets of Subsidiaries of the Company that are not wholly-owned Subsidiaries of the Company shall only be included on a pro rata basis in proportion to the ownership of such Subsidiary by the Company.
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“Consolidated Total Debt” means, with respect to any Person as of any date of determination, the sum, without duplication, of (i) the total amount of Indebtedness of such Person and its Subsidiaries (excluding intercompany Indebtedness as of such date) plus (ii) the aggregate liquidation value of all Disqualified Capital Stock of such Person and of the Subsidiaries of such Person and all Preferred Stock of the Subsidiaries of such Person, in each case, determined on a consolidated basis in accordance with GAAP; provided, that with respect to any revolving credit facility (including the ABL Facility) the Consolidated Total Debt thereof shall be deemed to be the full amount of the commitments thereunder; provided, further, that with respect to any ABL Facility incurred pursuant to clause (i) of the definition of Permitted Debt, the Consolidated Total Debt thereof shall be the full aggregate principal amount that could be incurred under clause (x) of such clause (i) or, to the extent that the commitments under the ABL Facility have been increased above $50 million, clause (y) of such clause (i) regardless of the aggregate principal amount of such Indebtedness that is outstanding at any such time of determination.
“Consolidated Total Leverage Ratio” with respect to any Person, as of any date, means the ratio of (a) Consolidated Total Debt of such Person as of such date to (b) Consolidated Adjusted EBITDA of such Person for the four most-recent full fiscal quarters for which internal financial statements prepared in accordance with GAAP are available immediately preceding such date. In the event that the Company or any of its Subsidiaries incurs or redeems, repurchases or otherwise discharges any Indebtedness subsequent to the period for which the Consolidated Total Leverage Ratio is being calculated but prior to the event for which the calculation of the Consolidated Total Leverage Ratio is made, then the Consolidated Total Leverage Ratio shall be calculated giving pro forma effect to such incurrence or redemption, repurchase or discharge of Indebtedness as if the same had occurred at the beginning of the applicable four fiscal quarter period.
“Conversion Agent” shall have the meaning specified in Section 4.02. “Conversion Date” shall have the meaning specified in Section 14.02(c). “Conversion Obligation” shall have the meaning specified in Section 14.01(a).
“Conversion Price” means as of any time, $1,000 divided by the Conversion Rate as of such time. “Conversion Rate” shall have the meaning specified in Section 14.01.
“Corporate Trust Office” means the corporate trust office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 500 Delaware Avenue, Wilmington, DE 19801, Attn: John McNichol, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).
“Custodian” means the Trustee, as custodian for The Depository Trust Company, with respect to the Global Notes, or any successor entity thereto.
“Daily Conversion Value” shall mean, for each of the 30 consecutive Trading Days during the Observation Period, one-thirtieth (1/30th) of the product of (a) the Conversion Rate on such Trading Day and (b) the Daily VWAP on such Trading Day.
“Daily Measurement Value” means the Specified Dollar Amount (if any) divided by 30.
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“Daily Settlement Amount” shall mean, for each of the 30 consecutive Trading Days during the relevant Observation Period:
(a) cash in an amount equal to the lesser of (i) the Daily Measurement Value and (ii) the Daily Conversion Value on such Trading Day; and
(b) if the Daily Conversion Value on such Trading Day exceeds the Daily Measurement Value, a number of shares of Common Stock equal to (i) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP for such Trading Day.
“Daily VWAP” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “BZFD <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.
“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Fundamental Change Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for, subject to any applicable cure periods.
“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(b) as the Depositary with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include such successor.
“Designated Non−cash Consideration” means the fair market value of non−cash consideration received by the Company or one of its Subsidiaries in connection with an Asset Sale that is so designated as “Designated Non−cash Consideration” pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent sale or other disposition of or conversion of or collection on such Designated Non−cash Consideration.
“Disqualified Capital Stock” means Capital Stock that (a) requires the payment of any dividends (other than dividends payable solely in shares of Qualified Capital Stock), (b) matures or is mandatorily redeemable or subject to mandatory repurchase or redemption or repurchase at the option of the holders thereof (other than solely for Qualified Capital Stock and cash in lieu of fractional shares of such Qualified Capital Stock), in each case in whole or in part and whether upon the occurrence of any event, pursuant to a sinking fund obligation on a fixed date or otherwise (including as the result of a failure to maintain or achieve any financial performance standards) or (c) is convertible or exchangeable, automatically or at the option of any holder thereof, into any Indebtedness, Capital Stock or other assets other than Qualified Capital Stock, in the case of each of clauses (a), (b) and (c), prior to the date that is 91 days after the Maturity Date (other than (i) upon payment in full of the Notes or (ii) upon an “asset sale” or a “change in control”; provided, that any payment required pursuant to this clause (ii) is subject to the compliance by the relevant Person with this Indenture, including Sections 4.18 or 15.02, as applicable); provided, further, however, that (x) only the portion of Capital Stock which so matures or is mandatorily redeemable or subject to mandatory repurchase or redemption at the option of the holder thereof or is so convertible or exchangeable prior to such date shall be deemed to be Disqualified Capital Stock and (y) if such Capital Stock is issued to any current or former employee, director, officer, manager or consultant or to any plan for the benefit of current or former employees, directors, officers, managers or consultants of the Company or its Subsidiaries or by any such plan to such employees, directors, officers, managers or consultants, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the Company or a Subsidiary in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability.
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“Distributed Property” shall have the meaning specified in Section 14.04(c).
“Domestic Subsidiary” means any direct or indirect Subsidiary of the Company that was formed under the laws of the United States, any state of the United States or the District of Columbia.
“Effective Date” shall have the meaning specified in Section 14.14(b), except that, as used in Section 14.04 and Section 14.05, “Effective Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable. For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of shares of the Common Stock under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.
“Eligible Market” means The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ Capital Market (or any of their respective successors).
“Equity Conditions” means, with respect to any given date of determination: (i) on each day during the period beginning thirty (30) calendar days prior to such applicable date of determination and ending on and including such applicable date of determination (the “Equity Conditions Measuring Period”) either (x) one or more registration statements filed with the Commission pursuant to the Registration Rights Agreement shall be effective and the prospectus contained therein shall be available on such applicable date of determination for the resale of all shares of Common Stock to be issued in connection with the event requiring this determination (a “Required Minimum Securities Amount”) or (y) all shares of Common Stock issuable upon conversion of the applicable Notes shall be eligible for sale pursuant to Rule 144 of the Securities Act (without volume or manner of sale limitations), without the need for registration under any applicable federal or state securities laws and, to the extent then required pursuant to Rule 144 of the Securities Act, the Company is then current with its filings with the Commission; (ii) on each day during the Equity Conditions Measuring Period, the Common Stock is listed or designated for quotation (as applicable) on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting occurring after giving effect to all applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as evidenced by (A) a writing by such Eligible Market or (B) the Company falling below the minimum listing maintenance requirements of the Eligible Market on which the Common Stock is then listed or designated for quotation, as applicable; (iii) on the applicable date of determination, any shares of Common Stock to be issued in connection with the event requiring determination may be issued in full from the authorized and available shares of Common Stock of the Company and without violating the rules or regulations of the Eligible Market on which the Common Stock is then listed or designated for quotation (as applicable); (iv) on each day during the Equity Conditions Measuring Period, no public announcement by or on behalf of the Company of a pending, proposed or intended Fundamental Change (as defined in the Indenture) shall have occurred which has not been abandoned, terminated or consummated; (v) there shall not have occurred any Volume Failure as of such applicable date of determination (the “Volume Condition”); (vi) on the applicable date of determination, there shall not have occurred and there shall not exist a Default; (vii) the Company shall have no knowledge of any fact that would reasonably be expected to cause any registration statement required to be filed with the Commission pursuant to the Registration Rights Agreement to not be effective or the prospectus contained therein to not be available for the resale of the applicable Required Minimum Securities Amount of all shares of Common Stock issuable upon conversion of the applicable Notes in accordance with the terms of the Registration Rights Agreement and (viii) the shares of Common Stock issuable pursuant to the event requiring the satisfaction of the Equity Conditions are duly authorized and, upon issuance, will be listed and eligible for trading on an Eligible Market.
