DC 00-0000000 --12-31 0001823466 false 0001823466 2022-07-29 2022-07-29 0001823466 us-gaap:CommonClassAMember 2022-07-29 2022-07-29 0001823466 note:RedeemableWarrantsEachWholeWarrantExercisableForOneShareOfClassCommonStockAtExercisePriceMember 2022-07-29 2022-07-29

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 29, 2022

 

 

FISCALNOTE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-396972   N/A

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

1201 Pennsylvania Avenue NW, 6th Floor,

Washington, D.C. 20004

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (202) 793-5300

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Class A common stock, par value $0.0001 per share   NOTE   NYSE
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share   NOTE.WS   NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


INTRODUCTORY NOTE

Unless the context otherwise requires, “we,” “us,” “our,” “New FiscalNote” and the “Company” refer to FiscalNote Holdings, Inc., a Delaware corporation, and its consolidated subsidiaries. All references herein to the “Board” refer to the board of directors of New FiscalNote. Terms used 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 Proxy Statement/ Prospectus and such definitions are incorporated herein by reference.

Domestication and Business Combination Transaction

As previously announced, Duddell Street Acquisition Corp. (“DSAC,” and, after the Domestication as described below, “New DSAC”), a Cayman Islands exempted company, previously entered into an agreement and plan of merger, dated as of November 7, 2021 (as amended by the First Amendment to Agreement and Plan of Merger, dated May 9, 2022, the “Business Combination Agreement”), by and among DSAC, Grassroots Merger Sub, Inc., a wholly owned subsidiary of DSAC (“Merger Sub”), and FiscalNote Holdings, Inc., a Delaware corporation (“Old FiscalNote”).

At the extraordinary general meeting of the DSAC shareholders held on July 27, 2022 (the “Special Meeting”), the DSAC shareholders considered and approved and adopted, among other matters, the Business Combination Agreement and the other proposals related thereto described in the Proxy Statement/Prospectus (as defined below).

On July 28, 2022, as contemplated by the Business Combination Agreement and described in the section titled “The Domestication Proposal” beginning on page 158 of the final prospectus and definitive proxy statement, dated July 5, 2022 (the “Proxy Statement/Prospectus”) and filed with the Securities and Exchange Commission (the “SEC”), DSAC filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and a certificate of corporate domestication with the Secretary of State of Delaware, pursuant to which DSAC was domesticated and continued as a Delaware corporation, under the name of “FiscalNote Holdings, Inc.” (the “Domestication”).

As a result of, and upon the effective time of the Domestication, among other things, (i) each of the issued and outstanding Class A ordinary shares, par value $0.0001 per share, and each of the issued and outstanding Class B ordinary shares, par value $0.0001 per share, of DSAC converted into one share of Class A common stock, par value $0.0001 per share, of New DSAC (the “New DSAC Class A common stock”); (ii) each issued and outstanding whole warrant of DSAC (the “DSAC warrants”) automatically converted into a warrant to purchase one share of New DSAC Class A common stock (the “New DSAC warrants”) at an exercise price of $11.50 per share on the terms and conditions set forth in the warrant agreement, dated October 28, 2020, between DSAC and Continental Stock Transfer & Trust Company, as warrant agent (the “DSAC Warrant Agreement”); and (iii) each of the issued and outstanding units of DSAC that had not been previously separated into the underlying DSAC Class A ordinary shares and underlying DSAC warrants prior to the Domestication upon the request of the holder thereof was cancelled and entitled the holder thereof to one share of New DSAC Class A common stock and one-half of one New DSAC warrant representing the right to purchase one share of New DSAC Class A Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions set forth in the DSAC Warrant Agreement.

On July 29, 2022 (the “Closing Date”), as contemplated by the Business Combination Agreement and described in the section titled “The Business Combination Proposal” beginning on page 120 of the Proxy Statement/Prospectus, New DSAC consummated the merger transaction contemplated by the Business Combination Agreement (the “Closing”), whereby Merger Sub merged with and into Old FiscalNote, the separate corporate existence of Merger Sub ceasing and Old FiscalNote being the surviving corporation and a wholly owned subsidiary of New DSAC (the “Merger” and, together with the Domestication, the “Business Combination”). In connection with the consummation of the Business Combination, New DSAC changed its name to “FiscalNote Holdings, Inc.” (“New FiscalNote”). The shares of New DSAC Class A common stock and New DSAC warrants described above became Class A common stock of New FiscalNote and New FiscalNote warrants, respectively, upon consummation of the Merger.

 

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Pursuant to the Business Combination Agreement, DSAC acquired all of the outstanding equity interests of Old FiscalNote, other than dissenting shares, in exchange for Per Share Merger Consideration in the form of common stock of New FiscalNote (“New FiscalNote common stock”), plus Per Share Earnout Consideration subject to each Triggering Event. Old FiscalNote stockholders received consideration in the form of shares of Class A common stock, par value $0.0001 per share, of New FiscalNote (“New FiscalNote Class A common stock”) and/or Class B common stock, par value $0.0001 per share, of New FiscalNote (“New FiscalNote Class B common stock”), as determined in accordance with the Business Combination Agreement. Following the Domestication and immediately prior to the consummation of the Business Combination, the holders of outstanding DSAC Class A ordinary shares that did not elect to redeem their shares received a distribution of 0.57 shares of New FiscalNote Class A common stock (the “Bonus Shares”) for each share of New DSAC Class A common stock received in the Domestication. Certain affiliates of the Duddell Street Holdings Limited, a Delaware limited liability company (the “Sponsor”) also received Bonus Shares for each share of New DSAC Class A common stock for which they subscribed pursuant to the Backstop Agreement described herein. The issuances of the Bonus Shares triggered adjustments to the previously outstanding DSAC warrants pursuant to the DSAC Warrant Agreement. Each previously outstanding DSAC warrant (including DSAC warrants held by the Sponsor and its affiliates) adjusted to 1.571 DSAC warrants in proportion to the 10,000,000 share increase in the outstanding shares of New FiscalNote Class A common stock as a result of the issuances of the Bonus Shares, and the exercise price of each DSAC warrant was adjusted to $7.32 per share.

In connection with the Business Combination, holders of 11,408,314 shares of DSAC’s Class A ordinary shares sold in its initial public offering properly exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from DSAC’s initial public offering, calculated as of the Closing Date, or approximately $10.00 per share and $114.3 million in the aggregate. Accordingly, affiliates of the Sponsor purchased 11,408,314 shares of New DSAC Class A common stock for $114.3 million pursuant to the Backstop Agreement immediately prior to Closing.

The foregoing description of the Business Combination Agreement does not purport to be complete and is qualified in its entirety by the full text of the Business Combination Agreement, which is attached hereto as Exhibit 2.1 and Exhibit 2.2 and incorporated herein by reference.

Sponsor Agreement

As described in the Proxy Statement/Prospectus, in connection with the execution of the Business Combination Agreement, the Sponsor entered into an agreement (the “Sponsor Agreement”) with Old FiscalNote and DSAC pursuant to which the Sponsor agreed, among other things, (i) not to redeem any ordinary shares in DSAC owned by it in connection with the Business Combination, (ii) to vote in favor of the Business Combination Agreement and the transactions contemplated thereby (including the Merger) and (iii) to waive any adjustment to the conversion ratio set forth in DSAC’s amended and restated memorandum and articles of association with respect to the Class B ordinary shares of DSAC held by the Sponsor, in each case, on the terms and subject to the conditions set forth in the Sponsor Agreement.

In addition, the Sponsor agreed that (i) all equity interests of DSAC held by the Sponsor immediately after the Effective Time (the “Restricted Securities”) will be subject to a lockup of 180 days from the time at which the Merger became effective (the “Effective Time”) and (ii) 50% of each type of the Restricted Securities held by the Sponsor will be subject to a lockup during the period from the date that is 180 days following after the Effective Time and ending on the first anniversary of the Effective Time, in each case, except to the Permitted Transferees as defined in the Sponsor Agreement.

The foregoing description of the Sponsor Agreement does not purport to be complete and is qualified in its entirety by the full text of the Sponsor Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

Voting and Support Agreement

As described in the Proxy Statement/Prospectus, in connection with the execution of the Business Combination Agreement, certain stockholders of Old FiscalNote (collectively, the “Voting Stockholders”) entered into voting and support agreements (collectively, the “Voting and Support Agreement”) with DSAC and Old FiscalNote, pursuant to which the Voting Stockholders agreed to, among other things, (i) vote in favor of the Business Combination

 

3


Agreement and the transactions contemplated thereby, (ii) a lockup of all equity interests of New FiscalNote held by such Voting Stockholder immediately after the Effective Time for a period of 180 days from the Effective Time (or 12 months, in the case of the Co-Founders) and (iii) be bound by certain other covenants and agreements related to the Business Combination. The Voting Stockholders held sufficient shares of FiscalNote to cause the approval of the Business Combination on behalf of Old FiscalNote.

The foregoing description of the Voting and Support Agreement does not purport to be complete and is qualified in its entirety by the full text of the Voting and Support Agreement, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.

Backstop Agreement

As described in the Proxy Statement/Prospectus, in connection with the execution of the Business Combination Agreement, DSAC and certain investment funds affiliated to the Sponsor, including Maso Capital Investments Limited, Blackwell Partners LLC — Series A, and Star V Partners LLC (collectively, the “Backstop Parties”) entered into that certain Backstop Agreement, dated as of November 7, 2021 (as amended by the First Amendment to the Backstop Agreement, dated May 9, 2022, the “Backstop Agreement”) whereby the Backstop Parties agreed, subject to the other terms and conditions included therein, at the Closing, to subscribe for shares of New DSAC Class A common stock in order to fund redemptions by shareholders of DSAC in connection with the Business Combination, in an amount equal to the amount paid out of the Trust Account of DSAC to honor duly exercised redemption rights of up to $175,000,000. The Backstop Parties are additionally entitled to receive Bonus Shares for each share of New DSAC Class A common stock for which they subscribed pursuant to the Backstop Agreement.

The foregoing description of the Backstop Agreement does not purport to be complete and is qualified in its entirety by the full text of the Backstop Agreement, which is attached hereto as Exhibit 10.3 and Exhibit 10.4 and is incorporated herein by reference.

 

Item 1.01.

Entry into a Material Definitive Agreement.

Registration Rights Agreement

In connection with the Closing, New FiscalNote entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”) among New FiscalNote, the Sponsor, and certain New FiscalNote stockholders. Pursuant to the Registration Rights Agreement, New FiscalNote will, among other matters, be required to register for resale securities held by the stockholders party thereto. In addition, the holders have certain customary “piggyback” registration rights with respect to registrations initiated by New FiscalNote. New FiscalNote will bear the expenses incurred in connection with the filing of any registration statements pursuant to the Registration Rights Agreement.

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Registration Rights Agreement, which is attached hereto as Exhibit 10.5 and is incorporated herein by reference.

Indemnification Agreements

On the Closing Date, New FiscalNote entered into indemnification agreements with each of its directors and executive officers.

Each indemnification agreement provides for indemnification and advancements by New FiscalNote of certain expenses and costs relating to claims, suits or proceedings arising from each director or executive officer’s service to New FiscalNote, or, at New FiscalNote’s request, service to other entities, as officers or directors to the maximum extent permitted by applicable law.

 

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The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, a form of which is attached hereto as Exhibit 10.6 and is incorporated herein by reference.

Second Amended and Restated Credit and Guaranty Agreement

On the Closing Date, FiscalNote, Inc. entered into that certain second amended and restated credit and guaranty agreement (the “Credit Agreement”), with Runway Growth Finance Corp., as administrative agent and collateral agent, the lenders party thereto, and Runway Growth Finance Corp. and Orix Growth Capital LLC, as joint lead arrangers and joint bookrunners, pursuant to which the lenders have made term loans having an aggregate principal balance of $150,000,000. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Credit Agreement.

The Credit Agreement contains representations, warranties, covenants, terms and conditions customary for transactions of this type. These include covenants limiting Borrower’s, New FiscalNote’s and each of their subsidiaries’ ability, subject to certain exceptions and baskets, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any transaction of merger, consolidation or amalgamation, liquidate, wind up or dissolve, or dispose of all or substantially all of their property or business, (iv) dispose of any of their property, or, issue or sell any shares of a subsidiary’s stock, (v) make any payment or prepayment for any subordinated indebtedness, pay any earn-out payment, seller debt or deferred purchase price payments, or (vi) declare or pay any dividend or make any other distribution,

The Credit Agreement contains certain events of default, including, among others, (i) failure to pay, (ii) breach of representations and warranties, (iii) breach of covenants, subject to any cure periods described therein, and (iv) failure to pay principal or interest on any other material debt. If any event of default occurs and is not cured within applicable grace periods set forth in the Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated.

The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Credit Agreement, which is attached hereto as Exhibit A to Exhibit 10.7 and is incorporated herein by reference.

Amendment and Restatement Agreement

On the Closing Date, after giving effect to the Closing, New FiscalNote entered into that certain amendment and restatement agreement (the “Restatement Agreement”), with Runway Growth Finance Corp., as administrative agent and collateral agent, and the lenders party thereto.

Under the Restatement Agreement, New FiscalNote guaranteed all obligations under the Credit Agreement and granted a security interest on substantially all of its assets, subject to certain customary exceptions.

The foregoing description of the Restatement Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Restatement Agreement, which is attached hereto as Exhibit 10.7 and is incorporated herein by reference.

 

Item 2.01.

Completion of Acquisition or Disposition of Assets.

The disclosure set forth under “Introductory Note-Domestication and Business Combination Transaction” above is incorporated into this Item 2.01 by reference.

FORM 10 INFORMATION

Item 2.01(f) of Form 8-K states that if the registrant was a shell company, as DSAC was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, the Company is providing the

 

5


information that would be included in a Form 10 if the Company were to file a Form 10. Please note that the information provided below relates to the Company as the combined company after the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

Forward-Looking Statements

This Current Report on Form 8-K, and some of the information incorporated herein by reference, includes forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of New FiscalNote. These statements are based on the beliefs and assumptions of the management of New FiscalNote. Although New FiscalNote believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or similar expressions. Forward-looking statements contained in this Current Report on Form 8-K include, but are not limited to, statements about:

 

   

the ability of New FiscalNote to realize the benefits expected from the Business Combination;

 

   

the ability to maintain the listing of New FiscalNote Class A common stock on the NYSE;

 

   

New FiscalNote’s ability to raise financing in the future and to comply with restrictive covenants related to long-term indebtedness;

 

   

New FiscalNote’s ability to retain or recruit, or adapt to changes required in, its co-founders, senior executives, key personnel or directors;

 

   

factors relating to the business, operations and financial performance of New FiscalNote, including:

 

   

New FiscalNote’s ability to effectively manage its growth;

 

   

changes in New FiscalNote’s strategy, future operations, financial position, estimated revenue and losses, forecasts, projected costs, prospects and plans;

 

   

New FiscalNote’s future capital requirements;

 

   

demand for New FiscalNote’s services and the drivers of that demand;

 

   

New FiscalNote’s ability to attract new customers, retain existing customers, expand its products and service offerings with existing customers, expand into geographic markets or identify areas of higher growth;

 

   

the exposure of New FiscalNote’s CQ Roll Call business to low or declining demand for advertising, events, and similar sponsorships;

 

   

New FiscalNote’s ability to develop, enhance, and integrate its existing platforms, products, and services;

 

   

New FiscalNote’s ability to successfully identify acquisition opportunities, make acquisitions on terms that are commercially satisfactory, successfully integrate potential acquired businesses and services, and subsequently grow acquired businesses;

 

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New FiscalNote’s reliance on third-party systems that it does not control to integrate with its systems and its potential inability to continue to support integration;

 

   

potential technical disruptions, cyberattacks, security, privacy or data breaches or other technical or security incidents that affect FiscalNote’s networks or systems or those of its service providers;

 

   

New FiscalNote’s ability to obtain and maintain accurate, comprehensive, or reliable data to support its products and services;

 

   

New FiscalNote’s ability to introduce new features, integrations, capabilities, and enhancements to its products and services;

 

   

New FiscalNote’s ability to maintain and improve its methods and technologies, and anticipate new methods or technologies, for data collection, organization, and analysis to support its products and services;

 

   

competition and competitive pressures in the markets in which New FiscalNote operates;

 

   

larger well-funded companies shifting their existing business models to become more competitive with New FiscalNote;

 

   

New FiscalNote’s ability to protect and maintain its brands;

 

   

New FiscalNote’s ability to comply with laws and regulations in connection with selling products and services to U.S. and foreign governments and other highly regulated industries;

 

   

New FiscalNote’s ability to retain or recruit key personnel;

 

   

New FiscalNote’s ability to effectively maintain and grow its research and development team and conduct research and development;

 

   

New FiscalNote’s ability to adapt its products and services for changes in laws and regulations or public perception, or changes in the enforcement of such laws, relating to artificial intelligence, machine learning, data privacy and government contracts;

 

   

New FiscalNote’s ability to adequately protect its proprietary and intellectual property rights;

 

   

the impact of the COVID-19 pandemic and other similar disruptions in the future;

 

   

adverse general economic and market conditions reducing spending on New FiscalNote’s products and services;

 

   

the outcome of any known and unknown litigation and regulatory proceedings;

 

   

New FiscalNote’s ability to successfully establish and maintain public company-quality internal control over financial reporting;

 

   

intense competition and competitive pressures from other companies worldwide in the industries in which New FiscalNote operates;

 

   

litigation and the ability to adequately protect New FiscalNote’s intellectual property rights; and

 

   

other factors detailed in the Proxy Statement/Prospectus in the section titled “Risk Factors”.

 

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These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Current Report on Form 8-K and in any document incorporated by reference are more fully described under the heading “Risk Factors” and elsewhere in the Proxy Statement/Prospectus, which is incorporated herein by reference. The risks described in the Proxy Statement/Prospectus under the heading “Risk Factors” are not exhaustive. Other sections of the Proxy Statement/Prospectus describe additional factors that could adversely affect the business, financial condition or results of operations of New FiscalNote. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can New FiscalNote assess the impact of all such risk factors on its business, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements made by New FiscalNote or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. New FiscalNote undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Business

The business of DSAC prior to the Business Combination is described in the Proxy Statement/Prospectus in the section titled “Other Information Related to DSAC” and that information is incorporated herein by reference. The business of New FiscalNote is described in the Proxy Statement/Prospectus in the section titled “Information about the Parties to the Business Combination-FiscalNote” and “Business of FiscalNote” and that information is incorporated herein by reference.

Risk Factors

The risk factors related to New FiscalNote’s business and operations are set forth in the Proxy Statement/Prospectus in the section titled “Risk Factors” and that information is incorporated herein by reference. A summary of the risks associated with New FiscalNote’s business and operations is also set forth in the section of the Proxy Statement/Prospectus titled “Summary Risk Factors” which is incorporated herein by reference.

Financial Information

Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of Old FiscalNote and the Company, which is incorporated by reference. Reference is further made to the disclosure contained in the Proxy Statement/Prospectus in the sections titled “Summary Historical Financial Information of DSAC,”DSAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Summary Historical Financial Information of FiscalNote”and “FiscalNote’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which are incorporated herein by reference. Reference is further made to the disclosure contained in DSAC’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and filed with the SEC on April 14, 2022 and DSAC’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 and filed with the SEC on May 16, 2022, which are incorporated herein by reference.

Facilities

The facilities of New FiscalNote are described in the Proxy Statement/Prospectus in the section titled “Business of FiscalNote-Properties” and that information is incorporated herein by reference.

 

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Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information known to the Company regarding the beneficial ownership of New FiscalNote common stock as of the Closing Date by:

 

   

each person who is a named executive officer or director of New FiscalNote;

 

   

all executive officers and directors of New FiscalNote as a group; and

 

   

each person who is a beneficial owner of more than 5% of New FiscalNote Class A common stock or New FiscalNote Class B common stock.

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. Unless otherwise indicated, New FiscalNote believes that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them.

The beneficial ownership of New FiscalNote common stock is based on 121,449,403 shares of New FiscalNote Class A common stock and 8,290,921 shares of New FiscalNote Class B common stock issued and outstanding immediately following the consummation of the Business Combination.

 

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     New
FiscalNote
Class A
common
stock
     New
FiscalNote
Class B
common
stock
     % of Total
Common
Stock
    % of Total
Voting
Power
 

Directors and Executive Officers of New FiscalNote(1)

          

Timothy Hwang(2)

     2,117,904        7,108,623        7.00     54.36

Gerald Yao(3)

     34,126        1,182,298        *       9.00

Michael J. Callahan(4)

     89,025        —          *       *  

Key Compton(5)

     742,521        —          *       *  

Vibha Jain Miller

     —          —          —         —    

Stanley McChrystal(6)

     130,570        —          *       *  

Keith Nilsson(7)

     13,709,031        —          10.56     4.17

Anna Sedgley(8)

     21,019        —          *       *  

Brandon Sweeney(9)

     89,025        —          *       *  

Conrad Yiu(10)

     1,482,941        —          1.14     *  

Jon Slabaugh(11)

     64,987        —          *       *  

Josh Resnik(12)

     109,201        —          *       *  

Krystal Putman-Garcia(13)

     29,154        —          *       *  

Reed Fawell(14)

     107,496        —          *       *  

Manoj Jain(15)

     43,106,587        —          29.96     13.11

All Directors and Executive Officers of New FiscalNote as a Group (15 Individuals)

     61,833,587        8,290,921        42.15     68.98

5% Beneficial Owners of New FiscalNote

          

Sponsor, Maso Capital Investments Limited, Blackwell Partners LLC — Series A and Star V Partners LLC(15)

     43,106,587        —          29.96     13.11

GPO FN Noteholder LLC(16)

     7,781,723        —          6.00     2.37

 

*

Less than one percent.

**

Percentage of total voting power represents voting power with respect to all shares of New FiscalNote Class A common stock and New FiscalNote Class B common stock, as a single class. Each share of New FiscalNote Class B common stock is entitled to 25 votes per share and each share of New FiscalNote Class A common is be entitled to one vote per share. For more information about the voting rights of New FiscalNote common stock, see “Description of New FiscalNote Securities” in the Proxy Statement/Prospectus.

(1)

The business address of each of these stockholders (other than Mr. Jain) is 1201 Pennsylvania Avenue NW, 6th Floor, Washington, D.C. 20004.

(2)

Reflects (i) 7,108,623 shares held by Timothy T. Hwang, as Trustee of the Timothy T. Hwang Revocable Trust, originally dated January 10, 2019 ( “Hwang Trust”), over which Mr. Hwang has sole voting and dispositive power and (ii) 2,117,904 shares over which the Hwang Trust has the right to acquire dispositive power upon the exercise of options exercisable as of or within 60 days.

(3)

Reflects (i) 1,099,208 shares held by the Gerald Yao Revocable Trust, dated January 10, 2019 (“Yao Trust”), over which Mr. Yao is trustee and in such capacity holds sole voting and dispositive power, (ii) 83,090 shares held by the Gerald Yao 2021 GRAT, over which Mr. Yao is trustee and in such capacity holds sole voting and dispositive power over the shares, and (iii) 34,126 shares held by the Yao Trust, over which Mr. Yao has the right to acquire dispositive power upon the exercise of options exercisable as of or within 60 days.

(4)

Reflects (i) 59,350 shares underlying options over which Mr. Callahan has the right to acquire dispositive power upon the exercise of options and (ii) 29,675 shares underlying restricted stock units over which Mr. Callahan has the right to acquire dispositive power upon the settlement of restricted stock units, each exercisable or vesting as of or within 60 days.

 

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(5)

Reflects (i) 21,019 shares over which Mr. Compton has the right to acquire dispositive power upon the settlement of restricted stock units vesting as of or within 60 days, (ii) 690,637 shares beneficially owned by Global Public Offering Master Fund, L.P. (“GPO Master Fund”) and (iii) 30,865 shares beneficially owned by Urgent Capital LLC (“Urgent Capital”). Global Public Offering Fund GP, LLC (“GPO Fund”) is the general partner of GPO Master Fund. Mr. Compton is a managing director of Urgent International Inc. (“Urgent”), which is the owner and operator of GPO Master Fund and its affiliated entities and the investment advisor for GPO Master Fund and the owner and operator of Urgent Capital. As such, Mr. Compton may be deemed to have voting and dispositive power over the shares held by GPO Master Fund and Urgent Capital. The address for GPO Master Fund and Urgent Capital is c/o Urgent International Inc., 27 Great Jones Street, Suite 6W, New York, New York 10012.

(6)

Reflects (i) 71,220 shares and (ii) 59,350 shares over which Mr. McChrystal has the right to acquire dispositive power upon the settlement of restricted stock units vesting as of or within 60 days.

(7)

Reflects (i) 59,350 shares over which Mr. Nilsson has the right to acquire dispositive power upon the settlement of restricted stock units vesting as of or within 60 days; (ii) 6,345,702 shares beneficially owned by Visionnaire Ventures Fund I, LP (“Visionnaire”); (iii) 2,123,155 shares beneficially owned by Xplorer Capital Fund III L.P. (“Xplorer”); (iv) 2,629,239 shares beneficially owned by XC FiscalNote-A, LLC (“XC-A”); (v) 2,250,000 shares beneficially owned by XC FiscalNote-B, LLC (“XC-B”); and (vi) 301,585 shares beneficially owned by Xplorer Capital (“Capital”). Mr. Nilsson is managing partner of Visionnaire and may be deemed to have voting and dispositive power over the shares held by Visionnaire. Mr. Nilsson is managing partner of Xplorer and Capital and may be deemed to have voting and dispositive power over the shares held by Xplorer and Capital. Mr. Nilsson is managing director of XC-A and XC-B and may be deemed to have voting and dispositive power over the shares. The address for each of these entities is 1300 El Camino Real, Suite 100, Menlo Park, California 94025.

(8)

Reflects 21,019 shares over which Ms. Sedgley has the right to acquire dispositive power upon the settlement of restricted stock units vesting as of or within 60 days.

(9)

Reflects (i) 59,350 shares underlying options over which Mr. Sweeney has the right to acquire dispositive power upon the exercise of options and (ii) 29,675 shares underlying restricted stock units over which Mr. Sweeney has the right to acquire dispositive power upon settlement of restricted stock units, each exercisable or vesting as of or within 60 days.

(10)

Reflects (i) 25,965 shares over which Mr. Yiu has the right to acquire dispositive power upon the settlement of restricted stock units vesting as of or within 60 days and (ii) 1,456,976 shares beneficially owned by SkyOne Capital Pty Ltd. (“SkyOne”). Mr. Yiu is a director of SkyOne, which entity is the trustee of funds affiliated with and/or managed by AS1 Growth Partners Pty Ltd where Mr. Yiu serves as a partner, and in such capacity may be deemed to have voting and dispositive power over such shares. The address for SkyOne is Level 16, 88 Phillip Street, Aurora Place, Sydney, NSW 2000, Australia.

(11)

Reflects 64,987 shares over which Mr. Slabaugh has the right to acquire dispositive power upon the exercise of options as of or within 60 days.

(12)

Reflects 109,201 shares over which Mr. Resnik has the right to acquire dispositive power upon the exercise of options as of or within 60 days after.

(13)

Reflects 29,154 shares over which Ms. Putman-Garcia has the right to acquire dispositive power upon the exercise of options as of or within 60 days.

(14)

Reflects 107,496 shares over which Mr. Fawell has the right to acquire dispositive power upon the exercise of options as of or within 60 days.

(15)

The Sponsor, Maso Capital Investments Limited (“MCIL”), Blackwell Partners LLC — Series A (“BW”) and Star V Partners LLC (“SV”) are the beneficial owners of the shares reported herein. Maso Capital Offshore Limited (“MCOL” is the sole member and manager of the Sponsor and has voting and investment discretion with respect to the common shares held of record by the Sponsor. Maso Capital Partners Limited (“MCPL”) is the investment manager of each of MCIL, BW and SV and has voting and investment discretion with respect to the common shares held of record by those entities. Manoj Jain, Sohit Khurana and Allan Finnerty are the directors of MCOL and Manoj Jain and Sohit Khurana are the directors of MCPL, and may be deemed to have shared voting and dispositive power over the shares. Each such person disclaims any beneficial ownership of such shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Accordingly, all of the shares held by our sponsor may be deemed to be beneficially held by Maso Capital Offshore Limited. The business address of this stockholder is 8/F Printing House, 6 Duddell Street, Hong Kong.

 

11


(16)

GPO FN Noteholder LLC is the beneficial owner of the shares reported herein. Stonehill Capital Management LLC (“SCM”) is the manager of GPO FN Noteholder LLC and has voting and investment discretion with respect to the shares held of record by GPO FN Noteholder LLC. SCM disclaims beneficial ownership of such shares. Mr. John Motulsky, Mr. Jonathan Sacks, Mr. Peter Sisitsky, Mr. Michael Thoyer, Mr. Michael Stern and Mr. Samir Arora (collectively, the “Members”) are the managing members of SCM and may be deemed to have shared voting and dispositive power over the shares. The Members disclaim beneficial ownership of such shares except to the extent of any pecuniary interest therein. The business address of this stockholder is 320 Park Avenue, 26th Floor, New York, NY 10022.

Directors and Executive Officers

The Company’s directors and executive officers, composition of the committees of the Board and information with respect to the independence of the Board after the consummation of the Business Combination are described in the Proxy Statement/Prospectus in the section titled “New FiscalNote Management After the Business Combination” and that information is incorporated herein by reference.

Executive Compensation

Executive Compensation

A description of the compensation of the named executive officers of DSAC before the consummation of the Business Combination and the named executive officers of New FiscalNote after the consummation of the Business Combination is set forth in the Proxy Statement/Prospectus in the sections titled “Other Information Related to DSAC-Executive Compensation and Director Compensation,” “FiscalNote’s Executive and Director Compensation” and New FiscalNote Management After the Business Combination,” respectively, and that information is incorporated herein by reference.

Director Compensation

A description of the compensation of the directors of DSAC before the consummation of the Business Combination and the directors of New FiscalNote after the consummation of the Business Combination is set forth in the Proxy Statement/Prospectus in the sections titled “Other Information Related to DSAC-Executive Compensation and Director Compensation,” “FiscalNote’s Executive and Director Compensation” and New FiscalNote Management After the Business Combination,” respectively, and that information is incorporated herein by reference.

Compensation Committee Interlocks and Insider Participation

A description of the compensation committee interlocks and insider participation of the Company is set forth in the Proxy Statement/Prospectus in the section titled “New FiscalNote Management After the Business Combination-Compensation Committee Interlocks and Insider Participation” and that information is incorporated herein by reference.

Certain Relationships and Related Party Transactions, and Director Independence

Certain relationships and related party transactions of DSAC are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions” and that information is incorporated herein by reference.

Certain relationships and related party transactions of the Company are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions” and that information is incorporated herein by reference.

 

12


A description of the Company’s independent directors is contained in the Proxy Statement/Prospectus in the section titled “New FiscalNote Management After the Business Combination—Independence of the Board of Directors” and that information is incorporated herein by reference.

Legal Proceedings

Reference is made to the disclosure regarding legal proceedings in the section of the Proxy Statement/Prospectus titled “Other Information Related to DSAC—Legal Proceedings”and “Business of FiscalNote—Legal Proceedings” and that information is incorporated herein by reference.

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

Market Information, Holders of Record and Dividends

Information about the ticker symbol, number of stockholders and dividends for DSAC’s securities is set forth in the Proxy Statement/Prospectus in the section titled “Market Price, Ticker Symbol and Dividend Information” and such information is incorporated herein by reference.

As of the Closing Date, there were approximately 770 holders of record of New FiscalNote’s Class A common stock, approximately two holders of record of New FiscalNote’s Class B common stock and approximately two holders of record of New FiscalNote’s public warrants to purchase New FiscalNote Class A common stock.

New FiscalNote’s Class A common stock and warrants began trading on the NYSE under the symbols “NOTE” and “NOTE.WS”, respectively, on August 1, 2022. DSAC’s public units automatically separated into their component securities upon consummation of the Business Combination and, as a result, no longer trade as a separate security and were delisted from Nasdaq.

New FiscalNote has not paid any cash dividends on shares of its Class A common stock to date. The payment of cash dividends in the future will be dependent upon its revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of the Board.

Securities Authorized for Issuance Under Equity Compensation Plans

Reference is made to the disclosure described in the Proxy Statement/Prospectus in the sections titled “The Long-Term Incentive Plan Proposal” and “The ESPP Proposal,” which are incorporated herein by reference. The FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan (the “2022 Plan”) and the FiscalNote Holdings, Inc. 2022 Employee Stock Purchase Plan (the “ESPP”) were approved by DSAC’s shareholders at the Special Meeting.

Recent Sales of Unregistered Securities

Reference is made to the disclosure set forth below under Item 3.02 of this Current Report on Form 8-K concerning the issuance and sale by the Company of certain unregistered securities, which is incorporated herein by reference.

Description of Registrant’s Securities to Be Registered

The description of New FiscalNote’s securities is contained in the Proxy Statement/Prospectus in the section titled “Description of New FiscalNote Securities” and that information is incorporated herein by reference. As described below, the Company’s Amended and Restated Certificate of Incorporation was approved by DSAC’s shareholders at the Special Meeting and became effective as of the Closing.

Indemnification of Directors and Officers

The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

13


Financial Statements and Exhibits

The information set forth under Item 9.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 3.01

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On July 29, 2022, in connection with the Closing, DSAC filed a Form 25 to voluntarily delist its units, Class A ordinary shares and warrants from the Nasdaq Stock Market.

 

Item 3.02.

Unregistered Sales of Equity Securities.

In connection with the execution of the Business Combination Agreement, DSAC and the Backstop Parties entered the Backstop Agreement, pursuant to which the Backstop Parties, at the Closing, subscribed for an aggregate of 11,433,109 shares of New FiscalNote Class A common stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $114,331,090, and additionally received an aggregate of 6,533,205 Bonus Shares in connection therewith. Such Backstop Shares were issued pursuant to and in accordance with the exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), under Section 4(a)(2) and/or Regulation D promulgated thereunder.

 

Item 3.03.

Material Modification to Rights of Security Holders.

In connection with the Domestication and immediately prior to the consummation of the Business Combination, DSAC filed a certificate of incorporation with the Secretary of State of the State of Delaware. The material terms of the certificate of incorporation and the general effect upon the rights of holders of DSAC’s capital stock are discussed in the Proxy Statement/Prospectus in the sections titled “The Domestication Proposal” beginning on page 158, “The Governing Documents Proposal” beginning on page 161 and “The Advisory Governing Documents Proposals” beginning on page 163, which are incorporated by reference herein.

As disclosed below in Item 8.01, in accordance with Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), New FiscalNote is the successor issuer to DSAC and has succeeded to the attributes of DSAC as the registrant. In addition, the shares of common stock of New FiscalNote, as the successor to DSAC, are deemed to be registered under Section 12(b) of the Exchange Act.

Certificate of Incorporation and Bylaws of New FiscalNote

Upon the effectiveness of the Domestication, DSAC’s memorandum and articles of association in effect immediately prior to the Domestication were replaced with the certificate of incorporation and bylaws of New DSAC, which continued in effect through the Closing as the certificate of incorporation and bylaws of New FiscalNote. The bylaws of New FiscalNote contain provisions that are consistent with New FiscalNote’s certificate of incorporation.

The shareholders of DSAC approved these amendments at the Special Meeting. The foregoing summary is qualified in its entirety by reference to the full text of the certificate of incorporation of New FiscalNote, which is included as Exhibit 3.1 hereto, and the bylaws of New FiscalNote, which is included as Exhibit 3.2 hereto, all of which are incorporated herein by reference.

The material terms of each of New FiscalNotes’s certificate of incorporation and bylaws and the general effect upon the rights of holders of New FiscalNote’s capital stock are included in the Proxy Statement/Prospectus Statement under the sections titled “The Domestication Proposal,” “The Governing Documents Proposal,” “The Advisory Governing Documents Proposals” and “Description of the New FiscalNote Securities,” which are incorporated herein by reference.

 

14


Item 5.01.

Changes in Control of Registrant.

Reference is made to the disclosure in the Proxy Statement/Prospectus in the section titled “The Business Combination Proposal,” which is incorporated herein by reference. Further reference is made to the information contained in Item 2.01 to this Current Report on Form 8-K, which is incorporated herein by reference.

 

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Election of Directors; Appointment of Certain Officers

The information contained in the sections titled “Directors and Executive Officers,” “Executive Compensation,” “Certain Relationships and Related Transactions, and Director Independence” and “Indemnification of Directors and Officers” in Item 2.01 to this Current Report on Form 8-K is incorporated herein by reference.

Effective as of the Closing, the following people were appointed as directors of the Company:

 

   

Class I directors: Key Compton, Timothy Hwang and Stanley McChrystal;

 

   

Class II directors: Michael J. Callahan, Manoj Jain, Keith Nilsson and Gerald Yao; and

 

   

Class III directors: Anna Sedgley, Brandon Sweeney and Conrad Yiu.

Effective as of the Closing, the executive officers of the Company are:

 

   

Timothy Hwang, Chief Executive Officer;

 

   

Gerald Yao, Chief Strategy Officer, Global Head of ESG;

 

   

Jon Slabaugh, Chief Financial Officer and Senior Vice President of Corporate Development;

 

   

Josh Resnik, President, General Counsel and Chief Operating Officer;

 

   

Krystal Putman-Garcia, Chief Marketing Officer and General Manager of Advocacy;

 

   

Reed Fawell, Senior Vice President and Chief Revenue Officer; and

 

   

Vibha Jain Miller, Senior Vice President of People and Diversity, Equality, Inclusion, Belonging and Accessibility.

Reference is made to the disclosure described in the Proxy Statement/Prospectus Statement in the section titled “New FiscalNote Management After the Business Combination” for biographical information about each of the directors and officers following the Business Combination, which is incorporated herein by reference.

2022 Long-Term Incentive Plan

On the Closing Date, the 2022 Plan became effective. The 2022 Plan is described in greater detail in the section of the Proxy Statement/Prospectus titled “The Long-Term Incentive Plan Proposal,” which is incorporated herein by reference.

The foregoing description of the 2022 Plan, including the description in the Proxy Statement/Prospectus referenced above, does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the 2022 Plan, which is included herein as Exhibit 10.9 and is incorporated herein by reference.

2022 Employee Stock Purchase Plan

On the Closing Date, the ESPP became effective. The ESPP is described in greater detail in the section of the Proxy Statement/Prospectus titled “The ESPP Proposal,” which is incorporated herein by reference.

The foregoing description of the ESPP, including the description in the Proxy Statement/Prospectus referenced above, does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the ESPP, which is included herein as Exhibit 10.10 and is incorporated herein by reference.

 

15


Item 5.03.

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The disclosure set forth in Item 3.03 of this Current Report on Form 8-K is incorporated in this Item 5.03 by reference.

 

Item 5.06.

Change in Shell Company Status.

As a result of the Business Combination, which fulfilled the definition of an “initial business combination” as required by DSAC’s organizational documents, the Company ceased to be a shell company upon the closing of the Business Combination. The material terms of the Business Combination are described in the sections titled “The Business Combination Proposal” and “The Business Combination Agreement” beginning on page 120 and 151, respectively, of the Proxy Statement/Prospectus, and are incorporated herein by reference.

 

Item 8.01.

Other Events.

By operation of Rule 12g-3(a) under the Exchange Act, the Company is the successor issuer to DSAC and has succeeded to the attributes of DSAC as the registrant, including DSAC’s SEC file number (001-39672) and CIK Code (1823466). The Company’s Class A common stock and public warrants are deemed to be registered under Section 12(b) of the Exchange Act, and the Company will hereafter file reports and other information with the SEC using DSAC’s SEC file number (001-39672).

The Company’s Class A common stock and public warrants are listed for trading on The New York Stock Exchange under the symbols “NOTE” and “NOTE.WS”, respectively, and the CUSIP numbers relating to the Company’s Class A common stock and public warrants are 337655 104 and 337655 112, respectively.

Holders of uncertificated shares of DSAC’s Class A common stock immediately prior to the Business Combination have continued as holders of shares of uncertificated shares of New FiscalNote Class A common stock.

Holders of DSAC’s shares who have filed reports under the Exchange Act with respect to those shares should indicate in their next filing, or any amendment to a prior filing, filed on or after the Closing Date that the Company is the successor to DSAC.

On July 29, 2022, the Company issued a press release announcing the closing of the Business Combination. The press release is attached hereto as Exhibit 99.1 hereto and is incorporated by reference herein.

 

Item 9.01.

Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The audited consolidated financial statements of Old FiscalNote for the years ended December 31, 2021 and 2020 were filed as part of the Proxy Statement/Prospectus and are incorporated herein by reference. The unaudited condensed consolidated financial statements of Old FiscalNote for the three months ended March 31, 2022 and 2021 were filed as part of the Proxy Statement/Prospectus and are incorporated herein by reference.

(b) Pro forma financial information.

The unaudited pro forma condensed combined financial balance sheet as of March 31, 2022 and the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2022 and the year ended December 31, 2021 of the Company are attached hereto as Exhibit 99.2 and are incorporated herein by reference.

 

16


(c) Exhibits.

 

Exhibit
Number

 

Description

  2.1†#   Agreement and Plan of Merger, dated as of November 7, 2021, by and among Duddell Street Acquisition Corp., Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (incorporated by reference to Annex A to the Proxy Statement/Prospectus).
  2.2   First Amendment to Agreement and Plan of Merger, dated as of May 9, 2022 by and among Duddell Street Acquisition Corp., Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc. (incorporated by reference to Annex A-2 to the Proxy Statement/Prospectus).
  3.1*   Certificate of Incorporation of New FiscalNote.
  3.2*   Bylaws of New FiscalNote.
  4.1   Warrant Agreement, dated as of October 28, 2020, by and among Duddell Street Acquisition Corp. and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 of DSAC’s Current Report on Form 8-K filed with the SEC on November 2, 2020).
10.1   Sponsor Agreement, dated as of November 7, 2021, by and among Duddell Street Holdings Limited, FiscalNote Holdings, Inc., Duddell Street Acquisition Corp. and certain of its shareholders (incorporated by reference to Exhibit 10.1 of DSAC’s Current Report on Form 8-K filed with the SEC on November 8, 2021).
10.2   Voting and Support Agreement, dated as of November 7, 2021, by and among Duddell Street Acquisition Corp., FiscalNote Holdings, Inc. and certain Equityholders of FiscalNote Holding, Inc. (incorporated by reference to Exhibit 10.3 of DSAC’s Current Report on Form 8-K filed with the SEC on November 8, 2021).
10.3   Backstop Agreement, dated as of November 7, 2021, by and among Duddell Street Acquisition Corp. and certain funds affiliated with the Sponsor (incorporated by reference to Exhibit 10.9 of the Proxy Statement/Prospectus).
10.4   First Amendment to Backstop Agreement, dated as of May 9, 2022, by and among Duddell Street Acquisition Corp. and certain funds affiliated with the Sponsor (incorporated by reference to Exhibit 10.22 of the Proxy Statement/Prospectus).
10.5*   Amended and Restated Registration Rights Agreement, dated as of July 29, 2022, by and among New FiscalNote, Duddell Street Holdings Limited and the other Holders signatory thereto.
10.6*   Form of Indemnification Agreement.
10.7*#   Amendment and Restatement Agreement, dated as of July 29, 2022, by and among FiscalNote, Inc., the other borrowers party thereto, the guarantors party thereto, Runway Growth Finance Corp., as administrative agent and collateral agent, and the lenders party thereto.

 

17


Exhibit
Number

 

Description

10.8*‡   Amended and Restated Security Agreement, dated as of October 19, 2020, by and among the persons listed on the signature pages thereto as “Grantors” and those additional entities that thereafter become parties thereto by executing the form of Joinder attached thereto as Annex 1, and Runway Growth Credit Fund Inc., as administrative agent and collateral agent for the lenders.
10.9*+   FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan.
10.10*+   FiscalNote Holdings, Inc. 2022 Employee Stock Purchase Plan.
10.11*+   Form of FiscalNote Holdings, Inc. Performance-Based Restricted Stock Unit Award under the FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan.
10.12*+   Form of FiscalNote Holdings, Inc. Restricted Stock Unit Award under the FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan.
10.13*+   Form of FiscalNote Holdings, Inc. Stock Option Award under the FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan.
21.1*   List of Subsidiaries.
99.1*   Press Release.
99.2*   Unaudited pro forma condensed combined financial information of the Company.
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

The annexes, schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.

#

The annexes, schedules, and certain exhibits to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.

Certain confidential information contained in this Exhibit has been omitted because it is (i) not material and (ii) of the type that the registrant treats as private or confidential.

+

Indicates a management contract or compensatory plan.

*

Filed herewith.

 

18


SIGNATURES

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.

 

FISCALNOTE HOLDINGS, INC.
By:  

/s/ Timothy Hwang

Name:   Timothy Hwang
Title:   Chief Executive Officer

Date: August 2, 2022

 

19

Exhibit 3.1

 

LOGO

CERTIFICATE OF INCORPORATION OF

FISCALNOTE HOLDINGS, INC.

ARTICLE I

NAME

The name of the corporation is FiscalNote Holdings, Inc. (hereinafter called the “Corporation”).

ARTICLE II

REGISTERED OFFICE AND AGENT

The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.

ARTICLE III

PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware or any applicable successor act thereto, as the same may be amended from time to time (the “DGCL”).

The Corporation is being incorporated in connection with the domestication of Duddell Street Acquisition Corp., a Cayman Islands exempted company limited by shares, to a Delaware corporation, which domestication is being effected in connection with the transactions contemplated by that certain Agreement and Plan of Merger entered into by the Cayman Company, Grassroots Merger Sub, Inc. and FiscalNote Holdings, Inc., a Delaware corporation, on November 7, 2021, and this Certificate of Incorporation (as amended and/or restated from time to time, including pursuant to any Preferred Stock Designation (as defined below), this “Certificate of Incorporation”) is being filed simultaneously with a certificate of corporate domestication effecting such domestication.

ARTICLE IV

CAPITAL STOCK

The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 1,809,000,000 shares, consisting of 1,700,000,000 shares of Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”), 9,000,000 shares of Class B Common Stock, par value $0.0001 per share (“Class B Common Stock”), and 100,000,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”). The number of authorized shares of Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below (i) the number of shares thereof then outstanding and (ii) with respect to the Class A Common Stock, the number of shares of Class A Common Stock reserved pursuant to Section 8 of Part A of this Article IV) by the affirmative vote of the holders of capital stock representing a majority of the voting power of all the then-outstanding shares of capital stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL.

 

1


The following is a statement of the designations and the powers, preferences, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

A. CLASS A COMMON STOCK AND CLASS B COMMON STOCK.

Unless otherwise indicated, references to “Sections” or “Subsections” in this Part A of this Article IV refer to sections and subsections of Part A of this Article IV.

1. Equal Status; General. Except as otherwise provided in this Certificate of Incorporation or required by applicable law, shares of Class A Common Stock and Class B Common Stock shall have the same rights, privileges and powers, rank equally (including as to dividends and distributions, and upon any liquidation, dissolution, distribution of assets or winding up of the Corporation), share ratably and be identical in all respects and as to all matters. The voting, dividend, liquidation and other rights, powers and preferences of the holders of Class A Common Stock and Class B Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock of any series as may be designated by the Board of Directors of the Corporation (the “Board”) upon any issuance of the Preferred Stock of any series.

2. Voting. Except as otherwise required by applicable law, at all meetings of stockholders and on all matters properly submitted to a vote of stockholders of the Corporation generally, each holder of Class A Common Stock, as such, shall have the right to one (1) vote per share of Class A Common Stock held of record by such holder and each holder of Class B Common Stock, as such, shall have the right to 25 votes per share of Class B Common Stock held of record by such holder. Except as otherwise required by applicable law or provided in this Certificate of Incorporation, the holders of shares of Class A Common Stock and Class B Common Stock, as such, shall (a) at all times vote together as a single class on all matters (including the election of directors) submitted to a vote of the stockholders of the Corporation generally, (b) be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation, as the same may be amended and/or restated from time to time (the “Bylaws”), and (c) be entitled to vote upon such matters and in such manner as may be provided by applicable law; provided, however, that, except as otherwise required by applicable law, holders of Class A Common Stock and Class B Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are exclusively entitled, either separately or together with the holders of one or more other such series of Preferred Stock, to vote thereon pursuant to this Certificate of Incorporation or applicable law. There shall be no cumulative voting.

3. Dividend and Distribution Rights. Shares of Class A Common Stock and Class B Common Stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time by the Board out of any assets or funds of the Corporation legally available therefor; provided, however, that in the event a dividend is paid in the form of shares of Class A Common Stock or Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares), then holders of Class A Common Stock shall be entitled to receive shares of Class A Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), and holders of Class B Common Stock shall be entitled to receive shares of Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), with holders of shares of Class A Common Stock and Class B Common Stock receiving, on a per share basis, an identical number of shares of Class A Common Stock or Class B Common Stock (or rights to acquire, or securities convertible into or exchangeable for, such shares, as the case may be), as

 

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applicable. Notwithstanding the foregoing, the Board may pay or make a disparate dividend or distribution per share of Class A Common Stock or Class B Common Stock (whether in the amount of such dividend or distribution payable per share, the form in which such dividend or distribution is payable, the timing of the payment, or otherwise) if such disparate dividend or distribution is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.

4. Subdivisions, Combinations or Reclassifications. Shares of Class A Common Stock or Class B Common Stock may not be subdivided, combined or reclassified unless the shares of the other class is concurrently therewith proportionately subdivided, combined or reclassified in a manner that maintains the same proportionate equity ownership between the holders of the outstanding Class A Common Stock and Class B Common Stock on the record date for such subdivision, combination or reclassification; provided, however, that shares of one such class may be subdivided, combined or reclassified in a different or disproportionate manner if such subdivision, combination or reclassification is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.

5. Liquidation, Dissolution or Winding Up. Subject to the preferential or other rights of any holders of Preferred Stock then outstanding, upon the dissolution, distribution of assets, liquidation or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of the Corporation, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably all assets of the Corporation available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution, distribution of assets or winding up is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class.

6. Certain Transactions.

6.1 Merger or Consolidation. In the case of any distribution or payment in respect of the shares of Class A Common Stock or Class B Common Stock, or any consideration into which such shares are converted, upon the consolidation or merger of the Corporation with or into any other entity, such distribution, payment or consideration that the holders of shares of Class A Common Stock or Class B Common Stock have the right to receive, or the right to elect to receive, shall be made ratably on a per share basis among the holders of the Class A Common Stock and Class B Common Stock as a single class; provided, however, that shares of such classes may receive, or have the right to elect to receive, different or disproportionate distribution, payment or consideration in connection with such consolidation, merger or other transaction in order to reflect the special rights, powers and privileges of holders of shares of Class B Common Stock under this Certificate of Incorporation (which may include, without limitation, securities distributable to the holders of, or issuable upon the conversion of, each share of Class B Common Stock outstanding immediately prior to such transaction having up to 25 times the voting power of any securities distributable to the holders of, or issuable upon the conversion of, each share of Class A Common Stock outstanding immediately prior to such transaction) or such other rights, powers, privileges or other terms that are no more favorable, in the aggregate, to the holders of the Class B Common Stock relative to the holders of the Class A Common Stock than those contained in this Certificate of Incorporation.

6.2 Third-Party Tender or Exchange Offers. The Corporation may not enter into any agreement pursuant to which a third party may by tender or exchange offer acquire any shares of Class A Common Stock or Class B Common Stock unless the holders of (a) the Class A Common Stock shall have the right to receive, or the right to elect to receive, the same form of consideration and the same amount of consideration on a per share basis as

 

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the holders of the Class B Common Stock would receive, or have the right to elect to receive, and (b) the Class B Common Stock shall have the right to receive, or the right to elect to receive, the same form of consideration and the same amount of consideration on a per share basis as the holders of the Class A Common Stock would receive, or have the right to elect to receive; provided, however, that shares of such classes may receive, or have the right to elect to receive, different or disproportionate consideration in connection with such tender or exchange offer in order to reflect the special rights, powers and privileges of the holders of shares of the Class B Common Stock under this Certificate of Incorporation (which may include, without limitation, securities exchangeable for each share of Class B Common Stock having up to 25 times the voting power of any securities exchangeable for each share of Class A Common Stock) or such other rights, powers, privileges or other terms that are no more favorable, in the aggregate, to the holders of the Class B Common Stock relative to the holders of the Class A Common Stock than those contained in this Certificate of Incorporation.

7. Conversion.

7.1 Optional Conversion of Class B Common Stock. Each share of Class B Common Stock shall be convertible, at any time or from time to time, into one (1) fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the Corporation (an “Optional Class B Conversion Event”). Before any holder of shares of Class B Common Stock shall be entitled to convert any shares of Class B Common Stock into shares of Class A Common Stock, such holder shall surrender the certificate or certificates therefor (if any), duly endorsed, at the principal corporate office of the Corporation or of any transfer agent for the Class B Common Stock, and shall provide written notice to the Corporation at its principal corporate office, of such conversion election and shall state therein the name or names (i) in which the certificate or certificates representing the shares of Class A Common Stock into which the shares of Class B Common Stock are so converted are to be issued (if such shares of Class A Common Stock are certificated) or (ii) in which such shares of Class A Common Stock are to be registered in book-entry form (if such shares of Class A Common Stock are uncertificated). If the shares of Class A Common Stock into which the shares of Class B Common Stock are to be converted are to be issued in a name or names other than the name of the holder of the shares of Class B Common Stock being converted, such notice shall be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the holder. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder, or to the nominee or nominees of such holder, a certificate or certificates representing the number of shares of Class A Common Stock to which such holder shall be entitled upon such conversion (if such shares of Class A Common Stock are certificated) or shall register such shares of Class A Common Stock in book-entry form (if such shares of Class A Common Stock are uncertificated). Such conversion shall be deemed to be effective immediately prior to the close of business on the date of such surrender of the certificate or certificates representing, or the notice or notices of issuance (if held in book-entry form) of, the shares of Class B Common Stock to be converted following or contemporaneously with the provision of written notice of such conversion election as required by this Subsection 7.1, the shares of Class A Common Stock issuable upon such conversion shall be deemed to be outstanding as of such time, and the Person or Persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be deemed to be the record holder or holders of such shares of Class A Common Stock as of such time. Notwithstanding anything herein to the contrary, shares of Class B Common Stock represented by a lost, stolen or destroyed stock certificate may be converted pursuant to an Optional Class B Conversion Event if the holder thereof notifies the Corporation or its transfer agent that such certificate has been lost, stolen or destroyed and makes an affidavit of that fact acceptable to the Corporation and executes an agreement acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificate.

 

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7.2 Automatic Conversion of Class B Common Stock. To the extent set forth below, each applicable share of Class B Common Stock shall automatically convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the occurrence of an event described below (a “Mandatory Class B Conversion Event”):

(a) Transfers. Each share of Class B Common Stock that is subject to a Transfer (as defined in Section 10), other than a Permitted Transfer (as defined in Section 10), shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the occurrence of such Transfer (other than a Permitted Transfer).

(b) Death or Permanent Disability of Holder of Class B Common Stock. Each outstanding share of Class B Common Stock held by a holder of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the earliest to occur of the death or Permanent Disability of such holder of Class B Common Stock.

(c) Reduction in Voting Power. Each outstanding share of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the first date on which the number of outstanding shares of Class B Common Stock (as such number of shares is equitably adjusted in respect of any reclassification, stock dividend, subdivision, combination or recapitalization of the Class B Common Stock) represents less than fifty percent (50%) of the number of shares of Class B Common Stock that were outstanding as of the Effective Date.

(d) Affirmative Vote. Each outstanding share of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the date specified by the affirmative vote of the holders of more than fifty percent (50%) of the then outstanding shares of Class B Common Stock, voting as a separate class.

(e) Seven (7) Years from the Effective Date. Each outstanding share of Class B Common Stock shall automatically, without further action by the Corporation or the holder thereof, convert into one (1) fully paid and nonassessable share of Class A Common Stock upon the date that is seven (7) years from the Effective Date.

7.3 Certificates. Each outstanding stock certificate (if shares are in certificated form) that, immediately prior to the occurrence of a Mandatory Class B Conversion Event, represented one or more shares of Class B Common Stock subject to such Mandatory Class B Conversion Event shall, upon such Mandatory Class B Conversion Event, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation shall, upon the request of any holder whose shares of Class B Common Stock have been converted into shares of Class A Common Stock as a result of an Optional Class B Conversion Event or a Mandatory Class B Conversion Event (either of the foregoing, a “Conversion Event”) and upon surrender by such holder to the Corporation of the outstanding certificate(s) formerly representing such holder’s shares of Class B Common Stock, if any (or, in the case of any lost, stolen or destroyed certificate, upon such holder providing an affidavit of that fact acceptable to the Corporation and executing an agreement acceptable to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificate), issue and deliver to such holder (or such other Person specified pursuant to Subsection 7.1) certificate(s) representing the shares of Class A Common Stock into which such holder’s shares of Class B Common Stock were converted as a result of such Conversion Event (if such shares are certificated) or, if such shares are uncertificated, register such shares in book-entry form. Each share of Class B Common Stock that is converted pursuant to Subsection 7.1 or 7.2 shall thereupon automatically be retired and shall not be available for reissuance.