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“Equity Conditions Failure” means, with respect to any date of determination, the Equity Conditions have not been satisfied (or waived in writing by the applicable Holder).
“Equity Conditions Measuring Period” shall have the meaning specified in the definition of “Equity Conditions.”
“Event of Default” shall have the meaning specified in Section 6.01.
“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market. For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of shares of the Common Stock under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exchange Election” shall have the meaning specified in Section 14.12.
“Excluded Subsidiary” means any Subsidiary that is (a) a Foreign Subsidiary or a FSHCO, (b) a non-wholly owned Subsidiary that is not permitted to guarantee the Notes by its organizational documents, including any applicable equityholder agreement, or applicable law or regulation, or (c) an Immaterial Subsidiary.
“Expiration Date” shall have the meaning specified in Section 14.04(e).
“Foreign Subsidiary” means any Subsidiary of the Company that is not a Domestic Subsidiary. “Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.
“Form of Fundamental Change Repurchase Notice” means the “Form of Fundamental Change Repurchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.
“Form of Note” means the “Form of Note” attached hereto as Exhibit A.
“Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.
“Founder” means each of (a) Jonah Peretti, (b) any trust, individual retirement account, or business entity (including any corporation, limited liability company, partnership, foundation or similar entity) for which Jonah Peretti retains sole voting and dispositive power with respect to the Common Equity held by such trust, individual retirement account, or business entity, and the trustees, legal representatives, beneficiaries and/or beneficial owners of such trust, individual retirement account or business entity, and
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(c) the estate, heirs and lineal descendants of Jonah Peretti.
“FSHCO” means any direct or indirect Domestic Subsidiary substantially all of the assets of which consist of the equity and/or indebtedness treated as equity for U.S. federal income tax purposes, of one or more Foreign Subsidiaries.
“Fundamental Change” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs prior to the Maturity Date:
(a) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company and its wholly owned Subsidiaries or a Permitted Holder, files a Schedule TO (or any successor schedule, form or report) or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Common Equity representing more than 50% of the voting power of the Common Equity; provided that no “person” or “group” shall be deemed to be the beneficial owner of any securities tendered pursuant to a tender or exchange offer made by or on behalf of such “person” or “group” until such tendered securities are accepted for purchase or exchange under such offer;
(b) the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination or changes solely in par value) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or assets; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one or more of the Company’s direct or indirect wholly owned Subsidiaries; provided, however, that neither (x) a transaction described in clause (A) or (B) in which the holders of all classes of the Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions (relative to each other) as such ownership immediately prior to such transaction nor (y) any merger of the Company solely for the purpose of changing its jurisdiction of incorporation that results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock of the surviving entity shall be a Fundamental Change pursuant to this clause (b);
(c) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or
(d) the Common Stock (or other Common Equity underlying the Notes) ceases to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ Capital Market (or any of their respective successors);
provided, however, that a transaction or transactions described in clauses (a) or (b) above shall not constitute a Fundamental Change, if at least 90% of the consideration received or to be received by the common stockholders of the Company, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ Capital Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions such consideration becomes Reference Property for the Notes, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights (subject to the provisions of Section 14.02(a)). Any event, transaction or series of related transactions that constitute a Fundamental Change under both clause (a) and clause (b) above (determined without regard to the proviso in clause (b) above) shall be deemed to be a Fundamental Change solely under clause (b) above (and, for the avoidance of doubt, shall be subject to the proviso in clause (b) above). If any transaction in which the Common Stock is replaced by the equity securities of another entity occurs, references to the Company in this definition shall instead be references to such other entity.
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“Fundamental Change Company Notice” shall have the meaning specified in Section 15.02(c).
“Fundamental Change Repurchase Date” shall have the meaning specified in Section 15.02(a). “Fundamental Change Repurchase Notice” shall have the meaning specified in Section 15.02(b)(i).
“Fundamental Change Repurchase Price” shall have the meaning specified in Section 15.02(a).
“GAAP” means generally accepted accounting principles in the United States in effect on the Closing Date, except that (i) with respect to any reports or financial information required to be delivered pursuant to Section 4.6, GAAP means generally accepted accounting principles in the United States as in effect during the applicable period covered by such report or financial information and (ii) any lease that would not be considered a capital lease pursuant to GAAP prior to the effectiveness of Accounting Standards Codification 842 (whether or not such lease was in effect on such date) shall be treated as an operating lease for all purposes under the Indenture and shall not be deemed to constitute a capitalized lease or Indebtedness thereunder.
“Global Note” shall have the meaning specified in Section 2.05(b).
“guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness or other obligations. When used as a verb, “guarantee” shall have a corresponding meaning.
“Guarantee” means any guarantee of the obligations of the Company under this Indenture and the Notes by a Guarantor in accordance with Article 13. When used as a verb, “Guarantee” shall have a corresponding meaning.
“Guarantor” means any Person that incurs a Guarantee of the Notes; provided that upon the release and discharge of such Person from its Guarantee in accordance with Section 13.6, such Person shall cease to be a Guarantor.
“Group” means a “group” as that term is used in Section 13(d) of the Exchange Act and as defined in Rule 13d-5 thereunder.
“Holder”, as applied to any Note, or other similar terms, means any Person in whose name at the time a particular Note is registered on the Note Register (and in the case of a Global Note and solely with respect to Section 6.12, the indirect holder of Notes held through its participant).
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“Immaterial Subsidiary” means, as of any date of determination, any Subsidiary of the Company the Consolidated Adjusted EBITDA and Consolidated Total Assets of which does not exceed three and three quarters percent (3.75%) of the Consolidated Adjusted EBITDA and Consolidated Total Assets of the Company and its Subsidiaries, taken as a whole, as set forth in the financial statements most recently delivered pursuant to Section 4.06; provided, that if all Immaterial Subsidiaries taken together in the aggregate have Consolidated Adjusted EBITDA or Consolidated Total Assets that exceed seven and one half percent (7.5%) of the Consolidated Adjusted EBITDA or Consolidated Total Assets of the Company and its Subsidiaries, taken as a whole, as set forth in the financial statements most recently delivered pursuant to Section 4.06, then the Company shall designate one or more Immaterial Subsidiaries as Guarantors as may be necessary, such that the Immaterial Subsidiaries in the aggregate have Consolidated Adjusted EBITDA and Consolidated Total Assets that are equal to or less than seven and one half percent (7.5%) of the Consolidated Adjusted EBITDA and Consolidated Total Assets of the Company and its Subsidiaries, taken as a whole, as set forth in the financial statements most recently delivered pursuant to Section 4.06.