 

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7.4 Policies and Procedures. The Corporation may, from time to time, establish such policies and procedures, not in violation of applicable law or the other provisions of this Certificate of Incorporation or Bylaws of the Corporation, relating to the conversion of the Class B Common Stock into Class A Common Stock, as it may deem necessary or advisable in connection therewith (it being understood, for the avoidance of doubt, that this sentence shall not authorize or empower the Corporation to expand upon the events that constitute a Mandatory Class B Conversion Event). If the Corporation has reason to believe that a Transfer or other Conversion Event giving rise to a conversion of shares of Class B Common Stock into Class A Common Stock has occurred but has not theretofore been reflected on the books of the Corporation (or in book-entry as maintained by the transfer agent of the Corporation), the Corporation may request that the holder of such shares furnish affidavits or other evidence to the Corporation as the Corporation reasonably deems necessary to determine whether a conversion of shares of Class B Common Stock to Class A Common Stock has occurred, and if such holder does not within ten (10) days after the date of such request furnish sufficient evidence to the Corporation (in the manner provided in the request) to enable the Corporation to determine that no such conversion has occurred, any such shares of Class B Common Stock, to the extent not previously converted, shall be immediately and automatically converted into shares of Class A Common Stock and the same shall thereupon be registered on the books and records of the Corporation (or in book-entry as maintained by the transfer agent of the Corporation). In connection with any action of stockholders taken at a meeting or by written consent, the stock ledger of the Corporation (or in book-entry as maintained by the transfer agent of the Corporation) shall be presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders or in connection with any written consent and the class or classes or series of shares held by each such stockholder and the number of shares of each class or classes or series held by such stockholder.

8. Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into Class A Common Stock; and if at any time the number of authorized but unissued shares of Class A Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Class B Common Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Class A Common Stock to such number of shares as shall be sufficient for such purpose.

9. Protective Provisions. Unless such action is first approved by the affirmative vote (or written consent) of the holders of two-thirds (2/3) of the then-outstanding shares of Class B Common Stock, voting as a separate class, in addition to any other vote required by applicable law, this Certificate of Incorporation or the Bylaws, prior to the Final Conversion Date, the Corporation shall not, whether by merger, consolidation, certificate of designation or otherwise (i) amend, alter, repeal or waive any provision of Part A of this Article IV (or adopt any provision inconsistent therewith), or (ii) authorize, or issue any shares of, any class or series of capital stock of the Corporation entitling the holder thereof to more than (1) vote for each share thereof or entitling any class or series of securities to designate or elect directors as a class or series separate from the Class A Common Stock and Class B Common Stock.

10. Issuance of Additional Shares. From and after the Effective Date, additional shares of Class B Common Stock may be issued only to a Qualified Stockholder.

11. Definitions. For purposes of this Certificate of Incorporation:

 

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Change of Control Transaction” means (i) the sale, lease, exchange, or other disposition (other than liens and encumbrances created in the ordinary course of business, including liens or encumbrances to secure indebtedness for borrowed money that are approved by the Board, so long as no foreclosure occurs in respect of any such lien or encumbrance) of all or substantially all of the Corporation’s property and assets (which shall for such purpose include the property and assets of any direct or indirect subsidiary of the Corporation), provided that any sale, lease, exchange or other disposition of property or assets exclusively between or among the Corporation and any direct or indirect subsidiary or subsidiaries of the Corporation shall not be deemed a “Change of Control Transaction”; (ii) the merger, consolidation, business combination, or other similar transaction of the Corporation with any other entity, other than a merger, consolidation, business combination, or other similar transaction that would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its Parent) more than fifty percent (50%) of the total voting power represented by the voting securities of the Corporation and more than fifty percent (50%) of the total number of outstanding shares of the Corporation’s capital stock, in each case as outstanding immediately after such merger, consolidation, business combination, or other similar transaction, and the stockholders of the Corporation immediately prior to the merger, consolidation, business combination, or other similar transaction continuing to own voting securities of the Corporation, the surviving entity or its Parent immediately following the merger, consolidation, business combination, or other similar transaction in substantially the same proportions (vis a vis each other) as such stockholders owned of the voting securities of the Corporation immediately prior to the transaction; and (iii) a recapitalization, liquidation, dissolution, or other similar transaction involving the Corporation, other than a recapitalization, liquidation, dissolution, or other similar transaction that would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or its Parent) more than fifty percent (50%) of the total voting power represented by the voting securities of the Corporation and more than fifty percent (50%) of the total number of outstanding shares of the Corporation’s capital stock, in each case as outstanding immediately after such recapitalization, liquidation, dissolution or other similar transaction, and the stockholders of the Corporation immediately prior to the recapitalization, liquidation, dissolution or other similar transaction continuing to own voting securities of the Corporation, the surviving entity or its Parent immediately following the recapitalization, liquidation, dissolution or other similar transaction in substantially the same proportions (vis a vis each other) as such stockholders owned of the voting securities of the Corporation immediately prior to the transaction.

Effective Date” means the date on which this Certificate of Incorporation is first effective.

Family Member” means with respect to any natural person who is a Qualified Stockholder (a) the spouse of such Qualified Stockholder, (b) the parents, grandparents, lineal descendants, siblings or lineal descendants of siblings of such Qualified Stockholder or (c) the parents, grandparents, lineal descendants, siblings or lineal descendants of siblings of the spouse of such Qualified Stockholder. Lineal descendants shall include adopted persons, but only so long as they are adopted during minority.

Fiduciary” means a Person who (a) is an executor, personal representative, administrator, trustee, manager, managing member, general partner, director, officer or any other agent of a Person and (b) manages, controls or otherwise has decision-making authority with respect to such Person, but, in each case, only to the extent that such Person may be removed, directly or indirectly, by one or more Qualified Stockholders and replaced with another Fiduciary selected, directly or indirectly, by one or more Qualified Stockholders.

Final Conversion Date” means the date on which no shares of Class B Common Stock shall remain outstanding.

 

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Founders” means, collectively, Timothy Hwang and Gerald Yao.

Liquidation Event” means any liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, or any Change of Control Transaction.

Parent” of an entity means any entity that directly or indirectly owns or controls a majority of the voting power of the voting securities of such entity.

Permanent Disability” means a permanent and total disability such that the holder of Class B Common Stock is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which would reasonably be expected to result in death within twelve (12) months or which has lasted or would reasonably be expected to last for a continuous period of not less than twelve (12) months as determined by a licensed medical practitioner.

Permitted Entity” means:

(a) a Permitted Trust for so long as such Permitted Trust is solely for the current benefit of a Qualified Beneficiary (and, for the avoidance of doubt, notwithstanding that a remainder interest in such Permitted Trust is for the benefit of any Person other than a Qualified Beneficiary);

(b) any general partnership, limited partnership, limited liability company, corporation, public benefit corporation or other entity, in each case, for so long as such entity is exclusively owned, by (1) one or more Qualified Stockholders, (2) one or more Family Members of such Qualified Stockholders and/or (3) any other Permitted Entity of such Qualified Stockholders;

(c) any foundation or similar entity or any Qualified Charity for so long as (i) one or more Qualified Stockholders continues to, directly or indirectly, exercise Voting Control over any shares of Class B Common Stock from time to time Transferred to such foundation or similar entity or Qualified Charity, and/or (ii) a Fiduciary of such foundation or similar entity or Qualified Charity exercises Voting Control over such shares of Class B Common Stock;

(d) an Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or a pension, profit sharing, stock bonus or other type of plan or trust of which such Qualified Stockholder is a participant or beneficiary and which satisfies the requirements for qualification under Section 401 of the Internal Revenue Code for so long as such Qualified Stockholder has sole dispositive power and exclusive Voting Control with respect to the shares of Class B Common Stock held in such account, plan or trust;

(e) the executor or personal representative of the estate of a Qualified Stockholder upon the death of such Qualified Stockholder solely to the extent the executor or personal representative is acting in the capacity of executor or personal representative of such estate;

(f) a revocable living trust, which revocable living trust is itself both a Permitted Trust and a Qualified Stockholder, during the lifetime of the natural person grantor of such trust; or

(g) a revocable living trust (including any irrevocable administrative trust resulting from the death of the natural person grantor of such trust) which trust is itself both a Permitted Trust and a Qualified Stockholder, following the death of the natural person grantor of such trust, solely to the extent that such shares are held in such trust pending distribution to the beneficiaries designated in such trust.

 

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Except as explicitly provided for herein, a Permitted Entity of a Qualified Stockholder shall not cease to be a Permitted Entity solely by reason of the death of that Qualified Stockholder.

Permitted Transfer” means, and is restricted to, any Transfer of a share of Class B Common Stock:

(a) by a Qualified Stockholder that is not a Permitted Entity to (i) one or more Family Members of such Qualified Stockholder, (ii) any Permitted Entity of such Qualified Stockholder, or (iii) any Permitted Entity of one or more Family Members of such Qualified Stockholder;

(b) by a Permitted Entity of a Qualified Stockholder to (i) such Qualified Stockholder or one or more Family Members of such Qualified Stockholder, (ii) any other Permitted Entity of such Qualified Stockholder, or (iii) any Permitted Entity of one or more Family Members of such Qualified Stockholder; or

(c) any Transfer approved in advance by the Board, or a duly authorized committee of the Board, upon a determination that such Transfer is not inconsistent with the purposes of the foregoing provisions of this definition of “Permitted Transfer.”

For the avoidance of doubt, the direct Transfer of any share or shares of Class B Common Stock by a holder thereof to any other Person shall qualify as a “Permitted Transfer” within the meaning of this Section, if such Transfer could have been completed indirectly through one or more transactions involving more than one Transfer, so long as each Transfer in such transaction or transactions would otherwise have qualified as a “Permitted Transfer” within the meaning of this Section. For the further avoidance of doubt, a Transfer may qualify as a “Permitted Transfer” within the meaning of this Section under any one or more than one of the clauses of this Section as may be applicable to such Transfer, without regard to any proviso in, or requirement of, any other clause(s) of this Section.

Permitted Transferee” means, as of any date of determination, a Person that is entitled to be a transferee of shares of Class B Common Stock in a Transfer that, as of such date, would constitute a Permitted Transfer.

Permitted Trust” means a bona fide trust where each trustee is (a) a Qualified Stockholder; (b) a Family Member of a Qualified Stockholder; or (c) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies, accounting, legal or financial advisor, or bank trust departments.

Person” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization or other entity, whether domestic or foreign.

Qualified Beneficiary” means (i) one or more Qualified Stockholders, (ii) one or more Family Members of a Qualified Stockholder and/or (iii) any other Permitted Entities of one or more Qualified Stockholders.

Qualified Charity” means a domestic U.S. charitable organization, contributions to which are deductible for federal income, estate, gift and generation skipping transfer tax purposes.

Qualified Stockholder” means (i) the Founders, and (ii) any Person that is a Permitted Transferee.

 

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Requisite Stockholder Consent” means (i) prior to the Voting Threshold Date, the action at a meeting or by written consent (to the extent permitted under this Certificate of Incorporation) of the holders of a majority in voting power of the shares of capital stock of the Corporation that would then be entitled to vote in the election of directors at an annual meeting of stockholders, and (ii) on and after the Voting Threshold Date, the action at a meeting or by written consent (to the extent permitted under this Certificate of Incorporation) of the holders of two-thirds (2/3) of the voting power of the shares of capital stock of the Corporation that would then be entitled to vote in the election of directors at an annual meeting of stockholders.

Transfer” of a share of Class B Common Stock means, directly or indirectly, any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law (including by merger, consolidation or otherwise), including, without limitation, the transfer of a share of Class B Common Stock to a broker or other nominee or the transfer of, or entering into a binding agreement with respect to, Voting Control over such share by proxy or otherwise. A Transfer shall also be deemed to have occurred with respect to a share of Class B Common Stock beneficially held by a Person that received shares in a Permitted Transfer if there occurs any act or circumstance that causes such Person to no longer be a Permitted Transferee. In addition, for the avoidance of doubt, a Transfer shall be deemed to have occurred if a holder that is a partnership, limited partnership, limited liability company or corporation distributes or otherwise transfers its shares of Class B Common Stock to its partners, stockholders, members or other equity owners. Notwithstanding the foregoing, the following shall not be considered a Transfer:

(a) the granting of a revocable proxy to officers or directors of the Corporation at the request of the Board in connection with (i) actions to be taken at an annual or special meeting of stockholders, or (ii) any other action of the stockholders permitted by this Certificate of Incorporation;

(b) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock, which voting trust, agreement or arrangement does not involve any payment of cash, securities or other property to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner; for the avoidance of doubt, any voting trust, agreement or arrangement entered into prior to the Effective Date shall not constitute a Transfer;

(c) the pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall constitute a Transfer unless such foreclosure or similar action qualifies as a Permitted Transfer at such time;

(d) any change in the trustee(s) or the Person(s) and/or entity(ies) having or exercising Voting Control over shares of Class B Common Stock held by a Permitted Entity, provided that following such change such Permitted Entity continues to be a Permitted Entity;

(e) (1) the assignment, transfer, conveyance, hypothecation or other transfer or disposition of shares of Class B Common Stock by a Qualified Stockholder to a grantor retained annuity trust (a “GRAT”) for which the trustee is (A) such Qualified Stockholder, (B) a Family Member of such Qualified Stockholder, (C) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies, accounting, legal or financial advisors, or bank trust departments, (D) an employee of the Corporation or a member of the Board or (E) solely in the case of any such trust established by a natural Person grantor, any other bona fide trustee; (2) the change in trustee for such a GRAT from one of the Persons identified in the foregoing subclauses (A) through (E) to another Person identified in the foregoing subclauses (A) through (E); and (3) the distribution of such shares of Class B Common Stock from such GRAT to such Qualified Stockholder (provided, however, that the distribution of shares of Class B Common Stock to any beneficiary of such GRAT except such Qualified Stockholder shall constitute a Transfer unless such distribution qualifies as a Permitted Transfer at such time);

 

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(f) any Transfer of shares of Class B Common Stock, whether by a Qualified Stockholder or a Permitted Entity, to a broker or other nominee for so long as the transferor retains (i) Voting Control, (ii) sole dispositive power over such shares of Class B Common Stock, and (iii) the economic consequences of ownership of such shares of Class B Common Stock;

(g) entering into a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, with a broker or other nominee; provided, however, that a sale of such shares of Class B Common Stock pursuant to such plan shall constitute a “Transfer” at the time of such sale;

(h) in connection with a Change of Control Transaction (1) the entering into a support, voting, tender or similar agreement or arrangement, (2) the granting of any proxy and/or (3) the tendering of any shares in any tender or exchange offer for all of the outstanding shares of Class A Common Stock and Class B Common Stock;

(i) due to the fact that the spouse of any holder of shares of Class B Common Stock possesses or obtains an interest in such holder’s shares of Class B Common Stock arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a “Transfer” of such shares of Class B Common Stock; provided that any transfer of shares by any holder of shares of Class B Common Stock to such holder’s spouse, including a transfer in connection with a divorce proceeding, domestic relations order or similar legal requirement, shall constitute a “Transfer” of such shares of Class B Common Stock unless (1) otherwise exempt from the definition of Transfer, or (2) in connection with such divorce proceeding, domestic relations order or similar legal requirement, a Qualified Stockholder is entitled to retain (and for so long as a Qualified Stockholder does actually retain) either (x) the exclusive right to exercise the power to vote or direct the voting of such shares of Class B Common Stock, or (y) sole dispositive power over such shares of Class B Common Stock; and

(j) entering into a support, voting, tender or similar agreement, arrangement or understanding (with or without granting a proxy) in connection with a Liquidation Event or consummating the actions or transactions contemplated therein (including, without limitation, tendering shares of Class B Common Stock in connection with a Liquidation Event, the consummation of a Liquidation Event or the sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of shares of Class B Common Stock or any legal or beneficial interest in shares of Class B Common Stock in connection with a Liquidation Event), provided that such Liquidation Event was approved by the Board.

Voting Control” means, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.

Voting Threshold Date” means the first date on which the issued and outstanding shares of Class B Common Stock represents less than 50% of the total voting power of the then outstanding shares of capital stock of the Corporation that would then be entitled to vote in the election of directors at an annual meeting of stockholders.

B. PREFERRED STOCK

Subject to Article IV, Section 9, Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board as hereinafter provided. Any shares of Preferred Stock which may be redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law.

 

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Subject to Article IV, Section 9, authority is hereby expressly granted to the Board from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution or resolutions providing for the issuance of the shares thereof and by filing a certificate of designations relating thereto in accordance with the DGCL (a “Preferred Stock Designation”), to determine and fix the number of shares of such series and such voting powers (if any) and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the full extent now or hereafter permitted by the DGCL. Without limiting the generality of the foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to any other series of Preferred Stock to the extent permitted by law.

ARTICLE V

AMENDMENT OF THE CERTIFICATE OF INCORPORATION AND CHANGE OF CONTROL TRANSACTIONS

The Corporation reserves the right to amend, alter, change, adopt or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation; provided, however, that, notwithstanding any other provision of this Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of shares of any class or series of capital stock of the Corporation required by law or by this Certificate of Incorporation, so long as any shares of Class A Common Stock and Class B Common Stock remain outstanding, the Corporation shall not, without the prior affirmative vote of the holders of two-thirds (2/3) of the outstanding shares of Class A Common Stock and Class B Common Stock, voting together as a single class, directly or indirectly, whether by amendment, or through merger, recapitalization, consolidation or otherwise amend, alter, change, repeal or adopt any provision of this Certificate of Incorporation or approve any Change of Control Transaction. For the avoidance of doubt, (i) nothing in the immediately preceding proviso shall limit the rights of the Board as specified in Article IV, Part B (as qualified by Section 9 of Part A of Article IV) or Article VI of this Certificate of Incorporation, and (ii) notwithstanding anything in this Article V to the contrary, any amendment to a provision that contemplates a specific approval requirement by the stockholders (or any class of capital stock of the Corporation) in this Certificate of Incorporation (including the definition of Requisite Stockholder Consent and Voting Threshold Date) shall require the greater of (x) the specific approval requirement by the stockholders (or any class of capital stock of the Corporation) contemplated in such provision, and (y) the approval requirements contemplated by this Article V.

ARTICLE VI

AMENDMENT OF THE BYLAWS

In furtherance and not in limitation of the powers conferred upon it by the DGCL, and subject to the terms of any series of Preferred Stock, the Board shall have the power to adopt, amend, alter or repeal the Bylaws of the Corporation by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board at which a quorum is present in any manner not inconsistent with the laws of the State of Delaware or this Certificate of Incorporation. The stockholders may not adopt, amend, alter or repeal the Bylaws of the Corporation, or adopt any provision inconsistent therewith, unless such action is approved, in addition to any other vote required by this Certificate of Incorporation, by the Requisite Stockholder Consent.

 

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ARTICLE VII

BOARD OF DIRECTORS

This Article VII is inserted for the management of the business and for the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders.

(A) General Powers The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as otherwise provided by law.

(B) Number of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of the directors of the Corporation shall be fixed from time to time by the Board; provided, further, that unless otherwise approved by the Requisite Stockholder Consent, the number of the directors shall be no less than five (5) and shall not exceed twelve (12). For the avoidance of doubt, no decrease in the number of directors constituting the Board shall shorten the term of any incumbent director.

(C) Classified Board. Subject to the special rights of the holders of any series of Preferred Stock to elect directors, the directors of the Corporation shall be divided, with respect to the time for which they severally hold office, into three classes designated as Class I, Class II and Class III, respectively (the “Classified Board”). The Board is authorized to assign members of the Board already in office to such classes of the Classified Board. The number of directors in each class shall be divided as nearly equal as is practicable. The initial term of office of the Class I directors shall expire at the Corporation’s first annual meeting of stockholders following the Effective Date, the initial term of office of the Class II directors shall expire at the Corporation’s second annual meeting of stockholders following the Effective Date, and the initial term of office of the Class III directors shall expire at the Corporation’s third annual meeting of stockholders following the Effective Date. At each annual meeting of stockholders following the Effective Date, directors elected to succeed those directors of the class whose terms then expire shall be elected for a term of office expiring at the third succeeding annual meeting of stockholders after their election.

(D) Tenure. Each director shall be elected or appointed for a term of office continuing until the annual meeting of stockholders of the Corporation at which such director’s term expires. Each director shall hold office until such director’s successor is elected and qualified, or until such director’s earlier death, resignation, retirement, disqualification or removal from office. Any director may resign at any time upon notice to the Corporation given in writing by any electronic transmission permitted in the Corporation’s Bylaws or in accordance with applicable law. In the event of any increase or decrease in the authorized number of directors, (a) each director then serving as such shall nevertheless continue as a director of the class of which he or she is a member and (b) the newly created or eliminated directorships resulting from such increase or decrease shall be apportioned by the Board among the classes of directors so as to make all classes as nearly equal in number as is practicable, provided that no decrease in the number of directors constituting the Board shall shorten the term of any director.

(E) Vacancies; Newly Created Directorships. Subject to the rights of holders of any series of Preferred Stock and subject to any contractual rights duly granted by the Corporation in connection therewith, and notwithstanding the requirement that the three classes shall be as nearly equal in number of directors as possible, newly created directorship that results from an increase in the number of directors or any vacancy on the Board that results from the death, disability, resignation, retirement, disqualification or removal of any director or from any other cause shall be filled: (i) prior to the Voting Threshold Date, solely by the stockholders of the Corporation with the Requisite Stockholder Consent unless any such vacancy or newly created directorships remains unfilled for at least sixty (60) days, in which case such vacancy or newly created directorships may also be filled by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director; or (ii) on or after the Voting Threshold Date solely by the affirmative vote of a majority of

 

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the total number of directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected in accordance with the preceding sentence shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which the director has been assigned expires or until such director’s successor shall have been duly elected and qualified, or until such director’s earlier death, resignation, disqualification or removal. If the number of such directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible. No decrease in the authorized number of directors shall shorten the term of any incumbent director. If any newly created directorship may be assigned to more than one class consistent with the requirement that the number of directors in each class shall be divided as nearly equal as is practicable, the Board shall assign such directorship to the available class with the earliest expiring term of office.

(F) Removal. Subject to the rights of the holders of any series of Preferred Stock expressly set forth in a Preferred Stock Designation adopted in compliance with this Certification of Incorporation, no director may be removed from office except for cause and only with and immediately upon the Requisite Stockholder Consent.

(G) Committees. Pursuant to the Bylaws of the Corporation, the Board may establish one or more committees to which may be delegated any or all of the powers and duties of the Board to the full extent permitted by law.

(H) Stockholder Nominations and Introduction of Business. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the Bylaws.

(I) Preferred Stock Directors. During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to and in accordance with the provisions of Article IV hereof or any Preferred Stock Designation, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total number of authorized directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions, and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his earlier death, disqualification, resignation or removal. Except as otherwise provided for or fixed pursuant to and in accordance with the provisions of Article IV hereof or any Preferred Stock Designation, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, all such additional directors elected by the holders of such stock, or elected or appointed to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors shall automatically cease to be qualified as directors, the terms of office of all such directors shall forthwith terminate and the total authorized number of directors of the Corporation shall be reduced accordingly.

ARTICLE VIII

ELECTION OF DIRECTORS

Unless and except to the extent that the Bylaws shall so require, the election of directors of the Corporation need not be by written ballot. The vote required for election of a director by the stockholders at a meeting of stockholders in which a quorum is present shall be the affirmative vote of a plurality of the votes cast by stockholders entitled to vote in such election.

 

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ARTICLE IX

LIMITATION OF DIRECTOR LIABILITY

To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that nothing contained in this Article IX shall eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to the provisions of Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. No repeal or modification of this Article IX shall apply to or have any adverse effect on any right or protection of, or any limitation of the liability of, a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

ARTICLE X

INDEMNIFICATION

The Corporation may indemnify, and advance expenses to, to the fullest extent permitted by law, any person who was or is a party to or is threatened to be made a party to any threatened, pending or completed action, suit, investigation, arbitration or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that the person is or was a director, officer, employee or agent of the Corporation or any of its subsidiaries or, while a director or officer of the Corporation or any of its subsidiaries, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture or trust (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes, and penalties and amounts paid in settlement) reasonably incurred by such indemnitee in connection with such proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay as incurred the expenses (including attorneys’ fees) incurred by an indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition (including by making payment directly to applicable third parties if requested by the indemnitee); provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking, by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this Article X or otherwise. The rights to indemnification and advancement of expenses conferred by this Article X shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Article X, except for proceedings to enforce rights to indemnification and advancement of expenses (which are, for the avoidance of doubt, indemnified proceedings and expenses), the Corporation shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was, or is, authorized by the Board. The rights to indemnification and advancement of expenses conferred on any indemnitee by this Article X shall not be exclusive of any other rights that any indemnitee may have or hereafter acquire under law, this Certificate of Incorporation, the Bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise. Any repeal or amendment of this Article X by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Certificate of Incorporation inconsistent with this Article X, shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. This Article X shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than indemnitees.

 

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ARTICLE XI

CONSENT OF STOCKHOLDERS IN LIEU OF MEETING

Subject to the terms of any series of Preferred Stock, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of the stockholders and may not be effected by written consent in lieu of a meeting; provided, that prior to the Voting Threshold Date, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand, overnight courier or by certified or registered mail, return receipt requested.

ARTICLE XII

SPECIAL MEETING OF STOCKHOLDERS

Special meetings of stockholders for any purpose or purposes may be called at any time by the Board, the Chairperson of the Board or the Chief Executive Officer of the Corporation, and may not be called by another other Person or Persons; provided that, prior to the Final Conversion Date, special meetings of stockholders for any purpose or purposes may also be called by or at the request of stockholders of the Corporation collectively holding shares of capital stock of the Corporation with voting power sufficient to provide the Requisite Stockholder Consent. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

ARTICLE XIII

FORUM SELECTION

Unless the Corporation consents in writing to the selection of an alternative forum, (i) the Court of Chancery (the “Chancery Court”) of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Corporation, (2) any action asserting a claim of breach of a fiduciary duty owed by, or any other wrongdoing by, any current or former director, officer, other employee or stockholder of the Corporation, (3) any action asserting a claim against the Corporation arising pursuant to any provision of the DGCL, this Certificate of Incorporation or the Bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery, (4) any action to interpret, apply, enforce or determine the validity of any provisions of this Certificate of Incorporation or the Bylaws, or (5) any other action asserting a claim governed by the internal affairs doctrine and (ii) notwithstanding anything to the contrary herein, but subject to the foregoing provisions of this Article XIII, the federal district courts of the United States shall be the exclusive forum for the resolution of any action, suit or proceeding asserting a cause of action arising under the Securities Act of 1933, as amended. If any action the subject matter of which is within the scope of the preceding sentence is filed in a court other than the applicable courts specified in the immediately preceding sentence (a “Foreign Action”) in the name of

 

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any stockholder, such stockholder shall, to the fullest extent permitted by applicable law, be deemed to have consented to (a) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the preceding sentence and (b) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder. This provision will not apply to claims arising under the Securities Exchange Act of 1934, as amended, or other federal securities laws for which there is exclusive federal jurisdiction. Any Person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XIII.

ARTICTLE XIV

MISCELLANEOUS

If any provision or provisions of this Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible and without limiting any other provisions of this Certificate of Incorporation (or any other provision of the Bylaws or any agreement entered into by the Corporation), the provisions of this Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to, or for the benefit of, the Corporation to the fullest extent permitted by law.

To the fullest extent permitted by law, each and every Person purchasing or otherwise acquiring any interest (of any nature whatsoever) in any shares of the capital stock of the Corporation shall be deemed, by reason of and from and after the time of such purchase or other acquisition, to have notice of and to have consented to all of the provisions of (a) this Certificate of Incorporation, (b) the Bylaws and (c) any amendment to this Certificate of Incorporation or the Bylaws enacted or adopted in accordance with this Certificate of Incorporation, the Bylaws and applicable law.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, this Certificate of Incorporation has been executed this 28th day of July, 2022.

 

/s/ Manoj Jain

MANOJ JAIN, Incorporator

 

8/F Printing House

6 Duddell Street

Hong Kong.

 

Signature Page to Certificate of Incorporation

Exhibit 3.2

BYLAWS

OF

FISCALNOTE HOLDINGS, INC.


ARTICLE I

STOCKHOLDERS

1.1 Place of Meetings. All meetings of stockholders shall be held at such place, if any, as may be designated from time to time by the Board of Directors (the “Board”) of FiscalNote Holdings, Inc. (the “Corporation”), the Chairperson of the Board or the Chief Executive Officer or, if not so designated, at the principal office of the Corporation.

1.2 Annual Meeting. The annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time designated by the Board, the Chairperson of the Board or the Chief Executive Officer. The Corporation may postpone, recess, reschedule or cancel any previously scheduled annual meeting of stockholders.

1.3 Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by only the Board, the Chairperson of the Board or the Chief Executive Officer, and may not be called by any other person or persons; provided that, prior to the Final Conversion Date (as defined in the Certificate of Incorporation), special meetings of stockholders for any purpose or purposes may also be called by or at the request of stockholders of the Corporation collectively holding shares of capital stock of the Corporation with voting power sufficient to provide the Requisite Stockholder Consent (as defined in the Certificate of Incorporation). Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. The Corporation may postpone, reschedule or cancel any previously scheduled meeting of stockholders; provided, however, that with respect to any special meeting of stockholders of the Corporation previously scheduled at the request of the Requisite Stockholder Consent, the Corporation shall not postpose, reschedule or cancel any such special meeting without the prior written consent of the stockholders who comprised the Requisite Stockholder Consent.

1.4 Notice of Meetings. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, notice of each meeting of stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of the meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice to stockholders given by the Corporation shall be effective if given by electronic transmission in accordance with the General Corporation Law of the State of Delaware (the “DGCL”). The notices of all meetings shall state the place, if any, date and time of the meeting, the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting). The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If notice is given by mail, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. If notice is given by electronic transmission, such notice shall be deemed given at the time specified in Section 232 of the DGCL.

1.5 Voting List. The Corporation shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders of record entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder; provided, that such list shall not be required to contain the electronic mail address or other electronic contact information of any stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least ten (10) days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders. If the meeting is to be held at a place, then the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be examined by any stockholder who is present. If the meeting


is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger contemplated by this Section 1.5 shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this Section 1.5 or entitled to vote in person or by proxy at any meeting of stockholders.

1.6 Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, at each meeting of stockholders the holders of a majority in voting power of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business; provided, however, that where a separate vote by a class or classes or series of capital stock is required by law or the Certificate of Incorporation, the holders of a majority in voting power of the shares of such class or classes or series of the capital stock of the Corporation issued and outstanding and entitled to vote on such matter, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to the vote on such matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.

1.7 Adjournments. Any meeting of stockholders may be adjourned from time to time to any other time and to the same or some other place at which a meeting of stockholders may be held under these Bylaws by the Board, the chairperson of the meeting or, if directed to be voted on by the chairperson of the meeting, by a majority of the votes cast by stockholders present or represented at the meeting and entitled to vote thereon, although less than a quorum. It shall not be necessary to notify any stockholder of any adjournment of thirty (30) days or less if the time and place of the adjourned meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which adjournment is taken. At the adjourned meeting, the stockholders, or the holders of any class or series of stock entitled to vote separately as a class, as the case may be, may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment, a new record date is fixed for determination of stockholders entitled to vote at the adjourned meeting (in which case the Board shall fix the same or an earlier date as the record date for determining stockholders entitled to notice of such adjourned meeting and shall give notice of the adjourned meeting to each stockholder of record as of such date). At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.

1.8 Voting and Proxies. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person or may authorize another person or persons to vote for such stockholder by proxy. Except as otherwise limited therein, proxies shall entitle the persons authorized thereby to vote at any adjournment of such meeting. Proxies shall be filed with the Secretary of the Corporation. No such proxy shall be voted upon after three years from its date, unless the proxy expressly provides for a longer period. A proxy may be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power, regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

1.9 Action at Meeting. When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting shall be decided by a majority of the votes cast by the holders of all of the shares of stock present in person or represented by proxy at the meeting and voting affirmatively or negatively on such matter (or if one or more class, classes or series of stock are entitled to vote as a separate class or series, then a majority of the votes cast by the holders of the shares of stock of such class, classes or series entitled to vote as a separate class or series present or represented by proxy at the meeting and voting affirmatively or negatively on such matter), except when a different or minimum vote is required by law,


regulation applicable to the Corporation or its securities, the rules or regulations of any stock exchange applicable to the Corporation, the Certificate of Incorporation or these Bylaws, in which case such different or minimum vote shall be the required vote on such matter. When a quorum is present at any meeting, in any election by stockholders of directors, directors shall be elected by the affirmative vote of a plurality of the votes cast by stockholders entitled to vote in such election.

1.10 Nomination of Directors.

(A) Except as otherwise provided by the Certificate of Incorporation and for any directors entitled to be elected by the holders of preferred stock, at any meeting of stockholders, only persons who are nominated in accordance with the procedures in this Section 1.10 shall be eligible for election as directors. Nominations of persons for election to the Board at an annual meeting of stockholders or a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting may be made (i) by or at the direction of the Board or any duly authorized committee thereof or (ii) by any stockholder of the Corporation who (x) timely complies with the notice procedures in Section 1.10(B), (y) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting and (z) is entitled to vote at such meeting and on such election. Notwithstanding anything in this Section 1.10 to the contrary, only persons nominated for election as a director to fill any term of a directorship that expires on the date of the annual meeting pursuant to Section 2.4 will be considered for election at such meeting.

(B) To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the Corporation as follows: (i) in the case of an election of directors at an annual meeting of stockholders, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting (which date of the preceding year’s annual meeting shall, for purposes of Sections 1.10 and 1.11 hereof with respect to the Corporation’s first annual meeting of stockholders following the listing of its shares on a national securities exchange, be deemed to have occurred on August 1, 2022); provided, however, that in the event that the date of the annual meeting is advanced by more than thirty (30) days, or delayed by more than seventy (70), from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which public disclosure of the date of such annual meeting is first made; or (ii) in the case of an election of directors at a special meeting of stockholders, provided that directors are to be elected at such special meeting as set forth in the Corporation’s notice of meeting and provided further that the nomination made by the stockholder is for one of the director positions that the notice of meeting states will be filled at such special meeting, not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of (x) the 90th day prior to such special meeting and (y) the tenth day following the day on which public disclosure of the date of such special meeting for the election of directors is first made. The number of nominees a stockholder may nominate for election at a meeting (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at the meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such meeting. In no event shall the adjournment or postponement of a meeting (or the public disclosure thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth: (A) as to each proposed nominee (1) such person’s name, age, business address and, if known, residence address, (2) such person’s principal occupation or employment, (3) the class(es) and series and number of shares of stock of the Corporation that are, directly or indirectly, owned, beneficially or of record, by such person, (4) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among (x) the stockholder, the beneficial owner, if any, on whose behalf the nomination is being made and the respective affiliates and associates of, or others acting in concert with, such stockholder and such beneficial owner, on the one hand, and (y) each proposed nominee, and his or her respective affiliates and associates, or others acting in concert with such nominee(s), on the other hand, including all information that would be required to be disclosed pursuant to Item 404 of Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made or any affiliate or associate thereof or person acting in concert therewith were the “registrant” for purposes of such Item and the proposed nominee were a director or executive officer of such registrant, and (5) any other information


concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (B) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is being made (1) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (2) the class(es) and series and number of shares of stock of the corporation that are, directly or indirectly, owned, beneficially or of record, by such stockholder and such beneficial owner, (3) a description of any agreement, arrangement or understanding between or among such stockholder and/or such beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are being made or who may participate in the solicitation of proxies in favor of electing such nominee(s), (4) a description of any agreement, arrangement or understanding (including any derivative or short positions, swaps, profit interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that has been entered into by, or on behalf of, such stockholder or such beneficial owner, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such stockholder or such beneficial owner with respect to shares of stock of the Corporation, (5) any other information relating to such stockholder and such beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (6) a representation that such stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and on such election and intends to appear in person or by proxy at the meeting to nominate the person(s) named in its notice and (7) a representation whether such stockholder and/or such beneficial owner intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock reasonably believed by such stockholder or such beneficial owner to be sufficient to elect the nominee (and such representation shall be included in any such proxy statement and form of proxy) and/or (y) otherwise to solicit proxies or votes from stockholders in support of such nomination (and such representation shall be included in any such solicitation materials). Not later than ten (10) days after the record date for determining the stockholders entitled to vote at the meeting, the information required by Items (A)(1)-(5) and (B)(1)-(5) of the prior sentence shall be supplemented by the stockholder giving the notice to provide updated information as of such record date. In addition, to be effective, the stockholder’s notice must be accompanied by the written consent of the proposed nominee to serve as a director if elected and to being named in the Corporation’s proxy statement and associated proxy card as a nominee of the stockholder. The Corporation may require any proposed nominee to furnish such other information as the Corporation may reasonably require to, among other things, determine the eligibility of such proposed nominee to serve as a director of the Corporation or whether such nominee would be independent under applicable Securities and Exchange Commission and stock exchange rules and the Corporation’s publicly disclosed corporate governance guidelines, as applicable. A stockholder shall not have complied with this Section 1.10(B) if the stockholder (or beneficial owner, if any, on whose behalf the nomination is made) solicits or does not solicit, as the case may be, proxies or votes in support of such stockholder’s nominee in contravention of the representations with respect thereto required by this Section 1.10.

(C) The chairperson of any meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 1.10 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee in compliance with the representations with respect thereto required by this Section 1.10), and if the chairperson should determine that a nomination was not made in accordance with the provisions of this Section 1.10, the chairperson shall so declare to the meeting and such nomination shall not be brought before the meeting. Without limiting the foregoing, in advance of any meeting of stockholders, the Board shall also have the power to determine whether any nomination was made in accordance with the provisions of this Section 1.10 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee in compliance with the representations with respect thereto required by this Section 1.10).

(D) Except as otherwise required by law, nothing in this Section 1.10 shall obligate the Corporation or the Board to include in any proxy statement or other stockholder communication distributed on behalf of the Corporation or the Board information with respect to any nominee for director submitted by a stockholder.


(E) Notwithstanding the foregoing provisions of this Section 1.10, unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present a nomination, such nomination shall not be brought before the meeting, notwithstanding that proxies in respect of such nominee may have been received by the Corporation. For purposes of this Article I, to be considered a “qualified representative” of the stockholder, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.

(F) For purposes of this Article I, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(G) Notwithstanding anything in this Section 1.10 to the contrary, in the event that the number of directors to be elected to the Board at any annual meeting is increased effective after the time period for which nominations would otherwise be due under Section 1.10(B) and there is no public disclosure by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by Section 1.10(B) with respect to nominations for such annual meeting shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public disclosure is first made by the Corporation.

1.11 Notice of Business to be Brought Before a Meeting.

(A) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business (other than the nominations of persons for election to the Board) must constitute a proper matter for stockholder action and must be (i) specified in a notice of meeting given by or at the direction of the Board or any duly authorized committee thereof, (ii) if not specified in a notice of meeting, otherwise brought before the meeting by the Board or any duly authorized committee thereof or the Chairperson of the Board or (iii) otherwise properly brought before the meeting by a stockholder who (A) (1) was a stockholder of record of the Corporation both at the time of giving the notice provided for in this Section 1.11 and at the time of the meeting, (2) is entitled to vote at the meeting, and (3) has complied with this Section 1.11 in all applicable respects or (B) properly made such proposal in compliance with Rule 14a-8 under the Exchange Act. The foregoing clause (iii) shall be the exclusive means for a stockholder to propose business to be brought before an annual meeting of the stockholders. Notwithstanding anything herein to the contrary, unless otherwise required by law, if a stockholder seeking to bring business before an annual meeting pursuant to clause (iii) of this Section 1.11(A) (or a qualified representative of the stockholder) does not appear at the meeting to present the proposed business, such proposed business shall not be transacted, notwithstanding that proxies in respect of such proposed business may have been received by the Corporation.

(B) In addition to any other applicable requirements, for business (other than nominations, which shall be governed by Section 1.10 hereto) to be properly brought before an annual meeting by a stockholder, the stockholder must (i) provide Timely Notice (as defined below) thereof in writing and in proper form to the Secretary of the Corporation and (ii) provide any updates or supplements to such notice at the times and in the forms required by this Section 1.11. To be timely, a stockholder’s notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder to be timely must be so delivered, or mailed and received, not later than the 90th day prior to such annual meeting or, if later, the tenth day following the day on which public disclosure of the date of such annual meeting was first made (such notice within such time periods, “Timely Notice”). In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period (or extend any time period) for the giving of Timely Notice as described above.


(C) To be in proper form for purposes of this Section 1.11, a stockholder’s notice to the Secretary shall set forth:

(i) As to each Proposing Person (as defined below), (A) the name and address of such Proposing Person (including, if applicable, the name and address that appear on the Corporation’s books and records); and (B) the class(es) and series and number of shares of the Corporation that are, directly or indirectly, owned of record and beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by such Proposing Person, except that such Proposing Person shall in all events be deemed to beneficially own any shares of any class or series of the Corporation as to which such Proposing Person has a right to acquire beneficial ownership at any time in the future (the disclosures to be made pursuant to the foregoing clauses (A) and (B) are referred to as “Stockholder Information”);

(ii) As to each Proposing Person, (A) the full notional amount of any securities that, directly or indirectly, underlie any “derivative security” (as such term is defined in Rule 16a-1(c) under the Exchange Act) that constitutes a “call equivalent position” (as such term is defined in Rule 16a-1(b) under the Exchange Act) (“Synthetic Equity Position”) and that is, directly or indirectly, held or maintained by such Proposing Person with respect to any shares of any class(es) or series of shares of the Corporation; provided that, for the purposes of the definition of “Synthetic Equity Position,” the term “derivative security” shall also include any security or instrument that would not otherwise constitute a “derivative security” as a result of any feature that would make any conversion, exercise or similar right or privilege of such security or instrument becoming determinable only at some future date or upon the happening of a future occurrence, in which case the determination of the amount of securities into which such security or instrument would be convertible or exercisable shall be made assuming that such security or instrument is immediately convertible or exercisable at the time of such determination; and, provided, further, that any Proposing Person satisfying the requirements of Rule 13d-1(b)(1) under the Exchange Act (other than a Proposing Person that so satisfies Rule 13d-1(b)(1) under the Exchange Act solely by reason of Rule 13d-1(b)(1)(ii)(E)) shall not be deemed to hold or maintain the notional amount of any securities that underlie a Synthetic Equity Position held by such Proposing Person as a hedge with respect to a bona fide derivatives trade or position of such Proposing Person arising in the ordinary course of such Proposing Person’s business as a derivatives dealer, (B) any rights to dividends on the shares of any class or series of shares of the Corporation owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Corporation, (C) any material pending or threatened legal proceeding in which such Proposing Person is a party or material participant involving the Corporation or any of its officers or directors, or any affiliate of the Corporation, (D) any other material relationship between such Proposing Person, on the one hand, and the Corporation and any affiliate of the Corporation, on the other hand, (E) any direct or indirect material interest in any material contract or agreement of such Proposing Person with the Corporation or any affiliate of the Corporation (including, in any such case, any employment agreement, collective bargaining agreement or consulting agreement), (F) a representation that such stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business, (G) a representation that such Proposing Person intends or is part of a group which intends to deliver a proxy statement or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or otherwise solicit proxies from stockholders in support of such proposal and (H) any other information relating to such Proposing Person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies or consents by such Proposing Person in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act (the disclosures to be made pursuant to the foregoing clauses (A) through (G) are referred to as “Disclosable Interests”); provided, however, that Disclosable Interests shall not include any such disclosures with respect to the ordinary course business activities of any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner; and

(iii) As to each item of business that the stockholder proposes to bring before the annual meeting, (A) a brief description of the business desired to be brought before the annual meeting, the reasons for conducting such business at the annual meeting and any material interest in such business of each Proposing Person, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that


such business includes a proposal to amend these Bylaws, the language of the proposed amendment), and (C) a reasonably detailed description of all agreements, arrangements and understandings (x) between or among any of the Proposing Persons or (y) between or among any Proposing Person and any other record or beneficial holder(s) of shares of capital stock of the Corporation or persons(s) who have a right to acquire beneficial ownership at any time in the future of the shares of any class or series of the Corporation (including their names), in connection with the proposal of such business by such stockholder; and (D) any other information relating to such item of business that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies in support of the business proposed to be brought before the meeting pursuant to Section 14(a) of the Exchange Act; provided, however, that the disclosures required by this paragraph (iii) shall not include any disclosures with respect to any broker, dealer, commercial bank, trust company or other nominee who is a Proposing Person solely as a result of being the stockholder directed to prepare and submit the notice required by these Bylaws on behalf of a beneficial owner.

For purposes of this Section 1.11, the term “Proposing Person” shall mean (i) the stockholder providing the notice of business proposed to be brought before an annual meeting, (ii) the beneficial owner or beneficial owners, if different, on whose behalf the notice of the business proposed to be brought before the annual meeting is made, and (iii) any participant (as defined in paragraphs (a)(ii)-(vi) of Instruction 3 to Item 4 of Schedule 14A) with such stockholder in such solicitation.

(D) A Proposing Person shall update and supplement its notice to the Corporation of its intent to propose business at an annual meeting, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 1.11 shall be true and correct as of the record date for stockholders entitled to vote at the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for stockholders entitled to vote at the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight (8) business days prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof). For the avoidance of doubt, the obligation to update and supplement as set forth in this paragraph or any other Section of these Bylaws shall not limit the Corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any applicable deadlines hereunder or enable or be deemed to permit a stockholder who has previously submitted notice hereunder to amend or update any proposal or to submit any new proposal, including by changing or adding matters, business or resolutions proposed to be brought before a meeting of the stockholders.

(E) Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at an annual meeting that is not properly brought before the meeting in accordance with this Section 1.11. The chairperson of the meeting shall have the power and duty to determine whether any proposed business was brought in accordance with the provisions of this Section 1.11, and if the chairperson should determine that the business was not properly brought before the meeting in accordance with this Section 1.11, the chairperson shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Without limiting the foregoing, in advance of any meeting of stockholders, the Board shall also have the power to determine whether any proposed business was made in accordance with the provisions of this Section 1.11.

(F) This Section 1.11 is expressly intended to apply to any business proposed to be brought before an annual meeting of stockholders other than any proposal made in accordance with Rule 14a-8 under the Exchange Act and included in the Corporation’s proxy statement. In addition to the requirements of this Section 1.11 with respect to any business proposed to be brought before an annual meeting of stockholders, each Proposing Person shall comply with all applicable requirements of the Exchange Act with respect to any such business. Nothing in this Section 1.11 shall be deemed to affect the rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.


1.12 Conduct of Meetings.

(A) Meetings of stockholders shall be presided over by the Chairperson of the Board, or in the Chairperson’s absence by the Lead Independent Director, if any, or in the Lead Independent Director’s absence by the Chief Executive Officer, or in the Chief Executive Officer’s absence, by a chairperson designated by the Board. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence the chairperson of the meeting may appoint any person to act as secretary of the meeting.

(B) The Board may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the Corporation as it shall deem appropriate including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board, the chairperson of any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairperson of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

(C) The chairperson of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.

(D) In advance of any meeting of stockholders, the Board, the Chairperson of the Board or the Chief Executive Officer shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairperson of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and, when the vote is completed, shall certify their determination of the result of the vote taken and of such other facts as may be required by law. Every vote taken by ballots shall be counted by a duly appointed inspector or duly appointed inspectors.

ARTICLE II

DIRECTORS

2.1 General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, who may exercise all of the powers of the Corporation except as otherwise provided by law, the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders. Directors need not be stockholders or residents of the State of Delaware.

2.2 Number, Election and Term. The total number of directors constituting the Board shall be as fixed in, or in the manner provided by, the Certificate of Incorporation. Election of directors need not be by written ballot. The term of office of each director shall be as specified in the Certificate of Incorporation.

2.3 Chairperson of the Board. The Board may appoint from its members a Chairperson of the Board, who does not need to be an employee or officer of the Corporation. If the Board appoints a Chairperson of the Board, such Chairperson shall perform such duties and possess such powers as are assigned by the Board and, if the Chairperson of the Board is also designated as the Corporation’s Chief Executive Officer, shall have the powers and duties of the Chief Executive Officer prescribed in Section 3.7 of these Bylaws. Unless otherwise provided by the Board, the Chairperson of the Board shall preside at all meetings of the Board.


2.4 Terms of Office. Unless otherwise provided by the Certificate of Incorporation and subject to the special rights of holders of any series of Preferred Stock to elect directors, the Board shall be divided into three classes, designated as Class I, Class II and Class III. The number of directors in each class shall be divided as nearly equal as is practicable. Each director shall hold office until the annual meeting at which such director’s term expires and until such director’s successor is elected and qualified or until such director’s earlier death, resignation, retirement, disqualification or removal. The term of each director shall continue until the election and qualification of his or her successor and be subject to his or her earlier death, resignation, disqualification or removal. For the avoidance of doubt, no decrease in the number of directors constituting the Board shall shorten the term of any incumbent director.

2.5 Quorum. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors established by the Board pursuant to Section 2.2 of these Bylaws shall constitute a quorum of the Board. If at any meeting of the Board there shall be less than a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.6 Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number is required by law, the Certificate of Incorporation or these Bylaws.

2.7 Removal. Directors of the Corporation may only be removed in the manner specified by the Certificate of Incorporation.

2.8 Newly Created Directorships; Vacancies. Any newly created directorship or vacancy on the Board, however occurring, shall be filled in accordance with the Certificate of Incorporation and applicable law.

2.9 Resignation. Any director may resign by delivering a resignation in writing or by electronic transmission to the Corporation. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event.

2.10 Regular Meetings. Regular meetings of the Board may be held without notice at such time and place as shall be determined from time to time by the Board; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board may be held without notice immediately after and at the same place as the annual meeting of stockholders.

2.11 Special Meetings. Special meetings of the Board may be called by the Chairperson of the Board, the Chief Executive Officer, the Lead Independent Director, the affirmative vote of a majority of the directors then in office, or by one director in the event that there is only a single director in office.

2.12 Notice of Special Meetings. Notice of the date, place and time of any special meeting of the Board shall be given to each director (a) in person or by telephone at least twenty-four (24) hours in advance of the meeting, (b) by sending written notice by reputable overnight courier, telecopy, facsimile, electronic mail or other means of electronic transmission, or delivering written notice by hand, to such director’s last known business, home or means of electronic transmission address at least twenty-four (24) hours in advance of the meeting, or (c) by sending written notice by first-class mail to such director’s last known business or home address at least seventy-two (72) hours in advance of the meeting. Such notice may be given by the Secretary or by the Chairperson of the Board, the Chief Executive Officer, the Lead Independent Director or one of the directors calling the meeting. A notice or waiver of notice of a meeting of the Board need not specify the purposes of the meeting.

2.13 Meetings by Conference Communications Equipment. Directors may participate in meetings of the Board or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.


2.14 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent to the action in writing or by electronic transmission.

2.15 Committees. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation with such lawfully delegable powers and duties as the Board thereby confers, to serve at the pleasure of the Board. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board and subject to the provisions of law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board may from time to time request. Except as otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

2.16 Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board may from time to time determine. No such payment shall preclude any director from serving the Corporation or any of its parent or subsidiary entities in any other capacity and receiving compensation for such service.

2.17 Lead Independent Director. The Board may, in its discretion, elect a lead independent director from among its members that are Independent Directors (as defined below) (such director, the “Lead Independent Director”). The Lead Independent Director shall preside at all meetings at which the Chairperson of the Board is not present and shall exercise such other powers and duties as may from time to time be assigned to him or her by the Board or as prescribed by these Bylaws. For purposes of these Bylaws, “Independent Director” has the meaning ascribed to such term under the rules of the exchange upon which the Corporation’s Class A Common Stock is primarily traded.

ARTICLE III

OFFICERS

3.1 Titles. The officers of the Corporation may consist of a Chief Executive Officer, a President, a Chief Financial Officer, a Treasurer and a Secretary and such other officers with such other titles as the Board shall from time to time determine. The Board may appoint such other officers, including one or more Vice Presidents and one or more Assistant Treasurers or Assistant Secretaries, as it may deem appropriate from time to time.

3.2 Election. The Chief Executive Officer, President, Treasurer and Secretary shall be elected annually by the Board at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board at such meeting or at any other meeting.

3.3 Qualification. No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4 Tenure. Except as otherwise provided by law, by the Certificate of Incorporation or by these Bylaws, each officer shall hold office until such officer’s successor is duly elected and qualified, unless a different term is specified in the resolution electing or appointing such officer, or until such officer’s earlier death, resignation, disqualification or removal.


3.5 Resignation and Removal. Any officer may resign by delivering a resignation in writing or by electronic transmission to the Corporation. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer may be removed at any time, with or without cause, by the affirmative vote of a majority of the directors then in office. Except as the Board may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following such officer’s resignation or removal, or any right to damages on account of such removal, whether such officer’s compensation be by the month or by the year or otherwise, unless such compensation is expressly provided for in a duly authorized written agreement with the Corporation.

3.6 Vacancies. The Board may fill any vacancy occurring in any office. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is duly elected and qualified, or until such officer’s earlier death, resignation, disqualification or removal.

3.7 President; Chief Executive Officer. Unless the Board has designated another person as the Corporation’s Chief Executive Officer, the President shall be the Chief Executive Officer of the Corporation. The Chief Executive Officer shall have general charge and supervision of the business of the Corporation subject to the direction of the Board, and shall perform all duties and have all powers that are commonly incident to the office of chief executive or that are delegated to such officer by the Board. The President shall perform such other duties and shall have such other powers as the Board or the Chief Executive Officer (if the President is not the Chief Executive Officer) may from time to time prescribe. In the event of the absence, inability or refusal to act of the Chief Executive Officer or the President (if the President is not the Chief Executive Officer), the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board) shall perform the duties of the Chief Executive Officer and when so performing such duties shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer.

3.8 Vice Presidents. Each Vice President shall perform such duties and possess such powers as the Board or the Chief Executive Officer may from time to time prescribe. The Board may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board.

3.9 Secretary and Assistant Secretaries. The Secretary shall perform such duties and shall have such powers as the Board or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board, to attend all meetings of stockholders and the Board and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.

Any Assistant Secretary shall perform such duties and possess such powers as the Board, the Chief Executive Officer or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board) shall perform the duties and exercise the powers of the Secretary.

In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the chairperson of the meeting shall designate a temporary secretary to keep a record of the meeting.

3.10 Treasurer and Assistant Treasurers. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned by the Board or the Chief Executive Officer. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the Corporation, to deposit funds of the Corporation in depositories selected in accordance with these Bylaws, to disburse such funds as ordered by the Board, to make proper accounts of such funds, and to render as required by the Board statements of all such transactions and of the financial condition of the Corporation.

The Assistant Treasurers shall perform such duties and possess such powers as the Board, the Chief Executive Officer or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board) shall perform the duties and exercise the powers of the Treasurer.

3.11 Salaries. Officers of the Corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board.


3.12 Delegation of Authority. Subject to these Bylaws and any contrary action by the Board, each officer of the Corporation shall have, in addition to the duties and powers specifically set forth in these Bylaws, such duties and powers as are customarily incident to his or her office, and such duties and powers as may be designated from time to time by the Board. In addition, the Board may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

ARTICLE IV

CAPITAL STOCK

4.1 Stock Certificates; Uncertificated Shares. The shares of the Corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of the Corporation’s stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock of the Corporation represented by certificates shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board, representing the number of shares held by such holder registered in certificate form. Each such certificate shall be signed in a manner that complies with Section 158 of the DGCL, and each officer appointed pursuant to Article III shall be an authorized officer for this purpose.

Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these Bylaws, applicable securities laws or any agreement among any number of stockholders or among such holders and the Corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.

If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of each certificate representing shares of such class or series of stock, provided that in lieu of the foregoing requirements there may be set forth on the face or back of each certificate representing shares of such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Within a reasonable time after the issuance or transfer of uncertificated shares, the registered owner thereof shall be given a notice, in writing or by electronic transmission, containing the information required to be set forth or stated on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the DGCL or, with respect to Section 151 of the DGCL, a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

4.2 Transfers. Shares of stock of the Corporation shall be transferable in the manner prescribed by law, the Certificate of Incorporation and in these Bylaws. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation or by transfer agents designated to transfer shares of stock of the Corporation. Subject to applicable law, shares of stock represented by certificates shall be transferred only on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the Corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these Bylaws, the Corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the Corporation in accordance with the requirements of these Bylaws.


4.3 Lost, Stolen or Destroyed Certificates. The Corporation may issue a new certificate or uncertificated shares in place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon such terms and conditions as the Board may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity and posting of such bond sufficient to indemnify the Corporation against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

4.4 Record Date. The Board may fix in advance a date as a record date for the determination of the stockholders entitled to notice of any meeting of stockholders, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not precede the date on which the resolution fixing the record date is adopted, and such record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action to which such record date relates. If the Board so fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination.

If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. If no record date is fixed, the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating to such purpose.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

4.5 Regulations. The issue, conversion and registration of shares of stock of the Corporation shall be governed by such other regulations as the Board may establish.

4.6 Lock-Up.

(A) Subject to Section 4.6(B), the Locked-up Holders may not Transfer any Lock-up Shares until the end of the Lock-up Period. The Lock-up Shares shall carry appropriate legends indicating the restrictions on Transfer imposed by this Section 4.6, including as required by Section 151(f) of the DGCL in respect to uncertificated stock.

(B) Notwithstanding the provisions set forth in Section 4.6(A), the Locked-up Holders or their respective Permitted Transferees may Transfer the Lock-up Shares during the Lock-up Period (a) in the case of an individual, (i) by gift to an immediate family member, a charitable organization or a trust or other entity formed for estate planning purposes for the benefit of an immediate family member, (ii) by will, intestacy or by virtue of laws of descent and distribution upon the death of such individual, or (iii) pursuant to a qualified domestic relations order, (b) in the case of a corporation, limited liability company, partnership, trust or other entity, to any stockholder, member, partner or trust beneficiary as part of a distribution, or to any corporation, partnership or other entity that is an affiliate (as defined in Rule 405 of the Securities Act of 1933, as amended) of the Locked-up Holder, (c) in the event of a liquidation, merger, stock exchange or other similar transaction which results in all of the Corporation’s stockholders having the right to exchange their shares of capital stock of the Corporation for cash, securities or other property, or (d) to the Corporation in connection with the “net” or “cashless” exercise of options or other rights to purchase shares of capital stock of the Corporation held by such Locked-up Holder in satisfaction of any tax withholding or exercise price obligations through cashless surrender or otherwise; provided, however, that, in the case of clauses (a) and (b), such transferees shall enter into a written agreement with the Corporation agreeing to be bound by the transfer restrictions set forth herein; and provided further with respect to clauses (a) and (b), that any such transfer shall not involve a disposition for value.