“Indebtedness” of any Person, means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person for the deferred purchase price of Property or services already received, (d) all guarantee Obligations by such Person of Indebtedness of others, (e) all Capitalized Lease Obligations of such Person and (f) the principal component of all obligations, contingent or otherwise, of such Person (i) as an account party in respect of letters of credit and (ii) in respect of bankers’ acceptances; provided, that Indebtedness shall not include (A) trade and other payables, accrued expenses and liabilities and intercompany liabilities arising in the ordinary course of business, (B) prepaid or deferred revenue arising in the ordinary course of business, (C) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy unperformed obligations of the seller of such asset, (D) earn-out and other contingent obligations until such obligations become a liability on the balance sheet of such Person in accordance with GAAP and (E) obligations owing under any hedging agreements or cash management obligations. The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner, other than to the extent that the instrument or agreement evidencing such Indebtedness expressly limits the liability of such Person in respect thereof (or provides for reimbursement to such Person).
“Indenture” means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.
“Intellectual Property” means any and all rights in, arising out of, or associated with any of the following in any jurisdiction throughout the world: (a) issued patents and patent applications (whether provisional or non-provisional), including divisionals, continuations, continuations-in-part, substitutions, reissues, reexaminations, extensions, or restorations of any of the foregoing; (b) trademarks, service marks, brands, certification marks, logos, trade dress, trade names, and other similar indicia of source or origin, together with the goodwill connected with the use of and symbolized by, and all registrations, applications for registration, and renewals of, any of the foregoing; (c) copyrights and works of authorship, whether or not copyrightable, and all registrations, applications for registration, and renewals of any of the foregoing; (d) internet domain names and social media account or user names (including “handles”), whether or not trademarks, all associated web addresses, URLs, websites and web pages, social media sites and pages, and all content and data thereon or relating thereto, whether or not copyrights; (e) mask works, and all registrations, applications for registration, and renewals thereof; (f) product designs, industrial designs, blueprints, drawings, specifications, documentations, programming materials, reports, catalogs, literature and all registrations, applications for registration, and renewals therefor; (g) trade secrets, know-how, inventions (whether or not patentable), discoveries, improvements, technology, business and technical information, databases, data compilations and collections, tools, methods, processes, techniques, and other confidential and proprietary information and all rights therein; (h) computer programs, operating systems, applications, firmware and other code, including all source code, object code, application programming interfaces, data files, databases, protocols, specifications, and other documentation thereof; (i) rights of publicity; and (j) all other intellectual or industrial property and proprietary rights, together with all royalties, fees, income, payments, and other proceeds now or hereafter due or payable to with respect to any of the foregoing, and all claims and causes of action with respect to any of the foregoing whether accruing before, on, or after the date hereof including all rights to and claims for damages, restitution, and injunctive and other legal or equitable relief for past, present, or future infringement, misappropriation, or other violation thereof.
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“Interest Make-Whole Amount” means, with respect to the conversion of any Note pursuant to Section 14.01, an amount denominated in U.S. dollars as set forth below (expressed as a percentage of the aggregate principal amount of Notes so converted). The Company acknowledges that it will not treat the Notes as a contingent payment debt instrument to which Treas. Reg. §1.1275-4 applies unless, based on the advice of tax counsel to the Company and after written notice to the Holders, otherwise required by a change in or clarification to applicable law after the date of this Indenture.
| Conversion Date | Percentage | |||
| From (and including) December 3, 2022 to (but excluding) January 3, 2023 | 12.75 | % | ||
| From (and including) January 3, 2023 to (but excluding) February 3, 2023 | 12.40 | % | ||
| From (and including) February 3, 2023 to (but excluding) March 3, 2023 | 12.04 | % | ||
| From (and including) March 3, 2023 to (but excluding) April 3, 2023 | 11.69 | % | ||
| From (and including) April 3, 2023 to (but excluding) May 3, 2023 | 11.33 | % | ||
| From (and including) May 3, 2023 to (but excluding) June 3, 2023 | 10.98 | % | ||
| From (and including) June 3, 2023 to (but excluding) July 3, 2023 | 10.63 | % | ||
| From (and including) July 3, 2023 to (but excluding) August 3, 2023 | 10.27 | % | ||
| From (and including) August 3, 2023 to (but excluding) September 3, 2023 | 9.92 | % | ||
| From (and including) September 3, 2023 to (but excluding) October 3, 2023 | 9.56 | % | ||
| From (and including) October 3, 2023 to (but excluding) November 3, 2023 | 9.21 | % | ||
| From (and including) November 3, 2023 to (but excluding) December 3, 2023 | 8.85 | % | ||
| From (and including) December 3, 2023 to (but excluding) January 3, 2024 | 8.50 | % | ||
| From (and including) January 3, 2024 to (but excluding) February 3, 2024 | 7.79 | % | ||
| From (and including) February 3, 2024 to (but excluding) March 3, 2024 | 7.08 | % | ||
| From (and including) March 3, 2024 to (but excluding) April 3, 2024 | 6.38 | % | ||
| From (and including) April 3, 2024 to (but excluding) May 3, 2024 | 5.67 | % | ||
| From (and including) May 3, 2024 to (but excluding) June 3, 2024 | 4.96 | % | ||
| From (and including) June 3, 2024 to (but excluding) July 3, 2024 | 4.25 | % | ||
| From (and including) July 3, 2024 to (but excluding) August 3, 2024 | 3.54 | % | ||
| From (and including) August 3, 2024 to (but excluding) September 3, 2024 | 2.83 | % | ||
| From (and including) September 3, 2024 to (but excluding) October 3, 2024 | 2.13 | % | ||
| From (and including) October 3, 2024 to (but excluding) November 3, 2024 | 1.42 | % | ||
| From (and including) November 3, 2024 to (but excluding) December 3, 2024 | 0.71 | % | ||
| From (and including) December 3, 2024 and thereafter | 0 | % | ||
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“Interest Payment Date” means each June 15 and December 15 of each year, beginning on June 15, 2022.
“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including guarantees or other obligations), advances or capital contributions (including by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others, but excluding accounts receivable, trade credit, advances to customers, commissions, travel and similar advances to officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Capital Stock or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet (excluding the footnotes) of such Person in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. The amount of any Investment outstanding at any time shall be the amount actually invested (or, with respect to Investments other than in cash and Cash Equivalents, the fair market value (as determined in good faith by the Company) of such Investment at the time such Investment was made), reduced by any dividend, distribution, interest payment, return of capital, repayment or other amount received in cash by the Company or a Guarantor in respect of such Investment. If the Company or any Subsidiary of the Company sells or otherwise disposes of any Capital Stock of any direct or indirect Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Company, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Capital Stock of such Subsidiary not sold or disposed of in an amount determined as provided in the penultimate paragraph under Section 4.7.
“Last Reported Sale Price” of the Common Stock (or other security for which a closing sale price must be determined) on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or such other security) is traded. If the Common Stock (or such other security) is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the last quoted bid price per share for the Common Stock (or such other security) in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock (or such other security) is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices per share for the Common Stock (or such other security) on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. The “Last Reported Sale Price” shall be determined without regard to after-hours trading or any other trading outside of regular trading session hours.