(C) For purposes of this Section 4.6:

(i) the term “immediate family” means any relationship by blood, marriage, or domestic relationship;

(ii) the term “Lock-up Period” means the period beginning on the closing date of the DSAC Transaction and ending on the date that is six (6) months (except to the extent a longer period is approved by the Board or provided for in a Voting and Support Agreement or any other agreement that is approved by the Board and is binding upon the Corporation) after the closing date of the DSAC Transaction;

(iii) the term “Lock-up Shares” means the shares of capital stock (including, for avoidance of doubt, any shares underlying any options, warrants, convertible securities or any other equity-linked instrument) of the Corporation received by the stockholders of the Corporation after the date of the adoption of these Bylaws as consideration in the DSAC Transaction; provided, that, for clarity, shares of capital stock of the Corporation issued in connection with the Domestication (as defined in the Merger Agreement) shall not constitute Lock-up Shares;

(iv) the term “Locked-up Holders” means the holders of Lock-up Shares;

(v) the term “Merger Agreement” means that certain Agreement and Plan of Merger dated November 7, 2021, by and among the Corporation, Grassroots Merger Sub, Inc., a Delaware corporation, and FiscalNote Holdings, Inc., a Delaware corporation, as amended from time to time.

(vi) the term “Transfer” means the (a) sale or assignment of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b);

(vii) the term “Voting and Support Agreement” has the meaning set forth in the Merger Agreement; and

(viii) the term “DSAC Transaction” means the merger of Grassroots Merger Sub, Inc., a Delaware corporation, with and into FiscalNote Holdings, Inc., a Delaware corporation, with FiscalNote Holdings, Inc. surviving, pursuant to and as contemplated by the Merger Agreement.

ARTICLE V

GENERAL PROVISIONS

5.1 Fiscal Year. Except as from time to time otherwise designated by the Board, the fiscal year of the Corporation shall begin on the first day of January of each year and end on the last day of December in each year.

5.2 Corporate Seal. The corporate seal, if any, shall be in such form as shall be approved by the Board.

5.3 Waiver of Notice. Whenever notice is required to be given by law, by the Certificate of Incorporation or by these Bylaws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at or after the time of the event for which notice is to be given, shall be deemed equivalent to notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in any such waiver. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

5.4 Voting of Securities. Except as the Board may otherwise designate, the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer may waive notice, vote, consent, or appoint any person or persons to waive notice, vote or consent, on behalf of the Corporation, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for the Corporation (with or without power of substitution and re-substitution), with respect to the securities of any other entity which may be held by the Corporation.


5.5 Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the Corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

5.6 Certificate of Incorporation. All references in these Bylaws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the Corporation, as amended and/or restated and in effect from time to time, including any certificate of designation relating to any outstanding series of preferred stock.

5.7 Severability. Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.

5.8 Pronouns. All pronouns used in these Bylaws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

5.9 Electronic Transmission. For purposes of these Bylaws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

ARTICLE VI

AMENDMENTS

These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the Board or by the stockholders as expressly provided in the Certificate of Incorporation.

ARTICLE VII

INDEMNIFICATION AND ADVANCEMENT

7.1 Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation. Subject to Section 7.3, the Corporation shall indemnify, defend and hold harmless any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, investigation, arbitration or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that such person is or was a director or officer of the Corporation, or, while a director or officer of the Corporation or any of its subsidiaries, is or was serving at the request of the Corporation or any of its subsidiaries as a director, officer, employee or agent of another corporation, partnership, joint venture or trust (an “Indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes, and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay as incurred the expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.


7.2 Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation. Subject to Section 7.3, the Corporation shall indemnify, defend and hold harmless any person who was or is a party or is threatened to be made a party to or is otherwise involved in a proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is an Indemnitee against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery in the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity by the Corporation for such expenses which the Court of Chancery in the State of Delaware or such other court shall deem proper.

7.3 Authorization of Indemnification. Any indemnification under this Article VII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 7.1 or Section 7.2, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding set forth in Section 7.1 or Section 7.2 or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.

7.4 Good Faith Defined. For purposes of any determination under Section 7.3, a person shall, to the fullest extent permitted by law, be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s conduct was unlawful, if such person’s action is based on good faith reliance on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The term “another enterprise” as used in this Section 7.4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. The provisions of this Section 7.4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Sections 7.1 or 7.2, as the case may be.

7.5 Right of Indemnitee to Bring Suit. Notwithstanding any contrary determination in the specific case under Section 7.3, and notwithstanding the absence of any determination thereunder, if (i) following the final disposition of the applicable proceeding, a claim for indemnification under Sections 7.1 or 7.2 of this Article VII is not paid in full by the Corporation within ninety (90) days after the later of a written claim for indemnification has been received by the Corporation, or (ii) a claim for advancement of expenses under Section 7.6 of this Article VII is not paid in full by the Corporation within thirty (30) days after the Corporation has received a statement or statements requesting such amounts to be advanced, the claimant may at any time thereafter (but not before) bring suit against the Corporation in the Court of Chancery in the State of Delaware to recover the unpaid amount of the claim, together with interest thereon, or to obtain advancement of expenses, as applicable. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Indemnitee shall also be entitled to be paid the expense of prosecuting or defending such suit. In (a) any suit brought by the Indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an


advancement of expenses) it shall be a defense that, and (b) in any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that, the Indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the Indemnitee, shall be a defense to such suit. In any suit brought by the Indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article VII or otherwise shall be on the Corporation.

7.6 Expenses Payable in Advance. Expenses, including without limitation attorneys’ fees, incurred by a current or former director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding to which such person is a party or is threatened to be made a party or otherwise involved as a witness or otherwise by reason of the fact that such person is or was a director or officer of the Corporation, or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such current or former director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VII or otherwise.

7.7 Nonexclusivity of Indemnification and Advancement of Expenses. The rights to indemnification and advancement of expenses provided by or granted pursuant to this Article VII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that, subject to Section 7.11, indemnification of the persons specified in Sections 7.1 and 7.2 shall be made to the fullest extent permitted by law. The provisions of this Article VII shall not be deemed to preclude the indemnification of any person who is not specified in Sections 7.1 or 7.2 but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.

7.8 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VII.

7.9 Certain Definitions. For purposes of this Article VII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents so that any person who is or was a director or officer of such constituent corporation, or, while a director or officer of such constituent corporation, is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Article VII, references to “fines” shall include any excise taxes assessed on a person with respect of any employee benefit plan; and references to “serving at the request of the Corporation” shall include any


service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VII.

7.10 Survival of Indemnification and Advancement of Expenses. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

7.11 Limitation on Indemnification. Notwithstanding anything contained in this Article VII to the contrary, except for proceedings to enforce rights to indemnification or advancement of expenses (which shall be governed by Section 7.5), the Corporation shall not be obligated to indemnify any current or former director or officer in connection with an action, suit proceeding (or part thereof) initiated by such person unless such action, suit or proceeding (or part thereof) was authorized by the Board.

7.12 Contract Rights. The obligations of the Corporation under this Article VII to indemnify, and advance expenses to, a person who is or was a director or officer of the Corporation shall be considered a contract between the Corporation and such person, and no modification or repeal of any provision of this Article VII shall affect, to the detriment of such person, such obligations of the Corporation in connection with a claim based on any act or failure to act occurring before such modification or repeal.

Exhibit 10.5

Annex F

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of July 29, 2022, is made and entered into by and among FiscalNote Holdings, Inc., a Delaware corporation domesticated from Duddell Street Acquisition Corp., a Cayman Islands exempted company (the “Company”), Duddell Street Holdings Limited, a Cayman Islands limited liability company (“Sponsor”), and the undersigned parties listed as an Existing Holder on the signature pages hereto (each such party, together with Sponsor and any other person deemed an “Existing Holder” who hereafter becomes a party to this Agreement pursuant to Section 5.02 hereof, an “Existing Holder” and collectively, the “Existing Holders”), and the undersigned parties listed as a New Holder on the signature pages hereto (each such party, together with any other person deemed a “New Holder” who hereafter becomes a party to this Agreement pursuant to Section 5.02 hereof, a “New Holder” and collectively, the “New Holders”). Capitalized terms used but not otherwise defined in this Agreement shall have the meaning ascribed to such terms in the Merger Agreement (as defined below).

RECITALS

WHEREAS, the Company, Sponsor and the Existing Holders entered into that certain Registration Rights Agreement, dated as of November 2, 2020 (the “Existing Registration Rights Agreement”), pursuant to which the Company granted to the Existing Holders certain registration rights with respect to certain securities of the Company;

WHEREAS, the Company has entered into that certain Agreement and Plan of Merger, dated as of November 7, 2021 (as may be amended from time to time, the “Merger Agreement”), with Grassroots Merger Sub, Inc., a Delaware corporation (“Merger Sub”), and FiscalNote Holdings, Inc., a Delaware corporation (“FiscalNote”), pursuant to which Merger Sub will merge with and into FiscalNote with FiscalNote surviving as a wholly-owned subsidiary of the Company;

WHEREAS, upon the closing of the transactions contemplated by the Merger Agreement and subject to the terms and conditions set forth therein, the Existing Holders and the New Holders will hold shares of Class A common stock, par value $0.0001 per share, of the Company (“Common Stock”) and Class B common stock, par value $0.0001 per share, of the Company convertible into Common Stock, in each case, in such amounts and subject to such terms and conditions as set forth in the Merger Agreement;

WHEREAS, pursuant to Section 5.5 of the Existing Registration Rights Agreement, the provisions, covenants and conditions set forth in the Existing Registration Rights Agreement may be amended or modified upon the written consent of the Company and the holders of a majority-in-interest of the “Registrable Securities” (as such term was defined in the Existing Registration Rights Agreement) at the time in question; and

WHEREAS, in connection with the transactions contemplated by the Merger Agreement, the Company and the Existing Holders desire to amend and restate the Existing Registration Rights Agreement in its entirety and enter into this Agreement, pursuant to which the Company shall grant the Existing Holders and the New Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

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Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any Misstatement, (ii) would not be required to be made at such time if the Registration Statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.

Agreement” shall have the meaning given in the Preamble.

Bought Deal” shall mean an Underwritten Shelf Takedown in which Underwriter(s) agree to purchase Registrable Securities at an agreed price without a prior marketing process.

Commission” shall mean the Securities and Exchange Commission.

Common Stock” shall have the meaning given in the Recitals hereto.

Company” shall have the meaning given in the Preamble and includes the Company’s successors by recapitalization, merger, consolidation, spin-off, reorganization or similar transaction.

Demanding Holder” shall have the meaning given in Section 2.01(c).

Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

Existing Holder” or “Existing Holders” shall have the meaning given in the Preamble.

Filing Date” shall have the meaning given in Section 2.01(a).

Form S-1 Shelf” shall have the meaning given in Section 2.01(a).

Form S-3 Shelf” shall have the meaning given in Section 2.01(a).

Holder” or “Holders” shall mean the Existing Holders and the New Holders and any person who hereafter becomes a party of this Agreement pursuant to Section 5.02.

Lock-up Period” shall mean (a) with respect to the Existing Holders, the Lock-up Period as defined in that certain Sponsor Letter Agreement, dated as of November 7, 2021, by and among the Company, the Sponsor and the other Existing Holders, and (b) with respect to each New Holder, the Lock-up Period as defined in that certain Voting and Support Agreement dated as of November 7, 2021, by and among the Company and such New Holder or the Lock-up Agreement dated as of or prior to the date hereof by and among the Company and such New Holder, as applicable.

Maximum Number of Securities” shall have the meaning given in Section 2.01(d).

Minimum Takedown Threshold” shall have the meaning given in Section 2.01(c).

Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the light of the circumstances under which they were made, in the case of the Prospectus) not misleading.

New Holder” or “New Holders” shall have the meaning given in the Preamble.

Permitted Transferees” shall mean any person or entity (i) to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities prior to the expiration of the applicable Lock-up Period under the applicable agreement between such Holder and the Company, and to any transferee thereafter and (ii) who agrees to become bound by the transfer restrictions set forth in this Agreement.

 

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Piggyback Registration” shall have the meaning given in Section 2.02(a).

Private Placement Warrants” shall mean the private placement warrants issued pursuant to the Sponsor Warrants Purchase Agreement, dated as of October 28, 2020, between the Company and Sponsor, and that certain Warrant Agreement, dated October 28, 2020, between the Company and Continental Stock Transfer & Trust Company, as warrant agent.

Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

Registrable Security” shall mean (a) the Private Placement Warrants (including any shares of Common Stock issued or issuable upon the exercise of any such Private Placement Warrants), (b) any issued and outstanding shares of Common Stock or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by an Existing Holder as of the date of this Agreement, (c) any issued and outstanding shares of Common Stock or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any such other equity security) of the Company held by a New Holder (including shares transferred to a Permitted Transferee) (i) as of the date of this Agreement or (ii) that are otherwise issued in connection with the transactions contemplated by the Merger Agreement, and (d) any other equity security of the Company issued or issuable with respect to any such share of Common Stock described in the foregoing clauses (a) through (c) by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation, spin-off, exchange, reorganization or other similar event; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities upon the earliest to occur of: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred, new certificates or book-entry positions for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; or (D) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.

Registration” shall mean a registration, including any related Shelf Takedown, effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

  (a)

all registration, listing and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Common Stock is then listed;

 

  (b)

fees and expenses of compliance with securities or blue sky laws (including reasonable and customary fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

  (c)

printing, messenger, telephone and delivery expenses;

 

  (d)

reasonable fees and disbursements of counsel for the Company;

 

  (e)

reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and

 

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  (f)

reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders in an Underwritten Offering.

Registration Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

Requesting Holders” shall have the meaning given in Section 2.01(d).

Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

Shelf” shall mean the Form S-1 Shelf, the Form S-3 Shelf or any Subsequent Shelf Registration, as the case may be.

Shelf Registration” shall mean a registration of securities pursuant to a registration statement filed with the Commission in accordance with and pursuant to Rule 415 promulgated under the Securities Act (or any successor rule then in effect).

Shelf Takedown” shall mean an Underwritten Shelf Takedown or any proposed transfer or sale using a Registration Statement, including a Piggyback Registration.

Sponsor” shall have the meaning given in the Preamble hereto.

Subsequent Shelf Registration” shall have the meaning given in Section 2.01(b).

Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.

Underwritten Shelf Takedown” shall have the meaning given in Section 2.01(c).

ARTICLE II

REGISTRATIONS

Section 2.01 Shelf Registration.

(a) Filing. As soon as practicable but no later than thirty (30) calendar days following the closing of the transactions contemplated by the Merger Agreement (the “Filing Date”), the Company shall file a Registration Statement for a Shelf Registration on Form S-3 (the “Form S-3 Shelf”) or, if the Company is ineligible to use a Form S-3 Shelf, a Registration Statement for a Shelf Registration on Form S-1 (the “Form S-1 Shelf”), in each case, covering the resale of all the Registrable Securities (determined as of two (2) business days prior to such filing) on a delayed or continuous basis and shall use its commercially reasonable efforts to have such Shelf declared effective as soon as practicable after the filing thereof and no later than the earlier of (x) the ninetieth (90th) calendar day following the Filing Date if the Commission notifies the Company that it will “review” the Shelf and (y) the tenth (10th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Shelf will not be “reviewed” or will not be subject to further review. Such Shelf shall provide for the resale of the Registrable Securities included therein pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. The Company shall maintain a Shelf in accordance with the terms hereof, and shall prepare and file with the Commission such amendments, including post-effective amendments, and supplements as may be necessary to keep a Shelf continuously effective, available for use to permit all Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. In the event the Company files a Form S-1 Shelf, the Company shall use its commercially reasonable efforts to convert the Form S-1 Shelf (and any Subsequent Shelf Registration) to a Form S-3 Shelf as soon as practicable after the Company is eligible to use a Form S-3 Shelf.

 

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(b) Subsequent Shelf Registration. If any Shelf ceases to be effective under the Securities Act for any reason at any time while Registrable Securities are still outstanding, the Company shall, subject to Section 3.04, use its commercially reasonable efforts to as promptly as is reasonably practicable cause such Shelf to again become effective under the Securities Act (including using its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness of such Shelf), and shall use its commercially reasonable efforts to as promptly as is reasonably practicable amend such Shelf in a manner reasonably expected to result in the withdrawal of any order suspending the effectiveness of such Shelf or file an additional registration statement as a Shelf Registration (a “Subsequent Shelf Registration”) registering the resale of all Registrable Securities (determined as of two (2) business days prior to such filing), and pursuant to any method or combination of methods legally available to, and requested by, any Holder named therein. If a Subsequent Shelf Registration is filed, the Company shall use its commercially reasonable efforts to (i) cause such Subsequent Shelf Registration to become effective under the Securities Act as promptly as is reasonably practicable after the filing thereof (it being agreed that the Subsequent Shelf Registration shall be an automatic shelf registration statement (as defined in Rule 405 promulgated under the Securities Act) if the Company is a well-known seasoned issuer (as defined in Rule 405 promulgated under the Securities Act) at the most recent applicable eligibility determination date) and (ii) keep such Subsequent Shelf Registration continuously effective, available for use to permit all Holders named therein to sell their Registrable Securities included therein and in compliance with the provisions of the Securities Act until such time as there are no longer any Registrable Securities. Any such Subsequent Shelf Registration shall be on Form S-3 to the extent that the Company is eligible to use such form. Otherwise, such Subsequent Shelf Registration shall be on another appropriate form.

(c) Requests for Underwritten Shelf Takedowns. Subject to Section 3.04, at any time and from time to time when an effective Shelf is on file with the Commission, Sponsor, any other Existing Holder and any New Holder (any such Holder being in such case a “Demanding Holder”) may request to sell all or any portion of its Registrable Securities in an Underwritten Offering that is registered pursuant to the Shelf (each, an “Underwritten Shelf Takedown”); provided that the Company shall only be obligated to effect an Underwritten Shelf Takedown if such offering shall include Registrable Securities proposed to be sold by the Demanding Holder, either individually or together with other Demanding Holders, with a total offering price reasonably expected to exceed, in the aggregate, $20 million (the “Minimum Takedown Threshold”). Notwithstanding any other provision of this Article II, at any time and from time to time when an effective Shelf is on file with the Commission, if a Demanding Holder wishes to engage in a Bought Deal (i) with a total offering price reasonably expected to satisfy the Minimum Takedown Threshold or (ii) that would constitute a sale of all remaining Registrable Securities held by such Demanding Holder, provided that such Registrable Securities cannot be sold in a single transaction under the volume limitations of Rule 144, then such Demanding Holder need only make a demand of the Company for such Bought Deal at least five (5) business days (or ten (10) business days if such Bought Deal is the first Underwritten Shelf Takedown to occur after the date of this Agreement) prior to the day such offering is to commence and the Company shall as expeditiously as possible use commercially reasonable efforts to facilitate such Bought Deal; provided that the Demanding Holder shall use commercially reasonable efforts to work with the Company and any Underwriters, auditors, legal counsel and other advisors prior to making such request in order to facilitate preparation of the registration statement, prospectus, prospectus supplement and other offering documentation related to the Bought Deal. All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company, which shall specify the approximate number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown. The initial Demanding Holder shall have the right to select the Underwriters for such offering (which shall consist of one or more reputable nationally recognized investment banks), subject to the Company’s prior approval (which shall not be unreasonably withheld, conditioned or delayed). Sponsor, any other Existing Holder and any New Holder may each demand not more than one (1) Underwritten Shelf Takedown pursuant to this Section 2.01(c) in any twelve (12) month period. Notwithstanding anything to the contrary in this Agreement, the Company may effect any Underwritten Offering pursuant to any then effective Registration Statement, including a Form S-3, that is then available for such offering.

 

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(d) Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Shelf Takedown, in good faith, advise the Company, the Demanding Holders and the Holders requesting piggyback rights pursuant to this Agreement with respect to such Underwritten Shelf Takedown (the “Requesting Holders”) (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other shares of Common Stock or other equity securities that the Company desires to sell and all other shares of Common Stock or other equity securities, if any, that have been requested to be sold in such Underwritten Offering pursuant to separate written contractual piggyback registration rights held by any other stockholders, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, before including any shares of Common Stock or other equity securities proposed to be sold by Company or by other holders of Common Stock or other equity securities, (i) first, the Registrable Securities of the Demanding Holders (pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Shelf Takedown and the aggregate number of Registrable Securities that the Demanding Holders have requested be included in such Underwritten Shelf Takedown), and (ii) second, the Registrable Securities of the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Requesting Holder (if any) has requested be included in such Underwritten Shelf Takedown and the aggregate number of Registrable Securities that the Requesting Holders have requested be included in such Underwritten Shelf Takedown) that can be sold without exceeding the Maximum Number of Securities.

(e) Withdrawal. Prior to the filing of the applicable “red herring” prospectus or prospectus supplement used for marketing such Underwritten Shelf Takedown, any Demanding Holder initiating an Underwritten Shelf Takedown shall have the right to withdraw from such Underwritten Shelf Takedown for any or no reason whatsoever upon written notification (a “Withdrawal Notice”) to the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Underwritten Shelf Takedown; provided that Sponsor or any other Demanding Holder may elect to have the Company continue an Underwritten Shelf Takedown if the Minimum Takedown Threshold would still be satisfied by the Registrable Securities proposed to be sold in the Underwritten Shelf Takedown by Sponsor or such other Demanding Holder, as applicable. If withdrawn, a demand for an Underwritten Shelf Takedown shall constitute a demand for an Underwritten Shelf Takedown by the withdrawing Demanding Holder for purposes of Section 2.01(c), unless either (a) such Demanding Holder has not previously withdrawn any Underwritten Shelf Takedown or (b) such Demanding Holder reimburses the Company for all Registration Expenses with respect to such Underwritten Shelf Takedown (or, if there is more than one Demanding Holder, a pro rata portion of such Registration Expenses based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Shelf Takedown); provided that, if Sponsor or any New Holder elects to continue an Underwritten Shelf Takedown pursuant to the proviso in the immediately preceding sentence, such Underwritten Shelf Takedown shall instead count as an Underwritten Shelf Takedown demanded by Sponsor or any New Holder, as applicable, for purposes of Section 2.01(c). Following the receipt of any Withdrawal Notice, the Company shall promptly forward such Withdrawal Notice to any other Holders that had elected to participate in such Shelf Takedown. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Shelf Takedown prior to its withdrawal under this Section 2.01(e), other than if a Demanding Holder elects to pay such Registration Expenses pursuant to clause (ii) of the second sentence of this Section 2.01(e).

Section 2.02 Piggyback Registration.

(a) Piggyback Rights. If the Company proposes to file a Registration Statement under the Securities Act with respect to the Registration of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.01 hereof), other than a Registration Statement (or any registered offering with respect thereto) (i) filed in connection with any employee stock option or other benefit plan, (ii) pursuant to a Registration Statement on Form S-4 (or similar form that relates to a transaction subject to Rule 145 under the Securities Act or any successor rule thereto), (iii) for an offering of debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement or, in the case of an Underwritten Offering pursuant to a Shelf Registration, the applicable

 

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“red herring” prospectus or prospectus supplement used for marketing such offering, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such Registration a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this Section 2.02(a) to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this Section 2.02(a) shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.

(b) Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of shares of Common Stock or other equity securities that the Company desires to sell, taken together with (i) the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant to Section 2.02 hereof, and (iii) the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual piggyback registration rights of persons or entities other than the Holders of Registrable Securities hereunder, exceeds the Maximum Number of Securities, then:

(i) If the Registration or registered offering is undertaken for the Company’s account, the Company shall include in any such Registration or registered offering (A) first, the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.02(a), pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual piggyback registration rights of persons or entities other than the Holders of Registrable Securities hereunder, which can be sold without exceeding the Maximum Number of Securities;

(ii) If the Registration or registered offering is pursuant to a demand by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration or registered offering (A) first, the shares of Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to Section 2.02(a), pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Offering, which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A) and (B), the shares of Common Stock or other equity securities, if any, as to which Registration or a registered offering has been requested pursuant to separate written contractual piggyback registration rights of persons or entities other than the Holders of Registrable Securities

 

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hereunder, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the shares of Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and

(iii) If the Registration or registered offering and Underwritten Shelf Takedown is pursuant to a request by Holder(s) of Registrable Securities pursuant to Section 2.01(c) hereof, then the Company shall include in any such Registration or registered offering securities in the priority set forth in Section 2.01(d).

(c) Piggyback Registration Withdrawal. Any Holder of Registrable Securities (other than a Demanding Holder, whose right to withdraw from an Underwritten Shelf Takedown, and related obligations, shall be governed by Section 2.01(e)) shall have the right to withdraw from a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with the Commission with respect to such Piggyback Registration or, in the case of a Piggyback Registration pursuant to a Shelf Registration, the filing of the applicable “red herring” prospectus or prospectus supplement with respect to such Piggyback Registration used for marketing such transaction. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration (which, in no circumstance, shall include a Shelf) at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement (other than Section 2.01(f)), the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this Section 2.02(c).

(d) Unlimited Piggyback Registration Rights. For purposes of clarity, any Piggyback Registration effected pursuant to Section 2.02 hereof shall not be counted as a demand for an Underwritten Shelf Takedown under Section 2.01(e) hereof.

Section 2.03 Market Stand-off. In connection with any Underwritten Offering of Common Stock of the Company, if requested by the Underwriters managing the offering, each Holder that (i) is an executive officer or director of the Company or (ii) is a beneficial owner of more than five percent (5%) of the outstanding shares of Common Stock of the Company, agrees not to, and to execute a customary lock-up agreement (in each case on substantially the same terms and conditions as all such Holders, including customary waiver “MFN” provisions) in favor of the managing Underwriters to not, sell or dispose of any shares of Common Stock of the Company (other than those included in such offering pursuant to this Agreement), without the prior written consent of the managing Underwriters, during the ninety (90)-day period (or such shorter time agreed to by the managing Underwriters with respect to the officers and directors of the Company) beginning on the date of pricing of such offering, except as expressly permitted by such lock-up agreement or in the event the managing Underwriters otherwise agree by written consent.

ARTICLE III

COMPANY PROCEDURES

Section 3.01 General Procedures. In connection with any Shelf and/or Shelf Takedown, the Company shall use its reasonable best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible:

(a) prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective, or file a Subsequent Shelf Registration until all Registrable Securities covered by such Registration Statement have ceased to be Registrable Securities;

 

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(b) prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by a majority-in interest of the Holders of of the Registrable Securities registered on such Registration Statement or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;

(c) prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriter(s), if any, and the Holders of Registrable Securities included in such Registration, and such Holders’ legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriter(s) and the Holders of Registrable Securities included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;

(d) prior to any public offering of Registrable Securities, use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request (or provide evidence satisfactory to such Holders that the Registrable Securities are exempt from such registration or qualification) and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

(e) cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;

(f) provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

(g) advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

(h) at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus (or such shorter period of time as may be necessary in order to comply with the Securities Act, the Exchange Act, and the rules and regulations promulgated under the Securities Act or Exchange Act, as applicable), furnish a copy thereof to each seller of such Registrable Securities or its counsel (excluding any exhibits thereto and any filing made under the Exchange Act that is to be incorporated by reference thereto);

(i) notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.04 hereof;

(j) permit a representative of the Holders, the Underwriter(s), if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information; provided further, that notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter if such Underwriter has not then been named with respect to the applicable Underwritten Offering;

 

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(k) obtain a “comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Offering in customary form and covering such matters of the type customarily covered by “comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest of the participating Holders;

(l) on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion and negative assurance letter, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the participating Holders and the Underwriter(s), if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the participating Holders or Underwriter(s) may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to a majority-in-interest of the participating Holders;

(m) in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting or other purchase or sales agreement, in usual and customary form, with the managing Underwriter of such offering or sale;

(n) cooperate with each Holder covered by the Registration Statement and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

(o) make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission); provided that such obligation may be satisfied by the Company’s timely filings on the Commission’s EDGAR system;

(p) with respect to an Underwritten Offering pursuant to Section 2.01(c), use its reasonable best efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter(s) in any Underwritten Offering;

(q) otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the participating Holders in connection with such Registration and comply with all applicable rules and regulations of the Securities and Exchange Commission;

(r) upon request of a Holder, the Company shall (i) authorize the Company’s transfer agent to remove any legend on share certificates of such Holder’s Common Stock restricting further transfer (or any similar restriction in book entry positions of such Holder) if such restrictions are no longer required by the Securities Act or any applicable state securities laws or any agreement with the Company to which such Holder is a party, including if such shares subject to such a restriction have been sold on a Registration Statement, (ii) request the Company’s transfer agent to issue in lieu thereof shares of Common Stock without such restrictions to the Holder upon, as applicable, surrender of any stock certificates evidencing such shares of Common Stock, or to update the applicable book entry position of such Holder so that it no longer is subject to such a restriction, and (iii) use reasonable best efforts to cooperate with such Holder to have such Holder’s shares of Common Stock transferred into a book-entry position at The Depository Trust Company, in each case, subject to delivery of customary documentation, including any documentation required by such restrictive legend or book-entry notation.