“Lien” means any lien, claim, charge, pledge, security interest, assignment, hypothecation, deed of trust, mortgage, lease, conditional sale, retention of title or other preferential arrangement having substantially the same economic effect as any of the foregoing, whether voluntary or imposed by law.
“Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental Change (as defined above and determined after giving effect to any exceptions to or exclusions from such definition, but without regard to the proviso in clause (b) of the definition thereof).
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“Make-Whole Fundamental Change Period” shall have the meaning specified in Section 14.14(a).
“Mandatory Conversion” means a conversion pursuant to Section 14.03(a).
“Mandatory Conversion Date” means the Conversion Date for a Mandatory Conversion, as provided in Section 14.03(c).
“Market Disruption Event” means, for the purposes of determining amounts due upon conversion (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.
“Maturity Date” means December 3, 2026.
“Net Proceeds” means, with respect to any Asset Sale, the aggregate proceeds in cash or Cash Equivalents received by the Company or any of its Subsidiaries in respect thereof (including, without limitation, any cash or Cash Equivalents received upon the sale or other disposition of or conversion of or collection on any Designated Non−cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any non−cash form), net of the direct costs relating to such Asset Sale and the sale or other disposition of or conversion of or collection on such Designated Non−cash Consideration, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, amounts paid in connection with the termination of hedging obligations repaid with Net Proceeds, and amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale, all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures or to holders of royalty or similar interests as a result of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, including without limitation, pension and post−employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
“Note” or “Notes” shall have the meaning specified in the first paragraph of the recitals of this Indenture.
“Note Register” shall have the meaning specified in Section 2.05(a). “Note Registrar” shall have the meaning specified in Section 2.05(a).
“Notice of Conversion” shall have the meaning specified in Section 14.02(b).
“Observation Period” with respect to any Note surrendered for conversion means, the 30 consecutive Trading Day period beginning on, and including, the second Trading Day immediately succeeding such Conversion Date.
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“Officer” means, with respect to the Company, the President, the Chief Executive Officer, the Chief Financial Officer, the Treasurer, the Secretary, any assistant Treasurer, any assistant Secretary, General Counsel, any Assistant General Counsel, any Executive or Senior Vice President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”).
“Officer’s Certificate,” when used with respect to the Company, means a certificate that is delivered to the Trustee and that is signed on behalf of the Company by an Officer of the Company that meets the requirements of Section 17.05.
“open of business” means 9:00 a.m. (New York City time).
“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, that is delivered to the Trustee.
“Optional Repurchase Notice” shall have the meaning specified in Section 15.01. “outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 8.04,
mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or accepted by the Trustee for cancellation;
(b) Notes, or portions thereof, that have become due and payable and in respect of which monies in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent);
(c) Notes that have been paid pursuant to Section 2.06 or Notes in lieu of which, or in substitution for which, other Notes shall have been authenticated and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to the Trustee is presented that any such Notes are held by protected purchasers in due course;
(d) Notes surrendered for purchase in accordance with Article 15 for which the Paying Agent holds money sufficient to pay the Fundamental Change Repurchase Price, in accordance with Section 15.04(b);
(e) Notes converted pursuant to Article 14 and required to be cancelled pursuant to Section 2.08; and
(f) Notes repurchased by the Company pursuant to the last sentence of Section 2.10 after the Company surrenders them to the Trustee for cancellation in accordance with Section 2.08.
“Paying Agent” shall have the meaning specified in Section 4.02.
“Permitted Business” means (a) any business engaged in by the Company or any of its Subsidiaries on the Closing Date, and (b) any business or other activities that are reasonably similar, ancillary, complementary or related to, or a reasonable extension, development or expansion of, the businesses in which the Company and its Subsidiaries are engaged on the Closing Date.
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“Permitted Holders” means, collectively, (a) the Founder and (b) any Person or “group” (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which the Founder is a member of such Person or group; provided that, in the case of any such group and without giving effect to the existence of such group or any other group, the Persons referred to in subclause (a), collectively, have beneficial ownership or more than 50% of the total voting power of the Common Equity of the Company held by such Person or group.
“Permitted Investment” means
(a) Investments in Cash Equivalents;
(b) Investments existing on the Closing Date or made pursuant to binding commitments in effect on the Closing Date or an Investment consisting of any extension, modification or renewal of any such Investment or binding commitment existing on the Closing Date; provided that the amount of any such Investment may be increased in such extension, modification or renewal only (i) as required by the terms of such Investment or binding commitment as in existence on the Closing Date or (ii) as otherwise permitted under this Indenture;
(c) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;
(d) (x) Investments by the Company or any Subsidiary in the Company or any Guarantor; (y) Investments by the Company or any Subsidiary in the Company or any non-Guarantor Subsidiary in the ordinary course of business; and (z) any Investment in any Person or the assets of such Person if as a result of such Investment such Person becomes, or such assets would be held by, a direct or indirect Subsidiary of the Company;
(e) Investments in bona fide joint ventures and Investments in any Foreign Subsidiary of the Company and similar Investments; provided, that the Investments made pursuant to this clause (e) shall not in the aggregate exceed $20 million; provided, further, that intercompany loans made in the ordinary course of business are not subject to such limitation;
(f) Investments (A) constituting accounts arising, (B) constituting trade debt or credit granted,
(g) constituting deposits made, in connection with the purchase price of goods or services, in each case in the ordinary course of business or (D) received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent deemed prudent by the Person receiving such Investment and to the extent reasonably necessary in order to prevent or limit losses or in connection with the bankruptcy or reorganization of suppliers or customers and in settlement of delinquent obligations of, and other disputes with, suppliers or customers arising in the ordinary course of business;
(h) Investments consisting of any deferred portion of the sales price received in connection with any disposition or sale of assets;
(i) the maintenance of deposit accounts in the ordinary course of business;
(j) Investments consisting of (A) travel advances and employee relocation loans in the ordinary course of business, and (B) loans to employees, officers or directors;
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(k) Investments accepted in connection with dispositions not constituting an Asset Sale or that constitute an Asset Sale not prohibited by Section 4.18;
(l) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of the Company or any Subsidiary of the Company;
(m) joint ventures or strategic alliances in the ordinary course of Company’s business consisting of the licensing of technology, the development of technology or the providing of technical support; and
(n) other Investments in the aggregate for all Investments made pursuant to this clause (m) not to exceed $2.0 million.