Notwithstanding the foregoing, the Company shall not be required to provide any documents or information to an Underwriter if such Underwriter has not then been named with respect to the applicable Underwritten Offering.

 

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Section 3.02 Registration Expenses. Except as otherwise provided herein, the Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that each Holder shall bear, with respect to such Holder’s Registrable Securities being sold, all Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable and documented fees and expenses of any legal counsel representing such Holders.

Section 3.03 Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (a) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by the Company and (b) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements. Notwithstanding anything in this Agreement to the contrary, if any Holder does not provide to the Company in writing information and affidavits as the Company reasonably requests for use in connection with any Registration Statement or Prospectus, the Company may exclude such Holder’s Registrable Securities from the applicable Registration Statement or Prospectus if the Company determines, based on the advice of counsel, that such information is necessary to effect the registration and such Holder continues thereafter to withhold such information. For the avoidance of doubt, the exclusion of a Holder’s Registrable Securities as a result of this Section 3.03 shall not affect the registration of the other Registrable Securities to be included in such Registration.

Section 3.04 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until he, she or it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until he, she or it is advised in writing by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time, but in no event (i) on more than three (3) occasions, for more than sixty (60) consecutive calendar days, or (ii) more than ninety (90) days in any twelve (12) month period, in each case as determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.04.

Section 3.05 Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions.

ARTICLE IV

INDEMNIFICATION AND CONTRIBUTION

Section 4.01 Indemnification.

(a) The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors and agents and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and out-of-pocket expenses (including, without limitation, reasonable attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained or

 

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incorporated by reference in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.

(b) In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish (or cause to be furnished) to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors, officers and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and out-of-pocket expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue or alleged untrue statement or omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company. For the avoidance of doubt, the obligation to indemnify under this Section 4.01(b) shall be several, not joint and several, among the Holders of Registrable Securities, and the total indemnification liability of a Holder under this Section 4.01(b) shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement.

(c) Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

(d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities.

(e) If the indemnification provided under Section 4.01 hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material

 

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fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action and the benefits received by the such indemnifying party or indemnified party; provided, however, that the liability of any Holder under this Section 4.01(e) shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 4.01(a), 4.01(b) and 4.01(c) above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.01(e) were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 4.01(e). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 4.01(e) from any person who was not guilty of such fraudulent misrepresentation.

ARTICLE V

MISCELLANEOUS

Section 5.01 Notices. Any notice or communication under this Agreement must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service providing evidence of delivery, or (c) transmission by hand delivery, electronic mail or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail or facsimile, at such time as it is delivered to the addressee (except in the case of electronic mail, with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: FiscalNote Holdings, Inc., 1201 Pennsylvania Avenue NW, Washington D.C. 20004, Attention: Josh Resnik, President, General Counsel and Chief Operating Officer, email: josh.resnik@fiscalnote.com with a copy to Paul Hastings LLP, 2050 M Street NW, Washington D.C. 20036, Attention: Brandon Bortner, email: brandonbortner@paulhastings.com and, if to any Holder, at such Holder’s address, electronic mail address or facsimile number as set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.01.

Section 5.02 Assignment; No Third Party Beneficiaries.

(a) Subject to Section 5.02(b) and Section 5.02(c), this Agreement and the rights, duties and obligations of the Company and the Holders of Registrable Securities, as the case may be, hereunder may not be assigned or delegated by the Company or the Holders of Registrable Securities, as the case may be, in whole or in part.

(b) Prior to the expiration of the applicable Lock-up Period, no Holder subject to any such Lock-up Period may assign or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, in violation of the applicable Lock-up Period, except in connection with a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become bound by the transfer restrictions set forth in this Agreement.

(c) This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the applicable Holders, which shall include (i) Permitted Transferees and (ii) any transferee of all of the Registrable Securities of a Holder.

(d) This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.02 hereof.

 

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(e) No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.01 hereof and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement in the form set forth in Exhibit A hereto). Any transfer or assignment made other than as provided in this Section 5.02 shall be null and void.

Section 5.03 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced. Each party agrees that an electronic copy of this Agreement shall be considered and treated like an original, and that an electronic or digital signature shall be as valid as a handwritten signature (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g.,www.docusign.com)).

Section 5.04 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

Section 5.05 Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority-in-interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, (a) any amendment hereto or waiver hereof that adversely affects one Holder or group of affiliated Holders, solely in his, her or its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected, (b) any amendment hereto or waiver hereof that adversely affects the rights of any Existing Holder shall require the consent of such Existing Holder, and (c) any amendment hereto or waiver hereof that adversely affects either the Existing Holders as a group or the New Holders as a group, as the case may be, in a manner that is materially adversely different from the other Holders shall require the consent of at least a majority-in-interest of the Registrable Securities held by such Existing Holders or a majority-in-interest of the Registrable Securities held by such New Holders, as applicable, at the time in question so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

Section 5.06 Other Registration Rights. Other than as provided in (i) the Warrant Agreement, dated as of October 28, 2020, by and between the Company and Continental Stock Transfer & Trust Company and (ii) the Backstop Agreement, dated as of November 7, 2021 by and between the Company and certain of the Existing Holders, the Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other

 

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registration rights agreement or agreement with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail. For so long as any Existing Holders hold, in the aggregate, at least five percent (5%) of the outstanding shares of Common Stock of the Company, the Company will not grant any person or entity with any registration rights with respect to the capital stock of the Company that are senior to or in conflict or inconsistent with the rights of the Holders as set forth in this Agreement in any material respect.

Section 5.07 Term. This Agreement shall terminate upon the earlier of (a) the tenth anniversary of the date of this Agreement, (b) the date as of which all of the Registrable Securities have been sold or disposed of and (c) with respect to any particular Holder, the date as of which (i) all of the Registrable Securities held by such Holder have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)) or (ii) such Holder is permitted to sell the Registrable Securities held by him, her, or it under Rule 144 (or any similar provision) under the Securities Act without limitation on the amount of securities sold or the manner of sale or another exemption from registration under the Securities Act. The provisions of Section 3.05 and Article IV shall survive any termination.

Section 5.08 Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 5.09 Entire Agreement; Restatement. This Agreement constitutes the full and entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. Upon the consummation of the transactions contemplated by the Merger Agreement, the Existing Registration Rights Agreement shall no longer be of any force or effect.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

COMPANY:
FISCALNOTE HOLDINGS, INC.
By:  

/s/ Timothy Hwang

Name:   Timothy Hwang
Title:   Chief Executive Officer
SPONSOR:
DUDDELL STREET HOLDINGS LIMITED
By:  

/s/ Manoj Jain

Name:   Manoj Jain
Title:   Director
OTHER EXISTING HOLDERS:
By:  

/s/ Bradford Allen

Name:   Bradford Allen
By:  

/s/ Marc Holtzman

Name:   Marc Holtzman

 

[Signature Page to Amended and Restated Registration Rights Agreement]


NEW HOLDER:
MASO CAPITAL INVESTMENTS LIMITED
By:  

/s/ Manoj Jain

Name:   Manoj Jain
Title:   Authorized Signatory
NEW HOLDER:
BLACKWELL PARTNERS LLC — SERIES A
By:  

/s/ Manoj Jain

Name:   Manoj Jain
Title:   Authorized Signatory
NEW HOLDER:
STAR V PARTNERS LLC
By:  

/s/ Manoj Jain

Name:   Manoj Jain
Title:   Authorized Signatory
NEW HOLDER:
By:  

/s/ Tim Hwang

Name:   Tim Hwang
NEW HOLDER:
TIMOTHY HWANG REVOCABLE TRUST, ORIGINALLY DATED JANUARY 10, 2019
By:  

/s/ Timothy T. Hwang

Name:   Timothy T. Hwang
Title:   Trustee

 

[Signature Page to Amended and Restated Registration Rights Agreement]


NEW HOLDER:
By:  

/s/ Gerald Yao

Name:   Gerald Yao
NEW HOLDER:
GERALD YAO REVOCABLE TRUST, DATED JANUARY 10, 2019
By:  

/s/ Gerald Yao

Name:   Gerald Yao
Title:   Trustee
NEW HOLDER:
GERALD YAO 2021 GRAT, DATED JUNE 30, 2021
By:  

/s/ Gerald Yao

Name:   Gerald Yao
Title:   Trustee
NEW HOLDER:
GERALD YAO 2019 GRAT, DATED JAUNUARY 10, 2019
By:  

/s/ Gerald Yao

Name:   Gerald Yao
Title:   Trustee
NEW HOLDER:
By:  

/s/ Keith Nilsson

Name:   Keith Nilsson

 

[Signature Page to Amended and Restated Registration Rights Agreement]


NEW HOLDER:
VISIONNAIRE VENTURES FUND I, LP
By:  

/s/ Keith Nilsson

Name:   Keith Nilsson
Title:   Managing Partner
NEW HOLDER:
XPLORER CAPITAL FUND III L.P.
By:  

/s/ Keith Nilsson

Name:   Keith Nilsson
Title:   Managing Partner
NEW HOLDER:
XPLORER CAPITAL
By:  

/s/ Keith Nilsson

Name:   Keith Nilsson
Title:   Managing Partner
NEW HOLDER:
XC FISCALNOTE – A, LLC
By:  

/s/ Keith Nilsson

Name:   Keith Nilsson
Title:   Managing Director

 

[Signature Page to Amended and Restated Registration Rights Agreement]


NEW HOLDER:
XC FISCALNOTE – B, LLC
By:  

/s/ Keith Nilsson

Name:   Keith Nilsson
Title:   Managing Director
NEW HOLDER:
By:  

/s/ Conrad Yiu

Name:   Conrad Yiu
NEW HOLDER:
SKYONE CAPITAL PTY LTD ATF AS1 GF NO.11
By:  

/s/ Conrad Yiu

Name:   Conrad Yiu
Title:   Director
NEW HOLDER:
By:  

/s/ Key Compton

Name:   Key Compton
NEW HOLDER:
GLOBAL PUBLIC OFFERING MASTER FUND, LP
By: Urgent International Inc., its owner and operator
By:  

/s/ Key Compton

Name:   Key Compton
Title:   Managing Director

 

[Signature Page to Amended and Restated Registration Rights Agreement]


NEW HOLDER:
GPO FN NOTEHOLDER LLC
By:   Stonehill Capital Management LLC, as Manager
By:  

/s/ Paul Malek

Name:   Paul Malek
Title:   General Counsel
NEW HOLDER:
By:  

/s/ Michael J. Callahan

Name:   Michael J. Callahan
NEW HOLDER:
By:  

/s/ Stanley McChrystal

Name:   Stanley McChrystal
NEW HOLDER:
By:  

/s/ Anna Sedgley

Name:   Anna Sedgley
NEW HOLDER:
By:  

/s/ Brandon Sweeney

Name:   Brandon Sweeney
NEW HOLDER:
By:  

/s/ Jon Slabaugh

Name:   Jon Slabaugh

 

[Signature Page to Amended and Restated Registration Rights Agreement]


NEW HOLDER:
By:  

/s/ Josh Resnik

Name:   Josh Resnik
NEW HOLDER:
By:  

/s/ Krystal Putman-Garcia

Name:   Krystal Putman-Garcia
NEW HOLDER:
By:  

/s/ Reed Fawell

Name:   Reed Fawell
NEW HOLDER:
By:  

/s/ Paul Donnell

Name:   Paul Donnell
NEW HOLDER:
By:  

/s/ Todd Aman

Name:   Todd Aman
NEW HOLDER:
By:  

/s/ Vlad Eidelman

Name:   Vlad Eidelman

 

[Signature Page to Amended and Restated Registration Rights Agreement]


NEW HOLDER:
By:  

/s/ Vibha Jain Miller

Name:   Vibha Jain Miller

 

[Signature Page to Amended and Restated Registration Rights Agreement]


Exhibit A

REGISTRATION RIGHTS AGREEMENT JOINDER

The undersigned is executing and delivering this joinder (this “Joinder”) pursuant to the Amended and Restated Registration Rights Agreement, dated as of [•] (as the same may hereafter be amended, the “Registration Rights Agreement”), among FiscalNote Holdings, Inc., a Delaware corporation (the “Company”), and the other persons or entities named as parties therein. Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Registration Rights Agreement.

By executing and delivering this Joinder to the Company, and upon acceptance hereof by the Company upon the execution of a counterpart hereof, the undersigned hereby agrees to become a party to, to be bound by, and to comply with the Registration Rights Agreement as a Holder of Registrable Securities in the same manner as if the undersigned were an original signatory to the Registration Rights Agreement, and the undersigned’s shares of Common Stock shall be included as Registrable Securities under the Registration Rights Agreement to the extent provided therein.

Accordingly, the undersigned has executed and delivered this Joinder as of the __________ day of __________, 20__.

 

 

Signature of Stockholder

 

Print Name of Stockholder

Its:

Address:

 

 

Agreed and Accepted as of

 

____________, 20__

[________]

By:

 

 

Name:

 

Its:

 

Exhibit 10.6

FISCALNOTE HOLDINGS, INC.

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is entered into, effective as of the 29th day of July, 2022, by and between FiscalNote Holdings, Inc., a Delaware corporation (the “Company”), and the individual signatory hereto (“Indemnitee”).

WHEREAS, it is essential to the Company to retain and attract as directors and officers the most capable persons available;

WHEREAS, Indemnitee is a director and/or officer of the Company;

WHEREAS, both the Company and Indemnitee recognize the risk of litigation and other claims against directors and officers of corporations;

WHEREAS, the certificate of incorporation of the Company provides that the Company shall have the power to indemnify and advance expenses to its directors and officers to the fullest extent permitted under applicable law; and

WHEREAS, in recognition of Indemnitee’s need for specific contractual assurance of substantial protection against personal liability, and as an inducement to provide effective services to the Company as a director and/or officer, the Company wishes to provide for (a) the indemnification of and the advancement of expenses to Indemnitee as provided in this Agreement and, subject to the provisions of this Agreement, except to the extent prohibited by applicable law (whether partial or complete), and (b) to the extent insurance is maintained, the continued coverage of Indemnitee under the Company’s directors’ and officers’ liability insurance policies.

NOW, THEREFORE, in consideration of the above premises and of Indemnitee continuing to serve the Company directly or, at its request, with another enterprise, and intending to be legally bound hereby, the parties agree as follows:

 

  1.

Certain Definitions:

 

  a.

Board” shall mean the Board of Directors of the Company.

 

  b.

Affiliate” shall mean any corporation or other person or entity that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with, the person specified, including, without limitation, with respect to the Company, any direct or indirect subsidiary of the Company.


  c.

A “Change in Control” means (i) the liquidation, dissolution or winding-up of the Company, (ii) the sale, license or lease of all or substantially all of the assets of the Company, or (iii) a share exchange, reorganization, recapitalization, or merger or consolidation of the Company with or into any other corporation or corporations (or other form of business entity) or of any other corporation or corporations (or other form of business entity) with or into the Company, but excluding any merger effected exclusively for the purpose of changing the domicile of the Company; provided, however, that a Change in Control shall not include any of the aforementioned transactions listed in clauses (i), (ii) and (iii) involving the Company or a Subsidiary Corporation in which the holders of shares of the Company voting stock outstanding immediately prior to such transaction or any Affiliate of such holders continue to hold at least a majority, by voting power, of the capital stock or, by a majority, based on fair market value as determined in good faith by the Board, of the assets, in each case in substantially the same proportion, of (x) the surviving or resulting corporation (or other form of business entity), (y) if the surviving or resulting corporation (or other form of business entity) is a wholly owned subsidiary of another corporation (or other form of business entity) immediately following such transaction, the parent corporation (or other form of business entity) of such surviving or resulting corporation (or other form of business entity) or (z) a successor entity holding a majority of the assets of the Company.

 

  d.

Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by the Indemnitee.

 

  e.

“Expenses” shall mean any expense, liability or loss, including reasonable attorneys’ fees, judgments, fines, ERISA excise taxes and penalties, amounts paid or to be paid in settlement, any interest, assessments or other charges imposed thereon, any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement and all other costs and obligations, paid or incurred in connection with investigating, defending, resolving, being a witness in, participating in (including on appeal) or preparing for any of the foregoing in, any Proceeding relating to any Indemnifiable Event.

 

  f.

“Indemnifiable Event” shall mean any event or occurrence that takes place either prior to or after the execution of this Agreement, related to the fact that Indemnitee is or was a director or officer of the Company or an Affiliate of the Company, or while a director or officer is or was serving at the request of the Company or an Affiliate of the Company as a director, officer, employee, trustee, agent or fiduciary of another foreign or domestic corporation, partnership, joint venture, employee benefit plan, trust or other enterprise or was a director, officer, employee or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of another enterprise at the request of such predecessor corporation, or related to anything done or not done by Indemnitee in any such capacity.

 

2


  g.

Independent Counsel” shall mean a law firm, or a person admitted to practice law in any State of the United States, that is experienced in matters of corporation law and neither presently is, nor in the past three years has been, retained to represent: (i) the Company or the Indemnitee in any matter material to either such party (other than with respect to serving as Independent Counsel (or similar independent legal counsel position) as to matters concerning the rights of Indemnitee under this Agreement, the rights of other indemnitees under similar indemnification agreements or the rights of Indemnitee or other indemnitees to indemnification under the Company’s certificate of incorporation or bylaws) or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, “Independent Counsel” shall not include any law firm or person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee’s rights under this Agreement. For the avoidance of doubt, “Independent Counsel” also shall not include any law firm or person who represented or advised any entity or person in connection with a Change in Control of the Company.

 

  h.

Proceeding” shall mean any threatened, pending or completed action, suit or proceeding or any alternative dispute resolution mechanism (including an action by or in the right of the Company or an Affiliate of the Company) or any inquiry, hearing or investigation, whether conducted by the Company or an Affiliate of the Company or any other party or entity (including a government agency), that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other.

 

  i.

Voting Securities” shall mean any securities of the Company that vote generally in the election of directors.

 

  2.

Agreement to Indemnify.

 

  a.

General Agreement. In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses except to the extent prohibited by law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto). The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s certificate of incorporation, its bylaws, vote of its stockholders or disinterested directors or applicable law.

 

  b.

Initiation of Proceeding. Notwithstanding anything in this Agreement to the contrary, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless (i) the Company has joined in or the Board has consented to the initiation of such Proceeding, (ii) the

 

3


  Proceeding is one to enforce rights under this Agreement or (iii) the Proceeding is instituted after a Change in Control (other than a Change in Control approved by a majority of the directors on the Board who were directors immediately prior to such Change in Control) and Independent Counsel has approved its initiation. The prohibition of indemnification contained in this subsection 2(b) shall apply to the defense of any counterclaim (except for a compulsory counterclaim by the Indemnitee against the Company for which the Indemnitee shall have rights to indemnification in accordance with the terms of this Agreement), cross-claim, affirmative defense or like claim of the Company in such Proceeding).

 

  c.

Expense Advances. Subject to Section 5(b), Indemnitee shall be entitled to select counsel to represent him or her and to select experts and consultants to be used in his or her defense. In selecting counsel, experts and consultants, Indemnitee shall consider whether his or her interests reasonably permit him or her to retain such persons along with other indemnitees; provided, however, that this Agreement shall not require such joint retentions. In the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Proceeding by reason of (or arising in part out of) an Indemnifiable Event, the Company shall, prior to the final disposition of a Proceeding, advance to Indemnitee any and all Expenses incurred in connection with such Proceeding (an “Expense Advance”) within thirty (30) calendar days after the receipt by the Company of a written request for such advance or advances from time to time. Such written request shall include or be accompanied by a statement or statements reasonably evidencing the Expenses incurred by or on behalf of the Indemnitee and for which advancement is requested. The Indemnitee shall qualify for such Expense Advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that the Indemnitee undertakes to repay such Expense Advances if and to the extent that it is ultimately determined by a court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified by the Company. Indemnitee’s obligation to reimburse the Company for Expense Advances shall be unsecured and no interest shall be charged thereon. This Section 2(c) shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 2(b) or 2(f).

 

  d.

Mandatory Indemnification. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any Proceeding relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, Indemnitee shall be indemnified against all Expenses incurred in connection therewith.

 

  e.

Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

4


  f.

Prohibited Indemnification. No indemnification pursuant to this Agreement shall be paid by the Company on account of any Proceeding in which a final judgment is rendered against Indemnitee or Indemnitee enters into a settlement, in each case (i) for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act of 1934, as amended (the “Exchange Act”) or similar provisions of any federal, state or local laws; (ii) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or (iii) for which payment is prohibited by law. Notwithstanding anything to the contrary stated or implied in this Section 2(f), indemnification pursuant to this Agreement relating to any Proceeding against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws shall not be prohibited if Indemnitee ultimately establishes in any Proceeding that no recovery of such profits from Indemnitee is permitted under Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws. With respect to subpart (ii) of this subparagraph, the Company shall make indemnification payments during the time periods otherwise required by this Agreement if payments by the insurance carrier(s) have not previously been made; and to the extent the carrier(s) later make payments, Indemnitee will transfer or assign those payments to the Company.

 

  3.

Indemnification Process and Appeal.

 

  a.

To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company (following the final disposition of the applicable Proceeding) a written request for indemnification, including therein or therewith, except to the extent previously provided to the Company in connection with a request or requests for advancement pursuant to Section 2(c), a statement or statements reasonably evidencing all Expenses incurred or paid by or on behalf of the Indemnitee and for which indemnification is requested. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification.

 

  b.

Upon written request by the Indemnitee for indemnification pursuant to the first sentence of Section 3(a), if required by applicable law and to the extent not otherwise provided pursuant to the terms of this Agreement, a determination with respect to the Indemnitee’s entitlement to indemnification shall be made in the specific case as follows: (i) if a Change in Control shall have occurred and if so requested in writing by the Indemnitee, by Independent Counsel in a written opinion to the Board; or (ii) if a Change in Control shall not have occurred (or if a Change in Control shall have occurred but the Indemnitee shall not have requested that indemnification be determined by Independent Counsel as provided in clause (i) of this Section 3(b), (A) by a majority vote of the Disinterested Directors, even

 

5


  though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board or (D) by the Company’s stockholders in accordance with applicable law. Notice in writing of any determination as to the Indemnitee’s entitlement to indemnification shall be delivered to the Indemnitee promptly after such determination is made, and if such determination of entitlement to indemnification has been made by Independent Counsel in a written opinion to the Board, then such notice shall be accompanied by a copy of such written opinion. If it is determined that the Indemnitee is entitled to indemnification, then payment to the Indemnitee of all amounts to which the Indemnitee is determined to be entitled shall be made within twenty (20) calendar days after such determination and, in no event, not later than sixty (60) calendar days after the Indemnitee’s written request for indemnification. If it is determined that the Indemnitee is not entitled to indemnification, then the written notice to the Indemnitee (or, if such determination has been made by Independent Counsel in a written opinion, the copy of such written opinion delivered to the Indemnitee) shall disclose the basis upon which such determination is based. The Indemnitee shall cooperate with the person, persons or entity making the determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to the Indemnitee and reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification.

 

  c.

If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 3(b), the Independent Counsel shall be selected as provided in this Section 3(c). If a Change in Control shall not have occurred (or if a Change in Control shall have occurred but the Indemnitee shall not have requested that indemnification be determined by Independent Counsel as provided in clause (i) of Section 3(b)), then the Independent Counsel shall be selected by the Board, and the Company shall give written notice to the Indemnitee advising the Indemnitee of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred and the Indemnitee shall have requested that indemnification be determined by Independent Counsel, then the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and the Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, the Indemnitee or the Company, as the case may be, may, within ten (10) calendar days after such written notice of selection has been given, deliver to the Company or to the Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the law firm or person so selected does not meet the requirements of “Independent Counsel” as defined in Section 1, and the objection shall set forth the basis of such assertion.

 

6


  Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the law firm or person so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Chancery Court or another court of competent jurisdiction in the State of Delaware has determined that such objection is without merit. If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 3(b) and, following the expiration of twenty (20) calendar days after submission by the Indemnitee of a written request for indemnification pursuant to Section 3(a), Independent Counsel shall not have been selected, or an objection thereto has been made and not withdrawn, then either the Company or the Indemnitee may petition the Delaware Chancery Court or other court of competent jurisdiction in the State of Delaware for resolution of any objection that shall have been made by the Company or the Indemnitee to the other’s selection of Independent Counsel and/or for appointment as Independent Counsel of a law firm or person selected by such court (or selected by such person as the court shall designate), and the law firm or person with respect to whom all objections are so resolved or the law firm or person so appointed shall act as Independent Counsel under Section 3(b). If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 3(b), then the Company agrees to pay the reasonable fees and expenses of such Independent Counsel and to fully indemnify and hold harmless such Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

  d.

Suit to Enforce Rights. If Indemnitee has not received full indemnification or Expense Advances within sixty (60) or thirty (30) calendar days, respectively, after making a demand in accordance with Section 3(a), or if Indemnitee contends that Company has not performed other obligations required by this Agreement, or if Company has not provided consents on counsel selection, settlement or any other issue as described in this Agreement, Indemnitee may enforce his or her rights under this Agreement by commencing litigation in any court in the State of Delaware having subject matter jurisdiction thereof seeking a determination of the issue by the court or challenging any determination by the Company (including by its directors, Independent Counsel or its stockholders) or any aspect thereof. The Company hereby consents to service of process and to appear in any such proceeding. Any determination by the Company (including by its directors, Independent Counsel or its stockholders) not challenged by the Indemnitee shall be binding on the Company and Indemnitee. The Company shall be precluded from asserting in any such proceeding that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The remedy provided for in this Section 3 shall be in addition to any other remedies available to Indemnitee at law or in equity. Company and Indemnitee may, by a written agreement signed by Company and Indemnitee, agree to a different method to resolve any disagreement concerning Indemnitee’s rights, unless resolution by a court is required by law.

 

7


  e.

Defense to Indemnification, Burden of Proof, and Presumptions. It shall be a defense to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition) that it is not permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action, or any determination by the Company (including by its directors, Independent Counsel or its stockholders) or otherwise, as to whether Indemnitee is entitled to be indemnified, or is entitled to an Expense Advance, the burden of proving such a defense shall be on the Company and it shall be presumed that the Indemnitee is entitled to indemnification or to an Expense Advance, as the case may be. Neither the failure of the Company (including by its directors, Independent Counsel or its stockholders) to have made a determination prior to the commencement of such action by Indemnitee that indemnification of the claimant is proper under the circumstances because Indemnitee has met the standard of conduct set forth in applicable law, nor an actual determination by the Company (including by its directors, Independent Counsel or its stockholders) that the Indemnitee is not entitled to Indemnification or an Expense Advance or has not met the applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. Neither such failure to have made the determination, nor an actual determination that the Indemnitee is not entitled to indemnification or an Expense Advance shall be admissible for any purposes in any such proceeding. For purposes of any determination of good faith under any applicable standard of conduct, Indemnitee shall be deemed to have acted in good faith if Indemnitee relied on the records or books of account of the Company, including financial statements, or on information supplied to Indemnitee by the officers of the Company in the course of their duties, or on the advice of legal counsel for the Company or the Board or counsel selected by any committee of the Board or on information or records given or reports made to the Company by an independent certified public accountant or by an appraiser, investment banker or other expert selected with reasonable care by the Company or the Board or any committee of the Board. The provisions of the preceding sentence shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct. The knowledge and/or actions, or failure to act, or any director, officer, agent or employee of the Company shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

  4.

Indemnification for Expenses Incurred in Enforcing Rights.

 

  a.

The Company shall, within sixty (60) calendar days of demand therefore, indemnify Indemnitee against any and all reasonable Expenses that are incurred by Indemnitee in connection with any action brought by Indemnitee for: (i) indemnification or Expense Advances under this Agreement or any other agreement or under applicable law or the Company’s certificate of incorporation or bylaws now or

 

8


  hereafter in effect relating to indemnification for Indemnifiable Events, or to enforce any other rights under this Agreement; and/or (ii) recovery under directors’ and officers’ liability insurance policies maintained by the Company; but only in the event that Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advance or other rights, or insurance recovery, as the case may be. In addition, the Company shall, if so requested by Indemnitee, advance the foregoing Expenses to Indemnitee, subject to and in accordance with Section 2(c).

 

  b.

If Company and Indemnitee disagree about whether Expenses described in this Section 4 are reasonable, the issue shall first be presented to Independent Counsel, whose opinion shall be binding on Company. If Indemnitee disagrees with the opinion of Independent Counsel, he or she may file a lawsuit in an appropriate court in Delaware seeking a decision; provided, however, that Indemnitee and Company may agree in writing to an alternative method to resolve the disagreement.

 

  5.

Notification and Defense of Proceeding.

 

  a.

Notice. Promptly after receipt by Indemnitee of notice of the commencement of any Proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Agreement, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve the Company from any liability that it may have to Indemnitee, except as provided in Section 5(c).

 

  b.

Defense. With respect to any Proceeding as to which Indemnitee notifies the Company of the commencement thereof, the Company will, if authorized by law and applicable procedural rules, be entitled to participate in the Proceeding at its own expense. Except as otherwise provided below, the Company may assume the defense thereof with counsel reasonably satisfactory to Indemnitee. If requested by Indemnitee, such counsel shall have substantial experience representing people in Indemnitee’s position in Proceedings of the type at issue. After notice from the Company to Indemnitee of its election to assume the defense of any Proceeding, the Company shall not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee for the defense of such Proceeding except as provided below. Indemnitee shall have the right to employ legal counsel in such Proceeding, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense shall be at Indemnitee’s expense unless: (i) the employment of legal counsel by Indemnitee has been authorized by the Company, (ii) Indemnitee has reasonably determined that there may be a conflict of interest between Indemnitee and the Company in the defense of the Proceeding, (iii) after a Change in Control, the employment of counsel by Indemnitee has been approved by the Independent Counsel or (iv) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases all Expenses of the Proceeding shall be borne by the Company. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company, or as to which Indemnitee shall have made the determination provided for in (ii) above or under the circumstances provided for in (i) and (i) above.

 

9


If the Company assumes the defense, as described above, Indemnitee’s right to indemnification for settlement or liability (as opposed to defense costs) shall be determined by the rules set forth for indemnification in this Agreement. By assuming the defense, the Company does not assume responsibility for indemnification for liability or settlement if such indemnification is not otherwise available.

If Indemnitee and the Company disagree about whether Indemnitee should have his or her own lawyer, expert or consultant, such dispute shall first be presented to the Independent Counsel. The determination of the Independent Counsel shall be binding on the Company; but if Indemnitee disagrees with the determination he or she may commence an action in an appropriate Delaware court to seek a judicial determination of the issue.

 

  c.

Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any amounts paid in settlement of any Proceeding effected without the Company’s written consent, such consent not to be unreasonably withheld; provided, however, that if a Change in Control has occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Counsel has approved the settlement. The Company shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. The Company shall not be liable to indemnify the Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity as a result of Indemnitee’s failure to provide notice, at its expense, to participate in the defense of such action, and the lack of such notice materially prejudiced the Company’s ability to participate in defense of such action. The Company’s liability hereunder shall not be excused if participation in the Proceeding by the Company was barred by this Agreement.

 

  6.

Establishment of Trust. In the event of a Change in Control, the Company shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and from time to time upon written request of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request to be incurred in connection with any Proceeding relating to an Indemnifiable Event. The amount or amounts to be deposited in the Trust pursuant to the foregoing funding obligation shall be determined by the Independent Counsel; provided, however, that if Indemnitee disagrees with the determination of the Independent Counsel, Indemnitee may file a lawsuit in an appropriate Delaware court seeking a determination of the issue, as set forth in Sections 3 and 4 hereof. The terms of the Trust shall provide that (i) the Trust shall not be revoked or the principal thereof invaded without the written consent of the Indemnitee, (ii) the Trustee shall advance, within thirty (30) calendar days of a request by

 

10


  the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the same circumstances for which the Indemnitee would be required to reimburse the Company under Section 2(c) of this Agreement), (iii) the Trust shall continue to be funded by the Company in accordance with the funding obligation set forth above, (iv) the Trustee shall promptly pay to the Indemnitee all amounts for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or otherwise no later than sixty (60) calendar days after notice pursuant to Section 3 and (v) all unexpended funds in the Trust shall revert to the Company upon a final determination by the Independent Counsel or a court of competent jurisdiction, as the case may be, that the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be chosen by the Indemnitee. Nothing in this Section 6 shall relieve the Company of any of its obligations under this Agreement. All income earned on the assets held in the Trust shall be reported as income by the Company for federal, state, local and foreign tax purposes. The Company shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all expenses (including attorneys’ fees), claims, liabilities, loss and damages arising out of or relating to this Agreement or the establishment and maintenance of the Trust.

 

  7.

Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under the Company’s certificate of incorporation, bylaws, applicable law or otherwise; provided, however, that this Agreement shall supersede any prior indemnification agreement between the Company and the Indemnitee. To the extent that a change in applicable law (whether by statute or judicial decision) permits greater indemnification than would be afforded currently under the Company’s certificate of incorporation, applicable law or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater benefits so afforded by such change. The rights of Indemnitee under the Company’s certificate of incorporation as they exist as of the date hereof shall not be reduced or limited by any change therein occurring after the date hereof, unless Indemnitee agrees in writing to such reduction or limitation.

 

  8.

Liability Insurance. To the extent the Company maintains an insurance policy or policies providing general and/or directors’ and officers’ liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director or officer. The Company shall use its best efforts to maintain such insurance on substantially the same terms and conditions, including limits of liability, as such exist (1) on the effective date of this Agreement or (2) if more favorable to the Indemnitee, on the date of the Company’s first public listing on a U.S. or non-U.S. stock exchange.

 

  9.

Period of Limitations. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Company or any Affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of three (3) years from the date of accrual of such cause of action or such longer period as may be required by state law under the circumstances. Any claim or cause of action of the Company or its Affiliate shall be extinguished and deemed released unless asserted by the timely filing and notice of a legal action within such period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, the shorter period shall govern.

 

11


  10.

Amendment of this Agreement. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be binding unless in the form of a writing signed by the party against whom enforcement of the waiver is sought, and no such waiver shall operate as a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided herein, no failure to exercise or any delay in exercising any right or remedy hereunder shall constitute a waiver thereof.

 

  11.

Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights. However, if Company pursues an action as subrogee and that action leads to further claims against Indemnitee, this Agreement shall apply to such further claims.

 

  12.

No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise received an unconditional and non-recoverable payment (under any insurance policy or otherwise) of the amounts otherwise indemnifiable hereunder.

 

  13.

Duration of Agreement. This Agreement shall continue until and terminate upon the later of (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a director or officer of the Company or (b) one (1) year after the final disposition of any Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 3(d) of this Agreement relating thereto.

 

  14.

Binding Effect. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company), assigns, spouses, heirs and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity pertaining to an Indemnifiable Event even though Indemnitee may have ceased to serve in such capacity at the time of any Proceeding.

 

12


  15.

Severability. If any provision (or portion thereof) of this Agreement shall be held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, (a) the remaining provisions shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, void or unenforceable.

 

  16.

Contribution. To the fullest extent permissible under applicable law, whether or not the indemnification provided for in this Agreement is available to Indemnitee for any reason whatsoever, the Company shall pay all or a portion of the amount that would otherwise be incurred by Indemnitee for Expenses in connection with any claim relating to an Indemnifiable Event, as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s). The Company will to the fullest extent permissible under applicable law indemnify and hold harmless Indemnitee from any claim of contribution that may be brought by directors, officers, employees or other agents or representatives of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

  17.

Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in such State without giving effect to its principles of conflicts of laws. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement may be brought in the Delaware Court of Chancery, (ii) consent to submit to the jurisdiction of the Delaware Court of Chancery for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii)waive any objection to the laying of venue of any such action or proceeding in the Delaware Court of Chancery, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court of Chancery has been brought in an improper or inconvenient forum.

 

  18.

Headings; References; Pronouns. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. References herein to section numbers are to sections of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the singular or plural as appropriate.

 

13


  19.

Notices. All notices, demands and other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered by hand, against receipt or mailed, postage prepaid, certified or registered mail, return receipt requested and addressed to the Company at:

FiscalNote Holdings, Inc.

1201 Pennsylvania Avenue NW

Washington DC 20004

Attention: General Counsel

and to Indemnitee at the address set forth below Indemnitee’s signature hereto.

Notice of change of address shall be effective only when given in accordance with this Section. All notices complying with this Section shall be deemed to have been received on the date of hand delivery or on the third business day after mailing.

 

  20.

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

*    *    *    *    *

 

14


IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the day specified above.

 

FISCALNOTE HOLDINGS, INC.
a Delaware corporation
By:  

 

Print Name:
Title:

INDEMNITEE,

an individual

By:  

 

Address for notices:

 

 

 

 

 

15

Exhibit 10.7

***Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and is the type the registrant treats as private or confidential. Such omitted information is indicated by brackets (“[***]”) in this exhibit.***

AMENDMENT AND RESTATEMENT AGREEMENT

This AMENDMENT AND RESTATEMENT AGREEMENT (this “Restatement Agreement”) is made as of July 29, 2022 (the “Restatement Date”), by and among FISCALNOTE, INC., a Delaware corporation (“Borrower Representative”), each other Person party hereto as a borrower (together with the Borrower Representative, collectively, “Borrowers”, and each, a “Borrower”), each Person party hereto as a guarantor (collectively, “Guarantors”, and each, a “Guarantor”), after the consummation of the Restatement Date Merger, the Person identified on the signature pages hereto as a “New Guarantor” (the “New Guarantor”), RUNWAY GROWTH FINANCE CORP. (formerly known as Runway Growth Credit Fund Inc.), as administrative agent and collateral agent (in such capacities, the “Agent”), the Existing Lenders (as defined below) not constituting Outgoing Lenders, and the New Lenders (as defined below).

RECITALS

A. Reference is made to that certain Amended and Restated Credit and Guaranty Agreement, dated as of October 19, 2020 (as amended, restated, supplemented or otherwise modified and in effect immediately prior to the Restatement Date, the “Existing Credit Agreement”), by and among FiscalNote, Inc., a Delaware corporation, each other Person party thereto as a borrower from time to time, each Person party thereto as a guarantor from time to time, the lenders from time to time party thereto, and the Person from time to time acting as administrative agent and collateral agent thereunder.

B. In connection with this Restatement Agreement, Borrowers will prepay all principal amount, accrued and unpaid interest, including PIK Amount, and other outstanding Obligations owing to Last Out Lenders (other than inchoate indemnity and reimbursement obligations), and a portion of the outstanding First Out Term Loan (in each case, as defined in the Existing Credit Agreement).

C. Pursuant to that certain Exit Consent, dated as of the date hereof, by and among Borrower Representative, the Lenders party to the Existing Credit Agreement (collectively, “Existing Lenders”, and each, an “Existing Lender”) have agreed, among other things, to permit the repayment of the Obligations owing to the Last Out Lenders and a portion of the Obligations owing to the First Out Lenders, and Last Out Lenders have waived any right to approve the modification of the Existing Credit Agreement pursuant to this Restatement Agreement subject to the prepayment in full of the Obligations owing to Last Out Lenders (other than inchoate indemnity and reimbursement obligations) immediately following the effectiveness of this Restatement Agreement.

D. Pursuant to the terms and subject to the conditions of Restatement Agreement, the parties hereto have agreed to amend and restate the Existing Credit Agreement in the form attached hereto (the “Restated Credit Agreement”).

E. In connection with this Restatement Agreement, the undersigned lenders identified as “New Lenders” on the signature pages hereto (collectively, “New Lenders”, and each, a “New Lender”) intend to be joined to the Restated Credit Agreement as a Lender thereunder and to provide Commitments as set forth in the Restated Credit Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set forth in this Restatement Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Agent, Lenders, Borrowers and Guarantors hereby agree as follows:


1. Defined Terms; Recitals. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Restated Credit Agreement (including those capitalized terms used in the recitals hereto). The recitals set forth above shall be construed as part of this Restatement Agreement as if set forth fully in the body of this Restatement Agreement.

2. Joinder of New Guarantor.

(a) In accordance with Section 6.11 of the Restated Credit Agreement, Section 26 of the Security Agreement and Section 25 of that certain Intercompany Subordination Agreement, dated as of October 19, 2020 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Intercompany Agreement”), by and among the Obligors (as defined therein) party thereto from time to time, in favor of Agent, upon the consummation of the Restatement Date Merger, New Guarantor, by its signature below, becomes a “Guarantor” under the Restated Credit Agreement, “Grantor” under the Security Agreement and “Obligor” under the Intercompany Agreement, with the same force and effect as if originally named therein as a “Guarantor”, “Grantor” and “Obligor”, as applicable, and New Guarantor hereby agrees to all of the terms and provisions of the Restated Credit Agreement, Security Agreement and Intercompany Agreement applicable to it as a “Guarantor”, “Grantor” and “Obligor”, as applicable, thereunder.

(b) New Guarantor represents and warrants to Agent and each Lender that, after giving effect to the Restatement Date Merger, New Guarantor has the corporate power and is duly authorized to enter into, deliver and perform this Restatement Agreement, and that the Restated Credit Agreement, Security Agreement and Intercompany Agreement are the legal, valid and binding obligation of New Guarantor, enforceable against New Guarantor in accordance with its terms, except as enforceability may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditor’s rights generally.

3. Amendment and Restatement of the Existing Credit Agreement. Subject solely to the condition set forth in Section 4 of this Restatement Agreement, the Existing Credit Agreement is hereby amended and restated in its entirety as set forth on Exhibit A attached hereto, which Restated Credit Agreement shall immediately and automatically become effective upon the effectiveness of this Restatement Agreement in accordance with Section 4 below. Each of the parties hereto agrees that each Exhibit and Schedule to the Restated Credit Agreement is hereby replaced in its entirety as attached to Exhibit A hereto.

4. Condition to Effectiveness of Restatement Agreement. This Restatement Agreement shall become effective as of the satisfaction (or waiver) of each of the conditions precedent set forth in Section 3.1 of the Restated Credit Agreement.

5. Reaffirmation. Except as specifically amended pursuant to the terms hereof or to the extent amended and restated on the Restatement Date, each Loan Party hereby acknowledges and agrees that: (i) the Restated Credit Agreement and all other Loan Documents (and all covenants, terms, conditions and agreements therein) shall remain in full force and effect, and are hereby ratified and confirmed in all respects by such Loan Party; (ii) this Restatement Agreement shall not in any way release or impair the rights, duties, Obligations, Liens or security interests created pursuant to the Existing Credit Agreement and the other Loan Documents or affect the relative priorities thereof, in each case to the extent in force and effect thereunder as of the Restatement Date, except as modified hereby or by documents, instruments and agreements executed and delivered in connection herewith, and all of such rights, duties, Obligations and Liens are assumed, ratified and affirmed by such Loan Party; (iii) this Restatement Agreement shall not constitute a substitution or novation of such Loan Party’s Obligations or any of the other rights, duties and obligations of the parties under the Existing Credit Agreement and the other Loan Documents; and (iv) the execution, delivery and effectiveness of this Restatement Agreement shall not operate as a waiver of any right, power or remedy of Agent or any Lender under the Existing Credit Agreement or the other Loan Documents, nor constitute a waiver of any covenant, agreement or obligation under the Existing Credit Agreement or the other Loan Documents, except to the extent that any such covenant, agreement or obligation is modified hereby.

6. Joinder of New Lenders. From and after the Restatement Date, each party hereto agrees that, for all purposes of the Restated Credit Agreement and the other Loan Documents, each New Lender shall be deemed to be a Lender under the Restated Credit Agreement, and each New Lender shall be a party to the Restated Credit Agreement and shall have the rights, remedies and obligations of a Lender under the Restated Credit Agreement.

 

2


7. Release.

(a) In consideration of the agreements of Agent and the Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Loan Party by its execution of this Restatement Agreement, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and the Lenders, and their successors and permitted assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the “Releasees”), of and from all demands, actions, causes of action, suits, controversies, damages and any and all other claims, counterclaims, defenses, rights of setoff, demands and liabilities whatsoever of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which such Loan Party or any of its successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the Restatement Date, including, without limitation, for or on account of, or in relation to, or in any way in connection with the Existing Credit Agreement or any of the other Loan Documents or transactions thereunder or related thereto.

(b) Each Loan Party by its execution of this Restatement Agreement understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

(c) Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

8. Supplemental Schedules to the Security Agreement. The schedules to the Security Agreement attached hereto as Exhibit B supplement the corresponding schedules to the Security Agreement and shall be deemed a part thereof for all purposes of the Security Agreement.

9. Miscellaneous.

(a) Reference to the Effect on the Existing Credit Agreement and Loan Documents. On and after the Restatement Date, each reference in the Loan Documents to “the Credit Agreement” or words of similar import shall mean and be a reference to the Existing Credit Agreement, as amended and restated by the Restated Credit Agreement.

(b) Incorporation of Restated Credit Agreement Provisions. The provisions contained in Section 11 (Choice of Law, Venue and Jury Trial Waiver), Section 12.3 (Indemnification), Section 12.9 (Counterparts), and Section 12.6 (Severability) of the Restated Credit Agreement are incorporated herein by reference to the same extent as if reproduced herein in their entirety, mutatis mutandis.

(c) Headings. Section headings in this Restatement Agreement are included for convenience of reference only and shall not constitute a part of this Restatement Agreement for any other purpose.

(d) Entire Agreement. This Restatement Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

(e) Successors/Assigns. This Restatement Agreement shall bind, and the rights hereunder shall inure to, the respective successors and permitted assigns of the parties hereto, subject to the provisions of the Restated Credit Agreement and the other Loan Documents.

[SIGNATURES APPEAR ON FOLLOWING PAGES]

 

3


[SIGNATURE PAGE TO AMENDMENT AND RESTATEMENT AGREEMENT]

IN WITNESS WHEREOF, the parties have caused this Restatement Agreement to be executed as of the Restatement Date.

 

BORROWERS:
FISCALNOTE, INC.
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
CQ-ROLL CALL, INC.
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
CAPITOL ADVANTAGE LLC
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
VOTERVOICE, L.L.C.
By: FiscalNote, Inc., its sole manager
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
SANDHILL STRATEGY LLC
By:  

/s/ Jon Slabaugh

Name: Jon Slabaugh
Title: Manager


[SIGNATURE PAGE TO AMENDMENT AND RESTATEMENT AGREEMENT]

 

NEW GUARANTOR:
FISCALNOTE HOLDINGS, INC.
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer


[SIGNATURE PAGE TO AMENDMENT AND RESTATEMENT AGREEMENT]

 

GUARANTORS:
FISCALNOTE INTERMEDIATE HOLDCO, INC. (F/K/A FISCALNOTE HOLDINGS, INC.)
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer
FISCALNOTE HOLDINGS II, INC.
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
FIRESIDE 21, LLC
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: President
FACTSQUARED, LLC
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
THE OXFORD ANALYTICA INTERNATIONAL GROUP, LLC
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: President
OXFORD ANALYTICA INC.
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
FISCALNOTE BOARDS LLC
By: FiscalNote, Inc., its sole manager
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President


[SIGNATURE PAGE TO AMENDMENT AND RESTATEMENT AGREEMENT]

 

PREDATA, INC.
By:  

/s/ Joshua Haecker

Name: Joshua Haecker
Title: Chief Executive Officer
CURATE SOLUTIONS, INC.
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
FORGE.AI, INC.
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President
FRONTIER STRATEGY GROUP LLC
By:  

/s/ Timothy Hwang

Name: Timothy Hwang
Title: Chief Executive Officer and President


[SIGNATURE PAGE TO AMENDMENT AND RESTATEMENT AGREEMENT]

 

AGENT:
RUNWAY GROWTH FINANCE CORP.
By:  

/s/ Thomas B. Raterman

Name: Thomas B. Raterman
Title: Chief Financial Officer and Chief Operating Officer
LENDERS:
RUNWAY GROWTH FINANCE CORP.
By:  

/s/ Thomas B. Raterman

Name: Thomas B. Raterman
Title: Chief Financial Officer and Chief Operating Officer
ORIX GROWTH CAPITAL, LLC
By:  

/s/ Jeffrey Bede

Name: Jeffrey Bede
Title: Head of OGC
CLOVER OROCHI LLC

By: CLOVER PRIVATE CREDIT OPPORTUNITIES ORIGINATION II LP and CLOVER PRIVATE CREDIT OPPORTUNITIES ORIGINATION (LEVERED) II LP,

its sole members

By: UBS O’CONNOR LLC, its investment manager
By:  

/s/ Rodrigo Trelles

Name: Rodrigo Trelles
Title: Managing Director
ACM ASOF VIII SAAS FINCO LLC
By:  

/s/ Baxter Wasson

Name: Baxter Wasson
Title: Managing Director


EXHIBIT A

Second Amended and Restated Credit and Guaranty Agreement

(See attached)


SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT

dated as of July 29, 2022 among

FISCALNOTE, INC., as Borrower

RUNWAY GROWTH FINANCE CORP., as Administrative Agent and Collateral Agent

and

The Lenders Party Hereto

RUNWAY GROWTH FINANCE CORP., AND ORIX GROWTH CAPITAL, LLC, as Joint Lead Arrangers and Joint Bookrunners


This SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) dated as of July 29, 2022 (the “Restatement Date”) is entered into among FISCALNOTE, INC., a Delaware corporation (“Borrower Representative”), each other Person party hereto as a borrower (together with each other Person party hereto as a borrower from time to time after the date hereof, collectively, “Borrowers”, and each, a “Borrower”), each Person party hereto as a guarantor (together with each Person party hereto as a guarantor from time to time after the date hereof, collectively, “Guarantors”, and each, a “Guarantor”), the lenders party hereto from time to time, (collectively, “Lenders”, and each a “Lender”), and RUNWAY GROWTH FINANCE CORP., as administrative agent and collateral agent for the Lenders (in such capacity, “Agent”).

RECITALS

WHEREAS, certain of the Borrowers and the Guarantors are party to that certain Amended and Restated Credit and Guaranty Agreement, dated as of October 19, 2020 (as amended, restated, supplemented or otherwise modified and in effect immediately prior to the Restatement Date, the “Existing Credit Agreement”), among Borrowers and Guarantors party thereto, the lenders party thereto (the “Existing Lenders”) and Agent;

WHEREAS, as of the Restatement Date, the aggregate principal amount of Term Loans (as defined in the Existing Credit Agreement) outstanding under the Existing Credit Agreement is set forth on Schedule 1, Part A hereto (the “Existing Term Loans”);

WHEREAS, pursuant to the terms of the Restatement Agreement, the terms of the Existing Term Loans shall be modified and the Existing Credit Agreement shall be amended and restated in its entirety as set forth in this Agreement as of the Restatement Date;

WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation of the “Obligations” under and as defined in the Existing Credit Agreement; and

WHEREAS, it is the intent of the Loan Parties to confirm that all Obligations shall continue in full force and effect and that, from and after the Restatement Date, all references to the “Credit Agreement” contained in the Loan Documents shall be deemed to refer to this Agreement.

AGREEMENT

The parties hereto hereby agree as follows:

1. ACCOUNTING AND OTHER TERMS

Accounting terms not defined in this Agreement shall be construed in accordance with GAAP, and calculations and determinations shall be made following GAAP, consistently applied. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth on Exhibit A. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative. Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this Agreement. For purposes of the Loan Documents, whenever a representation or warranty is made to a Person’s knowledge or awareness, knowledge or awareness means the actual knowledge, after reasonable investigation, of any Responsible Officer of such Person. Notwithstanding anything to the contrary herein, only those leases (assuming for purposes hereof that such applicable leases were in existence on the date hereof) that would have constituted capital leases in conformity with GAAP as of December 31, 2017 shall be considered capital leases and any only lease obligations under such leases that would have so constituted capital leases shall be considered Indebtedness for purposes hereof, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance with this sentence.

 

2


2. LOAN AND TERMS OF PAYMENT

2.1 Promise to Pay. Each Borrower hereby unconditionally promises to pay Agent, for the ratable benefit of Lenders, the outstanding principal amount of all Loans, accrued and unpaid interest, fees and charges thereon and all other amounts owing hereunder as and when due in accordance with this Agreement.

2.2 Availability and Repayment of the Restatement Date Incremental Term Loans.

(a) Availability. Subject to the terms and conditions of this Agreement, effective as of the Restatement Date, each Lender shall make, severally and not jointly, a loan in a principal amount equal to its Restatement Date Incremental Term Loan Commitment (collectively, the “Restatement Date Incremental Term Loans”, and each a “Restatement Date Incremental Term Loan”). Once repaid the Restatement Date Incremental Term Loans may not be reborrowed.

(b) Repayment. Commencing on the Amortization Date, and continuing thereafter on each Payment Date, Borrowers shall make, consecutive monthly payments of equal principal, each installment in an amount sufficient to fully amortize 50% of the aggregate outstanding original principal amount of the Restatement Date Incremental Term Loans by the Term Loan Maturity Date. The balance of the outstanding principal of the Restatement Date Incremental Term Loans, and all accrued and unpaid interest in respect thereof (inclusive of the PIK Amount), the Restatement Date Final Payment, other fees and other sums, if any, shall be due and payable in full on the Term Loan Maturity Date. The Term Loans may only be prepaid in accordance with Sections 2.2(c) or (d). The initial amortization schedule is attached hereto as Schedule 1, Part C.

(c) Mandatory Prepayments.

(i) Upon an Acceleration. If the Loans are accelerated following the occurrence and during the continuance of an Event of Default, Borrowers shall immediately pay to Agent, for the ratable benefit of Lenders, an amount equal to the sum of:

(1) all outstanding principal plus accrued and unpaid interest thereon (inclusive of the PIK Amount), plus

(2) the Restatement Date Final Payment, plus

(3) the Original Final Payment, plus,

(4) the Prepayment Fee (if any), plus

(5) all other sums, if any, that shall have become due and payable, including interest at the Default Rate, if applicable.

(ii) Dispositions. Within five Business Days of the date of receipt by any Loan Party or any of its Subsidiaries of the Net Cash Proceeds of any voluntary or involuntary sale or disposition of assets of any Loan Party or any of its Subsidiaries (including Net Cash Proceeds of insurance or arising from casualty losses or condemnations and payments in lieu thereof, but excluding (i) Net Cash Proceeds from sales or dispositions which qualify as Permitted Transfers except for Transfers described in clause (f) of the defined term “Permitted Transfers”) and (ii) Net Cash Proceeds from any such event in any fiscal year, to the extent the aggregate Net Cash Proceeds from all such sales or dispositions occurring in such fiscal year do not exceed $1,000,000, Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.5 in an amount equal to 100% of such Net Cash Proceeds received by such Person in connection with such sales or dispositions; provided, that so long as (A) no Default or Event of Default shall have occurred and is continuing or would result therefrom, (B) Borrowers shall have given Agent prior written notice of Borrowers’ intention to apply such monies to the costs of replacement of the properties or assets that are the subject of such sale or disposition or to the cost of purchase of other assets useful in the business of such Loan Party or its Subsidiaries, (C) the monies are held in a Deposit Account in which Agent has a perfected first-priority security interest, and (D) such Loan Party or its Subsidiary, as applicable,

 

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completes such replacement or purchase within 180 days after the initial receipt of such monies (or, if such Loan Party entered into a binding commitment within such 180 day period, completes such replacement or purchase within 270 days after the initial receipt of such monies), then the Loan Party or such Loan Party’s Subsidiary whose assets were the subject of such disposition shall have the option to apply such monies to the costs of replacement of the assets that are the subject of such sale or disposition or the cost of purchase of other assets useful in the business of such Loan Party or its Subsidiaries unless and to the extent that such applicable period shall have expired without such replacement or purchase being made or completed, in which case, any amounts remaining in the Deposit Account referred to in clause (C) above shall be paid to Agent and applied in accordance with Section 2.5. Nothing contained in this Section 2.2(b)(ii) shall permit any Loan Party or any of its Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 7.1.

(iii) Indebtedness. Within five Business Days of the date of incurrence by any Loan Party or any of its Subsidiaries of any Indebtedness (other than Permitted Indebtedness), Borrowers shall prepay the outstanding principal amount of the Obligations in accordance with Section 2.5 in an amount equal to 100% of the Net Cash Proceeds received by such Person in connection with such incurrence. The provisions of this Section 2.2(b)(iii) shall not be deemed to be implied consent to any such incurrence otherwise prohibited by the terms of this Agreement.

(d) Permitted Prepayment of Loans. Without limiting the generality of the provisions of Section 2.2(b) above, Borrowers shall have the option to prepay all, but not less than all, of the Loans, provided Borrower Representative provides written notice to Agent (whereupon Agent shall promptly deliver a copy of such written notice to Lenders) of its election to prepay the Loans at least ten (10) Business Days prior to such prepayment (or such lesser amount of time as Agent may agree), and pay, on the date of such prepayment, to Agent, an amount equal to the sum of:

(i) all outstanding principal plus accrued and unpaid interest thereon (inclusive of the PIK Amount), plus

(ii) the Restatement Date Final Payment, plus

(iii) the Original Final Payment, plus

(iv) the Prepayment Fee (if any), plus

(v) all other sums, if any, that shall have become due and payable, including interest at the Default Rate, if applicable.