“Permitted Liens” means the following types of Liens:
(a) Liens securing Indebtedness incurred pursuant to clause (i) of the definition of Permitted Debt;
(b) Liens existing on the Closing Date (other than Liens described in clause (a) of this definition);
(c) Liens for taxes, assessments and other governmental charges or levies or the claims or demands of landlords, carriers, warehousemen, mechanics, laborers, materialmen and other like Persons arising by operation of law in the ordinary course of business for sums which are not yet due and payable;
(d) deposits or pledges to secure the payment of worker’s compensation, unemployment insurance or other social security benefits or obligations, public or statutory obligations, surety or appeal bonds, bid or performance bonds, leases (other than Indebtedness), surety, stay, customers, indemnity or other obligations of a like nature incurred in the ordinary course of business;
(e) inchoate Liens arising under ERISA to secure current service pension liabilities as they are incurred under the provisions of employee benefit plans from time to time in effect;
(f) judgment Liens that have not otherwise resulted in an Event of Default;
(g) easements, rights-of-way, zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any material respect with the value or use of the property to which such Lien is attached;
(h) Liens for taxes, assessments or other governmental charges or levies not yet due and payable, or the non-payment of which is permitted under this Indenture;
(i) Liens arising in the ordinary course of business by virtue of any contractual, statutory or common law provision relating to banker’s Liens, rights of set-off or similar rights and remedies covering deposit or securities accounts (including funds or other assets credited thereto) or other funds maintained with a depository institution or securities intermediary;
(j) any interest or title of a lessor, licensor, sublicensor or sublessor under any lease, license, sublicense or sublease entered into by the Company or any of its Subsidiaries in the ordinary course of its business and covering only the assets so leased, or subleased;
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(k) leases, subleases, and non-exclusive licenses or sublicenses, in each case, granted in the ordinary course of business, and licenses and sublicenses that may be exclusive that are limited in scope and geography, in each case, for such consideration as is deemed to be fair by the Company in the ordinary course of business;
(l) precautionary Uniform Commercial Code filings made by a lessor pursuant to an operating lease of the Company or any Subsidiary of the Company entered into in the ordinary course of business;
(m) Liens of sellers of goods to such Person arising under Article II of the Uniform Commercial Code or similar provisions of applicable law in the ordinary course of business, covering only the goods sold or securing only the unpaid purchase price of such goods and related expenses to the extent such Indebtedness is permitted hereunder;
(n) Liens on insurance policies and the proceeds thereof securing the financing of premiums with respect thereto;
(o) Liens existing on property at the time of its acquisition or existing on the property of any Person at the time such Person becomes a Subsidiary; provided that (A) such Liens only encumber the assets of such Person, (B) such Lien was not created in contemplation of such acquisition or such Person becoming a Subsidiary, (C) such Lien does not extend to or cover any other assets or property of such Person (other than proceeds or products thereof) and (D) such Lien covers only specific property of such Person and is not a “blanket” Lien on any category or type of property;
(p) Liens solely on any cash collateral provided in respect of letter of credit facilities issued or bank guarantees in each case, including any letters of credit issued to secure amounts owing under such bank guarantees or any letters of credit issued under a letter of credit agreement pursuant to the ABL Facility;
(q) Liens solely on any cash collateral provided in respect of cash management or treasury management services;
(r) other Liens with respect to which the aggregate amount of the obligations secured thereby does not exceed $500,000 at any time outstanding; and
(s) Liens securing Indebtedness permitted by Section 4.14(b)(v) incurred to finance the acquisition of fixed or capital assets, provided that (A) such Liens shall be created substantially simultaneously with the acquisition of such assets, (B) such Liens do not at any time encumber any assets other than the assets financed by such Indebtedness, (C) such Liens are not modified to secure other Indebtedness and the amount of Indebtedness secured thereby is not increased and (D) the principal amount of Indebtedness secured by any such Lien shall at no time exceed the original purchase price of such assets.
“Permitted Refinancing” means refinancings, replacements, modifications, refundings, renewals or extensions of Indebtedness; provided, that (a) there is no increase in the principal amount (or accreted value) thereof (except by an amount equal to accrued interest, fees, discounts, premiums (including reasonable tender premiums), penalties and expenses), (b) the weighted average life to maturity of such Indebtedness is greater than or equal to the weighted average life to maturity of the Indebtedness being refinanced (other than a shorter weighted average life to maturity for customary bridge financings, which, subject to customary conditions, would either be automatically converted into or required to be exchanged for permanent financing which does not provide for a shorter weighted average life to maturity than the weighted average life to maturity of the Indebtedness being refinanced), (c) immediately after giving effect to such refinancing, replacement, refunding, renewal or extension, no Event of Default shall be continuing and (d) no Subsidiary of the Company shall be an obligor or guarantor of any such refinancings, replacements, modifications, refundings, renewals or extensions except to the extent (x) that such Person was such an obligor or guarantor in respect of the applicable Indebtedness being modified, refinanced, replaced, refunded, renewed or extended or (y) such Person is, or substantially concurrently with any such refinancing, replacement, modification, refunding, renewal or extension becomes, a Guarantor.
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“Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.
“Physical Notes” means permanent certificated Notes in registered form issued in minimum denominations of $1,000 principal amount and integral multiples in excess thereof.
“Physical Settlement” shall have the meaning specified in Section 14.02(a).
“Physical Settlement Method” means, with respect to any conversion of Notes, the Physical Settlement.
“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.
“Preferred Stock” means any Capital Stock with preferential right of payment of dividends or upon liquidation, dissolution, winding up or some other event.
“Product” means (i) any motion picture, film, music or video or other audio-visual work or episode thereof, podcast or other audio-only work produced for theatrical, non-theatrical or television release or for exploitation in any other medium (including, without limitation, interactive media, multi-channel and digital platforms), and in all languages, in each case whether recorded on film, video, cassette, cartridge, disc or on or by any other means, method, process, format or device whether now known or hereafter devised, (ii) solely for purposes of Section 4.19, any book (including, without limitation, text, still photo and/or still illustration publications in the form of books, comic books, magazines, e-books, and other online publications, and audio recordings) or (iii) solely for purposes of Section 4.19, merchandise (including, without limitation, tangible consumer goods and/or services), in each case, with respect to which the Company or its Subsidiaries (1) is the copyright or other rights owner, or (2) acquires an equity interest or distribution, marketing or sales agency rights. The term “Product” shall include, without limitation, the scenario, screenplay, script, article, video, images, branding, icons, characters, copyrights or trademarks upon which such Product is based, all of the properties thereof, tangible and intangible, and whether now in existence or hereafter to be made or produced, whether or not in possession of the Company and its Subsidiaries, and all rights therein and thereto, of every kind and character.
“Qualified Capital Stock” means any Capital Stock other than Disqualified Capital Stock. “Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).
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“Reference Property” shall have the meaning specified in Section 14.07(a).
“Registrable Securities” shall have the meaning set forth in the Registration Rights Agreement. “Registration Rights Agreement” means, collectively, the Registration Rights Agreement, dated as of the Closing Date, each between the Company and each Holder defined therein.
“Regular Record Date,” with respect to any Interest Payment Date, means the June 1 or December 1 (whether or not such day is a Business Day) immediately preceding the applicable June 15 or December 15 Interest Payment Date, respectively.
“Repurchase Date” shall have the meaning specified in Section 15.01. “Repurchase Price” shall have the meaning specified in Section 15.01.
“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter relating to this Indenture is referred because of such person’s knowledge of and familiarity with the particular subject and, in each case, who shall have direct responsibility for the administration of this Indenture.
“Restricted Investment” means an Investment other than a Permitted Investment.
“Restricted Securities” shall have the meaning specified in Section 2.05(c). “Restrictive Legend” shall have the meaning specified in Section 2.05(d). “Rule 144” means Rule 144 as promulgated under the Securities Act.
“Rule 144A” means Rule 144A as promulgated under the Securities Act.
“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a Business Day.
“Secured Indebtedness” means any Indebtedness secured by a Lien.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Settlement Amount” has the meaning specified in Section 14.02(a)(iii).
“Settlement Method” means, with respect to any conversion of Notes, Physical Settlement, Cash Settlement or Combination Settlement, as elected (or deemed to have been elected) by the Company.
“Share Exchange Event” has the meaning specified in Section 14.07(a).
“Significant Subsidiary” means a Subsidiary of the Company that meets the definition of “significant subsidiary” in Article 1, Rule 1-02(w) of Regulation S-X under the Exchange Act as in effect on the date of this Indenture.
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“Specified Affiliates” means any of Verizon Communications, Inc., The Hearst Corporation and Comcast Corporation or any of their respective Affiliates.
“Specified Dollar Amount” means the maximum cash amount per $1,000 principal amount of Notes and $1,000 of interest thereon to be received upon conversion as specified in the Settlement Notice related to any converted Notes (excluding cash in lieu of any fractional shares of Common Stock).
“Specified Intellectual Property” means Intellectual Property with respect to the following brands: As/Is, BuzzFeed News, Bring Me!, Complex Networks, goodful, HuffPost, Nifty, Playfull, Tasty, HotOnes, Sole Collector, ComplexCon, Pigeons & Planes, Complex Collective, Complex Climate and Complex Shop.
“Spin-Off” shall have the meaning specified in Section 14.04(c). “Stock Price” shall have the meaning specified in Section 14.14(b).
“Subordinated Indebtedness” means Indebtedness incurred by the Company or any Guarantor that is subordinated in right and time of payment to all of the Company’s and/or such Guarantor’s obligations under this Indenture pursuant to a customary subordination, intercreditor or similar agreement, as certified by the Company to the Trustee.
“Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.
“Successor Company” shall have the meaning specified in Section 11.01(a).
“Trading Day” means a day on which (i) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded and (ii) a Last Reported Sale Price for the Common Stock (or closing sale price for such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, “Trading Day” means a Business Day; and provided, further, that for purposes of determining amounts due upon conversion only, “Trading Day” means a day on which (x) there is no Market Disruption Event and (y) trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, except that if the Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day.
“Transactions” means the transactions contemplated by the Business Combination Agreement and the Complex Networks Combination Agreement. For the avoidance of doubt, the Transactions shall not constitute a Fundamental Change, Article 11 shall not apply to the Transactions and the Transactions shall not result in an adjustment to the Conversion Rate.
“transfer” shall have the meaning specified in Section 2.05(c).
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“Trigger Event” shall have the meaning specified in Section 14.04(c).
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term “Trust Indenture Act” shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.
“unit of Reference Property” shall have the meaning specified in Section 14.07(a).
“Valuation Period” shall have the meaning specified in Section 14.04(c).
“Volume Failure” means, with respect to a particular date of determination, the average trading volume (as reported on Bloomberg) of the Common Stock on the Principal Market, excluding the Trading Days during such period with the highest and lowest trading volumes, respectively, during the consecutive twenty-two (22) Trading Days ending on the Trading Day immediately preceding such date of determination (such period, the “Volume Failure Measuring Period”), is less than 0.3% of the total issued and outstanding shares of Common Stock of the Company as of December 31, 2021. All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions after December 31, 2021 and prior to or during such Volume Failure Measuring Period.
“Wholly Owned Subsidiary” means, with respect to any Person, any direct or indirect Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%”, the calculation of which shall exclude nominal amounts of the voting power of shares of Capital Stock or other interests in the relevant Subsidiary not held by such person to the extent required to satisfy local minority interest requirements outside of the United States.
Section 1.02 Divisions. For all purposes under this Indenture, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its equity interests at such time.
Article
2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01 Designation and Amount. The Notes shall be designated as the “8.50% Convertible Senior Notes due 2026.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to $150,000,000, except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes to the extent expressly permitted hereunder.
Section 2.02 Form of Notes. The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, the terms and provisions of which shall constitute, and are hereby expressly incorporated in and made a part of this Indenture. To the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. In the case of any conflict between this Indenture and a Note, the provisions of this Indenture shall control and govern to the extent of such conflict.
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Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian or the Depositary, or as may be required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Notes may be listed or traded or designated for issuance or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject.
Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the Officer executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may
be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.
Each Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect redemptions, repurchases, cancellations, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Notes in accordance with this Indenture. Payment of principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) of, and accrued and unpaid interest on, a Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.
Section 2.03 Date and Denomination of Notes; Payments of Interest and Defaulted Amounts. (a) The Notes shall be issuable in registered form without coupons in minimum denominations of $1,000 principal amount and integral multiples in excess thereof. Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of such Note, subject to Section 2.03(d) below. Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.
(b) The Person in whose name any Note (or its Predecessor Note) is registered on the Note Register at the close of business on any Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date. The principal amount of any Note (x) in the case of any Physical Note, shall be payable at the office or agency of the Company maintained by the Company for such purposes in the contiguous United States, which shall initially be the Corporate Trust Office and (y) in the case of any Global Note, shall be payable by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Company shall pay, or cause the Paying Agent to pay, interest (i) on any Physical Notes (A) to Holders holding Physical Notes having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Note Register and (B) to Holders holding Physical Notes having an aggregate principal amount of more than $5,000,000, either by check mailed to each Holder or, upon application by such a Holder to the Note Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.
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(c) Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant payment date but shall accrue interest per annum at the rate borne by the Notes plus 2.00% per annum (except for such days that the Notes do not accrue interest pursuant to Section 2.03(d)), subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Amounts, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of the Defaulted Amounts proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 25 days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Amounts as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Amounts which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Company shall promptly notify the Trustee in writing of such special record date and the Trustee, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Amounts and the special record date therefor to be delivered to each Holder not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Amounts and the special record date therefor having been so delivered, such Defaulted Amounts shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (ii) of this Section 2.03(c). The Trustee shall have no responsibility for the calculation of the Defaulted Amounts.
(ii) The Company may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after written notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
(d) Notwithstanding the foregoing or anything in this Indenture or the Notes to the contrary, interest on the Notes shall cease to accrue from (and including) the first date on which, and shall not accrue for so long as, each of (i) the Company Mandatory Conversion Condition and (ii) each of the Equity Conditions, other than the Volume Condition, shall be satisfied such that, if the Volume Condition were satisfied at such time, the Company would have the right to elect to exercise the Company Mandatory Conversion Right in accordance with Section 14.03(a). Following any suspension of interest accrual in accordance with this Section 2.03(d), interest on the Notes shall continue to accrue in accordance with the terms of this Indenture from (and including) the first date on which any of the Company Mandatory Conversion Condition or any of the Equity Conditions (other than the Volume Condition) shall cease to be satisfied. For the avoidance of doubt, interest on the Notes shall cease to accrue at any time the conditions set forth in the first sentence of this Section 2.03(d) are satisfied and shall in any such case continue to accrue as provided in the second sentence of this Section 2.03(d). Whenever interest shall cease to accrue as provided in the first sentence of this Section 2.03(d) or continue to accrue as provided in the second sentence of this Section 2.03(d), the Company shall promptly deliver to the Trustee an Officer’s Certificate stating that interest shall cease to accrue or continue to accrue, as applicable. Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any change to the accrual of interest and the Trustee shall have no obligation to monitor, or determine, whether the Company Mandatory Conversion Condition and each of the Equity Conditions, other than the Volume Condition, shall be satisfied.
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Section 2.04 Execution, Authentication and Delivery of Notes. The Notes shall be signed in the name and on behalf of the Company by the manual, facsimile or other electronic signature of one of its Officers.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes, without any further action by the Company hereunder.
Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the Form of Note attached as Exhibit A hereto, executed manually by an authorized signatory of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 17.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.
In case any Officer of the Company who shall have signed any of the Notes shall cease to be such Officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed such Notes had not ceased to be such Officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the Officers of the Company, although at the date of the execution of this Indenture any such person was not such an Officer.
Section 2.05 Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary. (a) The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office or in any other office or agency of the Company designated pursuant to Section 4.02, the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time. The Trustee is hereby initially appointed the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. The Company may appoint one or more co-Note Registrars in accordance with Section 4.02.
Upon surrender for registration of transfer of any Note to the Note Registrar or any co-Note Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.05, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount and bearing such legends as may be required by this Indenture. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
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Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.02. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.
All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-Note Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company, the Trustee and the Note Registrar and be duly executed by the Holder thereof or its attorney-in-fact duly authorized in writing.
No service charge shall be imposed on a Holder by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent for any exchange or registration of transfer of Notes, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of new Notes issued upon such exchange or registration of transfer being different from the name of the Holder of the old Notes surrendered for exchange or registration of transfer.
None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 15.
All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.
(b) So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, subject to the fourth paragraph from the end of Section 2.05(c), all Notes shall be represented by one or more Notes in global form (each, a “Global Note”) registered in the name of the Depositary or the nominee of the Depositary. Each Global Note shall bear the legend required on a Global Note set forth in Exhibit A hereto. The transfer and exchange of beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall be effected through the Depositary (but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the Applicable Procedures.
(c) Every Note that bears or is required under this Section 2.05(c) to bear the Restrictive Legend (together with any Common Stock issued upon conversion of the Notes that is required to bear the legend set forth in Section 2.05(d), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.05(c) (including the legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, and the Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in this Section 2.05(c) and Section 2.05(d), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.
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Each Global Note shall bear a legend in substantially the following form (the “Restrictive Legend”) (or any similar legend, not inconsistent with this Indenture, required by the Depositary for such Global Note):
THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF 890 5TH AVENUE PARTNERS, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL CLOSING DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT AND IS EFFECTIVE AT THE TIME OF SUCH TRANSFER, OR
(C) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY DURING THE IMMEDIATELY PRECEDING THREE MONTHS MAY PURCHASE, OTHERWISE ACQUIRE OR HOLD THIS SECURITY OR A BENEFICIAL INTEREST HEREIN.
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Any Note (or security issued in exchange or substitution therefor) (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become effective or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.05, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the Restrictive Legend required by this Section 2.05(c) and shall not be assigned (or deemed assigned) a restricted CUSIP number. The Restrictive Legend set forth above and affixed on any Note will be deemed, in accordance with the terms of the certificate representing such Note, to be removed therefrom upon the Company’s delivery to the Trustee of written notice to such effect, without further action by the Company, the Trustee, the Holder(s) thereof or any other Person; at such time, such Note will be deemed to be assigned an unrestricted CUSIP number as provided in the certificate representing such Note, it being understood that the Depositary of any Global Note may require a mandatory exchange or other process to cause such Global Note to be identified by an unrestricted CUSIP number in the facilities of such Depositary. Without limiting the generality of any other provision of this Indenture, the Trustee will be entitled to receive an instruction letter from the Company before taking any action with respect to effecting any such mandatory exchange or other process. The Company and the Trustee reserve the right to require the delivery of such legal opinions, certifications or other evidence as may reasonably be required in order to determine that any proposed transfer of any Note is being made in compliance with the Securities Act and applicable state securities laws.
The Company shall be entitled to instruct the Custodian in writing to so surrender any Global Note as to which any of the conditions set forth in clause (i) through (iii) of the first sentence of the immediately preceding paragraph have been satisfied, and, upon such instruction, the Custodian shall so surrender such Global Note for exchange; and any new Global Note so exchanged therefor shall not bear the Restrictive Legend specified in this Section 2.05(c) and shall not be assigned (or deemed assigned) a restricted CUSIP number.
Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.05(c), a Global Note may not be transferred as a whole or in part except (i) by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary and (ii) for exchange of a Global Note or a portion thereof for one or more Physical Notes in accordance with the second immediately succeeding paragraph.
The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to each Global Note. Initially, each Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.
If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days or (iii) an Event of Default with respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officer’s Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal amount equal to the principal amount of such Note corresponding to such beneficial owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be canceled.
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Physical Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.05(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, or, in the case of clause (iii) of the immediately preceding paragraph, the relevant beneficial owner, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such Physical Notes to the Persons in whose names such Physical Notes are so registered.
At such time as all interests in a Global Note have been converted, canceled, repurchased or transferred, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and existing instructions between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Note is exchanged for Physical Notes, converted, canceled, repurchased or transferred to a transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred for part of such Global Note, the principal amount of such Global Note shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian, be appropriately reduced or increased, as the case may be, and an endorsement shall be made on such Global Note, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction or increase.
None of the Company, the Trustee, the Paying Agent, the Conversion Agent or any other agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
Neither the Company nor the Trustee shall have any responsibility or liability for any act or omission of the Depositary. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to, or upon the order of, the registered Holder(s) (which shall be the Depositary or its nominee in the case of a Global Note).
The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the Applicable Procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.
(d) Any stock certificate representing Common Stock issued upon conversion of a Note shall bear a legend in substantially the following form (unless such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of a Note that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF 890 5TH AVENUE PARTNERS, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL CLOSING DATE OF THE SERIES OF NOTES UPON THE CONVERSION OF WHICH THIS SECURITY WAS ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT AND IS EFFECTIVE AT THE TIME OF SUCH TRANSFER, OR
(C) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR THE COMPANY’S COMMON STOCK RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
Any such Common Stock (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.05(d).
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(e) Any Note or Common Stock issued upon conversion or exchange of a Note that is repurchased or owned by the Company or any Affiliate of the Company (or any Person who was an Affiliate of the Company at any time during the three months immediately preceding) may not be resold by the Company or such Affiliate (or such Person, as the case may be) unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction that results in such Note or Common Stock, as the case may be, no longer being a “restricted security” (as defined under Rule 144).
(f) Notwithstanding anything contained herein to the contrary, neither the Trustee nor the Note Registrar shall be responsible for ascertaining whether any transfer complies with the registration provisions of, or exemptions from, the Securities Act, applicable state securities laws or other applicable law.
Section 2.06 Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon receipt of a Company Order, the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Note, bearing a registration number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen. In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require. No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent upon the issuance of any substitute Note, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of the new substitute Note being different from the name of the Holder of the old Note that became mutilated or was destroyed, lost or stolen. In case any Note that has matured or is about to mature or has been surrendered for required repurchase or is about to be converted in accordance with Article 14 shall become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead of issuing a substitute Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent of the destruction, loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder. To the extent permitted by law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement, payment, conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement, payment, conversion or repurchase of negotiable instruments or other securities without their surrender.
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Section 2.07 Temporary Notes. Pending the preparation of Physical Notes, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon receipt of a Company Order, authenticate and deliver temporary Notes (printed or lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Physical Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company. Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Physical Notes. Without unreasonable delay, the Company shall execute and deliver to the Trustee or such authenticating agent Physical Notes (other than any Global Note) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount of Physical Notes upon the written request of the Company. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Physical Notes authenticated and delivered hereunder.
Section 2.08 Cancellation of Notes Paid, Converted, Etc. The Company shall cause all Notes surrendered for the purpose of payment at maturity, repurchase upon a Fundamental Change, registration of transfer or exchange or conversion (other than any Notes exchanged pursuant to Section 14.12), if surrendered to any Person that the Company controls other than the Trustee, to be surrendered to the Trustee for cancellation and they will no longer be considered outstanding under this Indenture upon their payment at maturity, registration of transfer or exchange or conversion. All Notes delivered to the Trustee shall be canceled promptly by it. Except for any Notes surrendered for registration of transfer or exchange, or as otherwise expressly permitted by any of the provisions of this Indenture, no Notes shall be authenticated in exchange for any Notes surrendered to the Trustee for cancellation. The Trustee shall dispose of canceled Notes in accordance with its customary procedures. After such cancellation, the Trustee shall deliver a certificate of such cancellation to the Company, at the Company’s written request in a Company Order.
Section 2.09 CUSIP Numbers. The Company in issuing the Notes may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in all notices issued to Holders as a convenience to such Holders; provided that the Trustee shall have no liability for any defect in the CUSIP numbers as they appear on any Note, notice or elsewhere and that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or on such notice and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the Trustee in writing of any change in the CUSIP numbers.
Article
3
SATISFACTION AND DISCHARGE
Section 3.01 Satisfaction and Discharge. This Indenture and the Notes shall upon request of the Company contained in an Officer’s Certificate cease to be of further effect, and the Trustee, at the expense of the Company, shall execute proper instruments reasonably requested by the Company acknowledging satisfaction and discharge of this Indenture and the Notes, when (a) (i) all Notes theretofore authenticated and delivered (other than Notes which have been destroyed, lost or stolen and which have been replaced, paid or converted as provided in Section 2.06) have been delivered to the Trustee for cancellation; or (ii) after the Notes have (x) become due and payable, whether on the Maturity Date, on any Fundamental Change Repurchase Date or otherwise and/or (y) been converted (and the related consideration due upon conversion has been determined), the Company has deposited with the Trustee cash and/or has delivered to Holders shares of Common Stock, as applicable, (in the case of Common Stock, solely to satisfy the Company’s Conversion Obligation) sufficient, without consideration of reinvestment, to pay all of the outstanding Notes and all other sums due and payable under this Indenture or the Notes by the Company; and (b) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture and the Notes have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall survive.
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Article
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PARTICULAR COVENANTS OF THE COMPANY
Section 4.01 Payment of Principal and Interest. The Company covenants and agrees that it will pay or cause to be paid the principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) and premium, if any, of the Settlement Amounts owed upon conversion of, and, to the extent applicable, accrued and unpaid interest on, each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.
Upon the occurrence, and during the continuance, of an Event of Default, the Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) at the then- applicable interest rate on the Notes plus 2.00% per annum (except for such days that the Notes do not accrue interest pursuant to Section 2.03(d)).
Notwithstanding anything to the contrary contained in this Indenture, the Company or Paying Agent may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal, premium or interest or Defaulted Amounts payments hereunder.
Section 4.02 Maintenance of Office or Agency. The Company will maintain in the contiguous United States an office or agency (which may be an office of the Trustee or an affiliate of the Trustee) where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be made. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made at the Corporate Trust Office.
The Company may also from time to time designate as co-Note Registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the contiguous United States for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms “Paying Agent” and “Conversion Agent” include any such additional or other offices or agencies, as applicable.
The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar, Custodian and Conversion Agent and the Corporate Trust Office as a place where Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase (if applicable) or for conversion and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be made; provided that no office of the Trustee shall be a place for service of legal process on the Company.
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Section 4.03 Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of the Trustee, will appoint, in the manner provided in Section 7.09, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 4.04 Provisions as to Paying Agent. (a) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04:
(i) that it will hold all sums held by it as such agent for the payment of the principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes in trust for the benefit of the Holders;
(ii) that it will give the Trustee prompt written notice of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) and premium, if any of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and
(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust;
provided that a Paying Agent appointed as contemplated under Section 15.02(f) shall not be required to deliver any such instrument.
The Company shall, on or before each due date of the principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) or such accrued and unpaid interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such action; provided that if such deposit is made on the due date, such deposit must be made in immediately available funds and received by the Paying Agent by 11:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including the Fundamental Change
Repurchase Price or Repurchase Price, if applicable) and accrued and unpaid interest, if any, so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable.
(c) Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay, cause to be paid or deliver to the Trustee all sums or amounts held in trust by the Company or any Paying Agent hereunder as required by this Section 4.04, such sums or amounts to be held by the Trustee upon the trusts herein contained and upon such payment or delivery by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability but only with respect to such sums or amounts.
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(d) Subject to applicable law, any money deposited with the Trustee, the Conversion Agent or any Paying Agent, or any money and shares of Common Stock then held by the Company, in trust for the payment of the principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of any Note and remaining unclaimed for two years after such principal (including the Fundamental Change Repurchase Price or Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid to the Company on request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust and the Trustee shall have no further liability with respect to such funds; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee, the Conversion Agent or such Paying Agent with respect to such trust money, and all liability of the Company as trustee with respect to such trust money and shares of Common Stock, shall thereupon cease.
Section 4.05 Corporate Existence. Subject to Article 11, the Company shall do or cause to be done, at its own cost and expense, all things necessary to preserve and keep in full force and effect its corporate existence in accordance with the organizational documents (as the same may be amended from time to time) of the Company.
Section 4.06 Rule 144A Information Requirement and Annual Reports. (a) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issuable upon conversion thereof shall, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide without cost to the Trustee and, upon written request, any Holder, beneficial owner or prospective purchaser of such Notes or any shares of Common Stock issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A.
(b) The Company shall deliver to the Trustee, within 15 days after the same are required to be filed with the Commission, copies of any documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act (or any successor thereto)). Notwithstanding the foregoing, the Company shall in no event be required to deliver to, or otherwise provide or disclose to, the Trustee or any Holder any information for which the Company is requesting (assuming such request has not been denied), or has received, confidential treatment from the Commission, or any correspondence with the Commission. Any such document or report that the Company files with the Commission via the Commission’s EDGAR system (or any successor thereto) shall be deemed to be delivered to the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system (or such successor); provided that the Trustee shall have no obligation to determine whether such documents or reports have been filed via the EDGAR system.
(c) Delivery of the reports, information and documents described in subsection (b) above to the Trustee is for informational purposes only, and the information and the Trustee’s receipt of such shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely on an Officer’s Certificate).
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Section 4.07 Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal or premium of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
Section 4.08 Compliance Certificate; Statements as to Defaults. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company (beginning with the fiscal year ending on December 31, 2021) an Officer’s Certificate stating whether the signers thereof have knowledge of any failure by the Company to comply with all conditions and covenants then required to be performed under this Indenture and, if so, specifying each such failure and the nature thereof.
In addition, the Company shall deliver to the Trustee within 30 days after an officer of the Company becomes aware of the occurrence of any Event of Default or Default, an Officer’s Certificate setting forth the details of such Event of Default or Default, its status and the action that the Company is taking or proposing to take in respect thereof; provided that the Company is not required to deliver such notice if such Event of Default or Default has been cured.