Each prepayment pursuant to this Section 2.2(d) shall be applied ratably to the Term Loans unless otherwise indicated herein.

(e) Use of Proceeds. Borrowers shall use the proceeds of the Restatement Date Incremental Term Loans (i) to refinance the Existing Term Loans, any interest accrued thereon through the Restatement Date, including any PIK Amount (as defined in the Existing Credit Agreement), the fees due pursuant to the Last Out Fee Letter (as defined in the Existing Credit Agreement) and any other fees, expenses or other amounts due and payable pursuant to the Existing Credit Agreement and the other Loan Documents on the Restatement Date, and (ii) for working capital and other general corporate purposes, in each case, subject to Section 7.11.

(f) Treatment of Existing Term Loans held by RGFC. Notwithstanding the foregoing, with respect to Existing Term Loans held by Runway Growth Finance Corp. (“RGFC”), a portion of the Existing Term Loans in principal amount equal to the Restatement Date Incremental Term Loan Commitment held by RGFC shall be deemed to remain outstanding from the date originally funded, and the terms thereof shall be deemed modified to have the terms of the Restatement Date Incremental Term Loans set forth herein. The foregoing shall not affect or reduce the fees due in respect of the Restatement Date Incremental Term Loans or the payment of the Restatement Date Final Payment

 

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2.3 Payment of Interest.

(a) Interest Rate. Subject to Section 2.3(b), the outstanding principal amount of each Restatement Date Incremental Term Loan shall accrue interest from and after its Funding Date, at the Applicable Rate, and Borrowers shall pay such interest in respect of such Restatement Date Incremental Term Loan monthly in arrears on each Payment Date commencing on the first Payment Date following such Funding Date. In addition, the outstanding principal amount of each Restatement Date Incremental Term Loan shall accrue interest from and after the Restatement Date at a per annum rate equal to the Applicable PIK Rate, which amount shall be paid-in-kind, by being added to the principal balance of the Restatement Date Incremental Term Loans (inclusive of any PIK Amount theretofore so added) on each Payment Date commencing on the first Payment Date following its Funding Date. On the Term Loan Maturity Date, any outstanding PIK Amount shall be due and payable without notice or demand. For the avoidance of doubt, it is hereby acknowledged and agreed that, except to the extent expressly provided to the contrary herein, any reference to the principal balance of the Term Loans or the Obligations shall be deemed to include the PIK Amount with respect thereto.

(b) Default Rate. Upon the occurrence and during the continuance of an Event of Default, at the election of the Required Lenders, the Obligations shall bear interest at a rate per annum which is five percentage points (5.0%) above the rate that is otherwise applicable thereto (the “Default Rate”). Fees and expenses which are required to be paid by Borrowers pursuant to the Loan Documents (including, without limitation, Lender Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Agent or Lenders.

(c) Payment; Interest Computation. Interest is payable monthly in arrears on the Payment Date of the following month and shall be computed on the basis of a 360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 11:00 a.m. Eastern Time on any day may, at Agent’s discretion, be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Loan shall be included and the date of payment shall be excluded. Changes to the Applicable Rate based on changes to the Prime Rate shall be effective as of the Payment Date immediately following such change.

(d) Maximum Interest. Notwithstanding any provision in this Agreement or any other Loan Document, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (the “Maximum Rate”). If a court of competent jurisdiction shall finally determine that a Borrower has actually paid to or for the benefit of Lenders an amount of interest in excess of the amount that would have been payable if all of the Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by Borrowers shall be applied as follows: first, to the payment of principal outstanding in respect of the Loans; second, after all principal is repaid, to the payment of accrued interest; third, to the payment of Lender Expenses and any other Obligations; and fourth, after all Obligations are repaid, the excess (if any) shall be refunded to Borrowers or paid to whomsoever may be legally entitled thereto, provided that amounts payable to Lenders, shall be paid ratably.

2.4 Fees and Charges. Borrowers shall pay:

(a) Restatement Date Incremental Closing Fee. To Agent for the benefit of Lenders in accordance with their Pro Rata Share of the Restatement Date Incremental Term Loans funded by each Lender, a closing fee in accordance with the Restatement Date Fee Letter.

(b) Prepayment Fee. If any Term Loan is prepaid at any time, in whole or in part, pursuant to Section 2.2(c) or (d) or in connection with the replacement of any Non-Consenting Lender, Borrowers shall pay to Agent, for the benefit of all Lenders in accordance with their respective Pro Rata Share of the Term Loans prepaid, a prepayment fee (the “Prepayment Fee”) equal to an amount determined by multiplying the amount being prepaid (or required to be prepaid) by the following applicable percentage amount:

 

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(i) two percent (2.0%) through and including the second year anniversary of the Restatement Date; and

(ii) one percent (1.0%) after the second year anniversary of the Restatement Date through and including the third year anniversary of the Restatement Date.

No Prepayment Fee shall apply to any prepayment of the Term Loans following the third year anniversary of the Restatement Date.

(c) Restatement Date Final Payment. To Agent, the Restatement Date Final Payment, for the benefit of Lenders in accordance with their Pro Rata Share of the Restatement Date Incremental Term Loans, as and when due in accordance with Sections 2.2(b), (c) and (d).

(d) Original Final Payment. To RGFC, the Original Final Payment on the earlier to occur of a prepayment pursuant to Section 2.2(c) or (d), or July 29, 2023.

(e) Lender Expenses. With respect to Lender Expenses incurred through the Restatement Date, all Lender Expenses (including reasonable and documented attorneys’ fees and expenses for documentation and negotiation of this Agreement and the other Loan Documents) incurred through the Restatement Date shall be paid in accordance with the Restatement Date Commitment Letter and withheld from the funding of the Incremental Term Loans, and with respect to Lender Expenses incurred thereafter, shall be paid within two (2) Business Days after demand by Agent.

(f) Fees Fully Earned. Unless otherwise expressly provided in this Agreement, the fees and charges specified in clauses (a) through (c) above are fully-earned as of the Restatement Date and due and payable on such date, and in no event shall any Borrower be entitled to any credit, rebate, refund, reduction, proration or repayment of any fees or charges earned by each Lender pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of a Lender’s obligation to make loans and advances hereunder and notwithstanding the required payment date for such fees or charges. Agent, on behalf of Lenders, may debit and deduct amounts owing by Borrowers under the clauses of this Section 2.4 pursuant to the terms of Section 2.5(c).

2.5 Payments; Application of Payments; Automatic Payment Authorization.

(a) All payments to be made by Borrowers under any Loan Document, including payments of principal and interest and all fees, charges, expenses, indemnities and reimbursements, shall be made in immediately available funds in Dollars, without setoff, recoupment or counterclaim, before 11:00 a.m. Eastern Time on the date when due. Payments of principal and/or interest received after 11:00 a.m. Eastern Time may, at Agent’s discretion, be considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.

(b) As long as no Event of Default has occurred and is continuing, any repayment of principal of the Loans and payments of interest shall be applied to amounts then due, unless specified herein, and any prepayment of principal of Loans shall be applied as follows:

(i) first, to pay any Lender Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents, until paid in full,

(ii) second, to pay any fees then due to Agent under the Loan Documents until paid in full,

(iii) third, ratably to pay any Lender Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid in full,

(iv) fourth, ratably to pay any fees then due to any of the Lenders under the Loan Documents until paid in full,

 

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(v) fifth, ratably, to pay interest accrued in respect of the Term Loans until paid in full,

(vi) sixth, ratably to pay the outstanding principal balance of the Term Loans (inclusive of any PIK Amount) (in the inverse order of the maturity of the installments due thereunder) until the Term Loans are paid in full, and

(vii) seventh, to pay any other Obligations owed to any Lender.

In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (b) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its Pro Rata Share of amounts available to be applied pursuant thereto for such category. Upon the acceleration of the principal amount of any of the Loans in accordance with Section 8.1, each Loan Party irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent or any Lender, and Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations to the extent not expressly provided for above. To the extent a Lender receives a payment that is in excess of its the amount it would be entitled to in accordance with the foregoing, it shall contribute to Agent and/or the other Lenders as needed to ensure that each Secured Party receives the appropriate amount.

(c) Unless otherwise notified by Agent in writing, Agent, for itself or for the ratable benefit of Lenders, as applicable, may initiate debit entries to any Deposit Accounts as authorized on the Automatic Payment Authorization for principal and interest payments or any other amounts Borrowers owe Agent or Lenders when due. These debits shall not constitute a set-off. If the ACH payment arrangement is terminated for any reason, Borrowers shall make all payments due to Agent or Lenders at Agent’s address specified in Section 10, or as otherwise notified by Agent in writing.

(d) At the direction of Agent and Lenders, Lenders may require regular payments of principal, interest and fees to be paid to each Lender directly (by debit entry to a Deposit Account as authorized on an Automatic Payment Authorization or by wire instructions as confirmed in writing by each Lender), provided that such direction shall be given not less than five (5) Business Days prior to any change in the method of payment, and provided further that such direction shall include a schedule of payments required to each Lender as of each Payment Date.

(e) Loan Parties, Agent and each Lender hereby agree to the terms and conditions set forth on Schedule 3 with respect to withholding and related matters.

(f) If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Term Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Term Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (i) notify the Agent of such fact, and (ii) purchase (for cash at face value) participations in the Term Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Term Loans and other amounts owing them; provided that: (A) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and (B) the provisions of this paragraph shall not be construed to apply to (1) any payment made by a Borrower pursuant to and in accordance with the express terms of this Agreement as in effect on the Restatement Date or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Term Loans to any assignee or participant, other than to a Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

2.6 Promissory Notes. Borrowers agree that: (a) upon written notice by or on behalf of any Lender to Borrowers that a promissory note or other evidence of indebtedness is requested by such Lender to evidence the Loans and other Obligations owing or payable to, or to be made by, such Lender, Borrowers shall promptly (and in any event within three (3) Business Days of any such request) execute and deliver to such Lender an appropriate promissory

 

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note, in substantially the form attached hereto as Exhibit F, and (b) upon any Lender’s written request, and in any event within three (3) Business Days of any such request, Borrowers shall execute and deliver to such Lender new notes and/or divide the notes in exchange for then existing notes in such smaller amounts or denominations as such Lender shall specify in its sole and absolute discretion; provided, that the aggregate principal amount of such new notes shall not exceed the aggregate principal amount of the applicable Loans made by such Lender; provided, further, that such promissory notes that are to be replaced shall then be deemed no longer outstanding hereunder and replaced by such new notes and returned to Borrowers within a reasonable period of time after such Lender’s receipt of the replacement notes. Regardless whether or not any such promissory notes are issued, this Agreement shall evidence the Loans and other Obligations owing or payable by Borrowers to each Lender.

2.7 Incremental Facilities.

(a) Borrower Representative may, by written notice to Agent at any time and from time to time prior to the fifth anniversary of the Restatement Date, seek new (or an increase to the existing) Commitments of up to $100,000,000 in a minimum amount of no less than $10,000,000 (an “Incremental Term Loan Commitment”); provided, that, on a pro forma basis after giving effect to the loans to be borrowed under the Incremental Term Loan Commitment (“Incremental Term Loans”) and the proposed use of proceeds thereof, the ARR Ratio will be less than or equal to 1.50x, calculated on a pro forma basis, and based on the most recent fiscal quarter for which financial statements are available.

(b) Each such notice shall (i) be delivered at a time when no Default or Event of Default has occurred and is continuing or would result therefrom (and the effectiveness of the Incremental Term Loan Commitment shall be subject to no Default or Event of Default existing as of the time that such Incremental Term Loan Commitment becomes effective), and (ii) certify that the representations and warranties of Borrowers and the other Loan Parties set forth in the Loan Documents are true and correct in all material respects with the same effect as if then made (except to the extent such representations and warranties expressly relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date) and further certifying that such Incremental Term Loans when borrowed will constitute “senior debt”.

(c) Incremental Term Loans shall amortize on a schedule corresponding to the amortization schedule required of the existing Term Loans until the maturity date of such existing Term Loans.

(d) To the extent that the initial “yield” (determined by taking into account applicable interest rate margins, floors, upfront fees and original issue discount paid, but excluding agency, arrangement, structuring and underwriting fees) on any Incremental Term Loans exceeds the initial “yield” (determined by taking into account applicable interest rate margins, including interest paid-in-kind, floors, upfront fees and original issue discount paid, but excluding agency, arrangement, structuring and underwriting fees) applicable to the Term Loans immediately before giving effect to such Incremental Term Loans, by more than 50 basis points, the applicable margin otherwise in effect for the Term Loans immediately before giving effect to such increase, shall be increased by the amount of such differential in excess of 50 basis points.

(e) Other than with respect to pricing, margins, interest rate floors, fees and original issue discount and maturity date (which may be later but not before), the terms and provisions of any Incremental Term Loans shall be substantially identical to the Term Loans existing immediately prior to giving effect to any such Incremental Term Loan. Any Incremental Term Loans (i) shall rank pari passu in right of payment and pari passu or junior in right of security with the Term Loans outstanding immediately prior to giving effect to such Incremental Term Loans, or shall be unsecured, (ii) shall not be secured by any asset of Holdings or any of its Subsidiaries that is not also collateral securing the existing Term Loans, (iii) shall not be guaranteed by any person other than a Loan Party with respect to the existing Term Loans, (iv) if required by Agent or Required Lenders, shall be subject to an intercreditor agreement the terms of which are reasonably satisfactory to Required Lenders, so long as the Required Lenders’ approval is not unreasonably withheld, and (v) shall not be entitled to voluntary or mandatory prepayments except on a pari passu basis with then existing Term Loans.

(f) It is agreed and understood that each Lender shall have the right to participate in its pro rata share of any requested Incremental Term Loan Commitment, provided, that no Lender shall be obligated to participate in any such Incremental Term Loan Commitment. If any existing Lender elects not to provide the requested

 

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Incremental Term Loan Commitment pursuant to an exercise of their respective ratable participation rights, then (i) the addition of any Incremental Term Loan Commitment to the Credit Agreement shall require approval of Required Lenders, (ii) to the extent the Incremental Term Loan Commitment is so approved, Atalaya shall have the right of first refusal to participate on a greater than pro rata basis in any portion of such Incremental Term Loan Commitment as to which existing Lenders did not exercise ratable participation rights, and (iii) to the extent any lenders that are not existing Lenders under the Credit Agreement propose to participate in such Incremental Term Loan Commitment, any such lenders shall be reasonably acceptable to Agent and Required Lenders (such consent not to be unreasonably withheld, conditioned or delayed).

(g) Proceeds of the Incremental Term Loans will be used for working capital and other general corporate purposes, to the extent not prohibited by the Loan Documents, provided that the Incremental Term Loans shall not be used to refinance any then-outstanding Term Loans.

3. CONDITIONS OF LOANS

3.1 Conditions Precedent to Restatement Date Incremental Term Loans. The effectiveness of the Restatement Agreement and each Lender’s agreement to make the Restatement Date Incremental Term Loans, are subject solely to the following conditions precedent:

(a) Subject to the second to last paragraph of this Section, the Loan Documents as set forth on Schedule 2, Part A, duly executed by the parties thereto;

(b) the Restatement Date Refinancing shall have been consummated, or shall be consummated substantially simultaneously with the borrowing of the Restatement Date Incremental Term Loans;

(c) the Restatement Date Equity Contribution shall have been made substantially simultaneously with the borrowing of the Restatement Date Incremental Term Loans resulting in the Minimum Liquidity Condition being satisfied and Agent shall have received a detailed accounting of sources and uses confirming the same;

(d) the Agent shall have received an officer’s certificate from the Borrower Representative certifying that the conditions to the Restatement Date Merger set forth in the Restatement Date Merger Agreement (without giving effect to any modifications, consents, amendments or waivers thereto by Parent that in each case are materially adverse to the interests of the Initial Lenders, unless the Initial Lenders shall have provided written consent thereto, in each case, other than such conditions that by their nature are to be satisfied upon the closing of such transaction, have been satisfied or waived or are expected to be satisfied and waived on the Restatement Date or one business day thereafter (and in case of any waiver of such conditions, which waiver thereof is not materially adverse to the interest of the Initial Lenders or has been approved by the Initial Lenders);

(e) Holdings shall have received a combination of proceeds from the Trust Account and the Backstop Agreement in an amount that satisfies the Trust/Backstop Condition substantially simultaneously with the borrowing of the Restatement Date Incremental Term Loans;

(f) Initial Lenders shall have received (i) at least three (3) business days before the Restatement Date all documentation and other information about Borrowers and Guarantors that shall have been reasonably requested by the Agent in writing at least ten (10) calendar days prior to the Restatement Date and that Initial Lenders reasonably determine is required by U.S. regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act and (ii) at least three (3) business days prior to the Restatement Date, a Beneficial Ownership Certification with respect to any Loan Party that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation;

(g) Agent shall have received the good standing certificates in the jurisdiction of organization of each Loan Party;

 

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(h) all fees required to be paid pursuant to the Restatement Date Fee Letter and the reasonable and out of pocket expenses required to be paid on the Restatement Date pursuant to the Restatement Date Commitment Letter, to the extent invoiced (in the case of expenses) at least three (3) business days prior to the Restatement Date (except as otherwise agreed to by the Borrowers), shall, substantially simultaneously with the borrowing of the Restatement Date Incremental Term Loans, have been paid (which amounts may, at the Borrowers’ option, be offset against the proceeds of the substantially simultaneously with the borrowing of the Restatement Date Incremental Term Loans);

(i) the Specified Merger Agreement Representations shall be true and correct to the extent required by the definition thereof, and the Specified Representations shall be true and correct in all material respects (or if qualified by materiality, in all respects) (to the extent expressly made as of an earlier date, as of such earlier date);

(j) from the date of the Restatement Date Merger Agreement, there shall not have occurred a Company Material Adverse Effect (as defined in the Restatement Date Merger Agreement as in effect on the Commitment Date);

(k) Agent shall have received, to the extent the Parent has received the same under the Restatement Date Merger Agreement, (i) the Annual Financial Statements (as defined in the Restatement Date Merger Agreement) and (ii) the Interim Financial Statements (as defined in the Restatement Date Merger Agreement) and (iii) a pro forma consolidated balance sheet as of March 31, 2022 and a related consolidated statement of income for Holdings as of and for the fiscal quarter period ended on or about March 31, 2022 and a consolidated statement of income for Holdings as of December 31, 2021 for the four fiscal quarter period ended December 31, 2021, prepared in good faith after giving effect to the Restatement Date Transactions as if the Restatement Date Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such statement of income);

(l) Agent shall have received a solvency certificate of Parent’s chief financial officer (certifying that, after giving effect to the Transactions, Holdings and its subsidiaries on a consolidated basis are solvent) in substantially the form of Annex I attached to this Exhibit C to the Restatement Date Commitment Letter;

(m) Agent shall have received, subject in all respects to the second to last paragraph of this Section, the original stock certificates representing any Shares, if any, together with a stock power or other appropriate instrument of transfer, duly executed by the holder of record of such Shares and in blank, to the extent not previously delivered or contemplated to be delivered following the Restatement Date as set forth on Schedule 2, Part B; and

(n) Agent shall have received, a legal opinion of counsel to Loan Parties, addressed to the Agent and the Lenders, addressing matters reasonably requested by the Agent.

Notwithstanding the foregoing or any other provision in any Loan Documents to the contrary, to the extent a security interest in any Collateral is not or cannot be provided and/or perfected on the Restatement Date (the security interest in respect of which cannot be perfected by means of the filing of a UCC financing statement) and required to be pledged pursuant to the terms of the Loan Documents and is not able to be provided on the Closing Date after Borrowers’ use of commercially reasonable efforts to do so without undue burden or expense the perfection of such security interest in such Collateral will not constitute a condition precedent to the availability of the Loans on the Restatement Date, but a security interest in such Collateral will be required to be created and/or perfected within ninety (90) days after the Restatement Date.

Without limiting the generality of the provisions of the last paragraph of Section 11.01, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement or funded Loans hereunder shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required under this Section 4.01 to be consented to or approved by or acceptable or satisfactory to a Lender, unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

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3.2 Conditions Precedent to all Loans after the Restatement Date. Each Lender’s obligation to make the Loans contemplated to be funded after the Restatement Date are subject only to the following conditions precedent:

(a) the representations and warranties in this Agreement and the other Loan Documents shall be true, accurate, and complete in all material respects on the Funding Date of each Loan; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

(b) no Default or Event of Default shall have occurred and be continuing or result from the Loan.

3.3 Covenant to Deliver after the Restatement Date.

(a) After the Restatement Date, Borrowers agree to deliver to Agent each item required to be delivered to Agent under this Agreement as a condition precedent to any Loan. After the Restatement Date, Borrowers expressly agree that a Loan made prior to the receipt by Agent of any such item shall not constitute a waiver by Agent of a Borrower’s obligation to deliver such item, and the making of any Loan in the absence of a required item shall be in Agent’s sole discretion.

(b) After the Restatement Date, Borrowers agree to deliver the items set forth on Schedule 2 hereto within the timeframe set forth therein (or by such other date as Agent may approve in writing), in each case, in form and substance reasonably acceptable to Agent.

3.4 Procedures for Borrowing. To obtain a Loan (other than any Loan made on the Restatement Date), Borrower Representative shall deliver a completed written request to Agent (which may be delivered by email) no later than 3:00 p.m. Eastern Time, ten (10) Business Days prior to the date such Loan is requested to be made (whereupon Agent shall promptly notify all affected Lenders). On the Funding Date, each applicable Lender shall fund the applicable Loan made after the Restatement Date in the manner requested, provided that each of the conditions precedent to such Loan is satisfied.

4. [RESERVED]

5. REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants as follows on the Closing Date (and on each other date expressly provided for in this Agreement or any other Loan Document), provided that on the Restatement Date, each Loan Party represents and warrants only that the Specified Merger Agreement Representations are true and correct to the extent required by the definition thereof and the Specified Representations are true and correct in all material respects (or if qualified by materiality, in all respects, and to the extent expressly made as of an earlier date, as of such earlier date):

5.1 Due Organization, Authorization; Power and Authority.

(a) Each Loan Party and each of its Subsidiaries are duly existing and in good standing as a Registered Organization in their respective jurisdictions of formation and are qualified and licensed to do business and are in good standing in any other jurisdiction in which the conduct of their respective business or ownership of property require that they be qualified except, in each case, where the failure to do so could not reasonably be expected to have a Material Adverse Effect. In connection with this Agreement, Borrower Representative has delivered to Agent a completed certificate signed by Borrower Representative entitled “Perfection Certificate”. Except to the extent Borrower Representative has provided notice of a legal name change to Agent in accordance with Section 7.2, (i) each Loan Party’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (ii) each Loan Party is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (iii) the Perfection Certificate accurately sets forth each Loan Party’s organizational identification number or accurately states that such Loan Party has none; (iv) the Perfection Certificate accurately sets forth each Loan

 

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Party’s place of business, or, if more than one, its chief executive office as well as such Loan Party’s mailing address (if different than its chief executive office); (v) except as set forth in the Perfection Certificate, each Loan Party (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (vi) all other information set forth on the Perfection Certificate pertaining to each Loan Party and each of its Subsidiaries is accurate and complete in all material respects (it being understood and agreed that each Loan Party may from time to time update certain information in the Perfection Certificate after the Closing Date to the extent permitted by one or more specific provisions in this Agreement).

(b) The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party have been duly authorized, executed and delivered and do not (i) conflict with such Loan Party’s Operating Documents or require any approval of any holder of Equity Interests of a Loan Party other than consents or approvals that have been obtained and that are still in force and effect, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which such Loan Party or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect), (v) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material agreement by which such Loan Party is bound or (vi) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens. No Loan Party is in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a Material Adverse Effect.

5.2 Collateral. Each Loan Party has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens.

5.3 Accounts; Material Agreements. The Accounts are bona fide existing obligations. The property or services giving rise to such Accounts have been delivered or rendered. No Loan Party has received any notice of actual or imminent insolvency of an Account Debtor that owes payment with respect to any material Account. The material licenses and agreements to which any Loan Party or any of its Subsidiaries is a party are in full force and effect and no Loan Party is in material breach with respect thereto.

5.4 Litigation and Proceedings. Except as set forth in the Perfection Certificate or as disclosed in writing pursuant to Section 6.2, there are no actions, suits, litigations or proceedings, at law or in equity, pending, or, to the knowledge of any Responsible Officer, threatened in writing, against any Loan Party or any of its Subsidiaries in which any adverse decision (i) could reasonably expected to result in damages or costs in excess of Four Million Dollars ($4,000,000) or (ii) has had or could reasonably be expected to have a Material Adverse Effect.

5.5 Financial Statements; Financial Condition. All consolidated financial statements for the Loan Parties and each of their Subsidiaries delivered to Agent fairly present in all material respects the consolidated financial condition and results of operations of the Loan Parties and each of their Subsidiaries as of the respective dates and for the respective periods then ended, and there are no material liabilities (including any contingent liabilities) which are not reflected in such financial statements. There has not been any material deterioration in the consolidated financial condition of the Loan Parties and their respective Subsidiaries or the Collateral since the date of the most recent financial statements submitted to Agent.

5.6 Solvency.

(a) The Loan Parties, taken as a whole, are Solvent.

(b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

 

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5.7 Consents; Approvals. Each Loan Party and each of its Subsidiaries have obtained all third party consents, approvals, waivers, made all declarations or filings with, given all notices to, and obtained all consents, licenses, permits or other approvals from all Governmental Authorities that are necessary (i) to enter into the Loan Documents and consummate the transactions contemplated thereby, and (ii) to continue their respective businesses as currently conducted, except (with respect to this clause (ii)) where failure to do so could not reasonably be expected to result in a Material Adverse Effect.

5.8 Subsidiaries; Investments. No Loan Party has any Subsidiaries, except as noted on the Perfection Certificate or as disclosed to Agent pursuant to Section 6.11 below. No Loan Party owns any stock, partnership, or other ownership interest or other Equity Interests except for Permitted Investments.

5.9 Tax Returns and Payments. Except as provided in Schedule 5.9, each Loan Party and each of its Subsidiaries have timely filed all material required tax returns and reports (or appropriate extensions therefor), and such Loan Party and each of its Subsidiaries has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by such Loan Party or such Subsidiary, as applicable, except to the extent (i) such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor, or (ii) such taxes, assessments, deposits and contributions do not, individually or in the aggregate, exceed Two Hundred Thousand Dollars ($200,000). No Loan Party is aware of any claims or adjustments proposed for any prior tax years of any Loan Party or any of its Subsidiaries which could result in a material amount of additional taxes becoming due and payable by a Loan Party or any of its Subsidiaries.

5.10 Shares. Such Loan Party has full power and authority to create a first lien on the Shares and no disability or contractual obligation exists that would prohibit such Loan Party from pledging the Shares pursuant to this Agreement. There are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable with respect to the Shares. The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable. The Shares are not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and such Loan Party knows of no reasonable grounds for the institution of any such proceedings.

5.11 Compliance with Laws.

(a) No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(b) No Loan Party or Subsidiary of Loan Party is an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”, as such terms are defined in the Investment Company Act of 1940 as amended.

(c) No Loan Party or Subsidiary of a Loan Party is engaged, nor will it engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin security” as such terms are defined in Regulation U of the Federal Reserve Board as now and from time to time hereafter in effect (such securities being referred to herein as “Margin Stock”). None of the proceeds of the Loans or other extensions of credit under this Agreement have been (or will be) used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry any Margin Stock or for any other purpose which might cause any of the Loans or other extensions of credit under this Agreement to be considered a “purpose credit” within the meaning of Regulation T, U or X of the Federal Reserve Board.

 

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(d) No Loan Party has taken or permitted to be taken any action which might cause any Loan Document to violate any regulation of the Federal Reserve Board. No Loan Party or any of its Subsidiaries is in violation of any Sanctions. Neither the making of the Loans hereunder nor Borrowers’ use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. No Loan Party nor any of its Subsidiaries nor, to the knowledge of such Loan Party, any director, officer, employee or Affiliate of such Loan Party or such Subsidiary (a) is, or will become, a Sanctioned Person or a Sanctioned Entity, (b) has, or will have, any assets located in Sanctioned Entities, or (c) derives, or will derive, revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. Each of the Loan Parties and its Subsidiaries has implemented and maintains in effect policies and procedures reasonably designed to ensure compliance with Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws. Each of the Loan Parties and its Subsidiaries, and to the knowledge of each such Loan Party, each director, officer, employee, agent and Affiliate of each such Loan Party and each such Subsidiary, is in compliance with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws. No proceeds of any Loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity, or otherwise used in any manner that would result in a violation of any Sanction, Anti-Corruption Law or Anti-Money Laundering Law by any Person (including any Lender or other individual or entity participating in any transaction).

(e) Each Loan Party and its Subsidiaries are in compliance, in all material respects, with the USA Patriot Act. No part of the proceeds from the Loans made hereunder has been (or will be) used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

(f) No Reportable Event or Prohibited Transaction, as defined in ERISA has occurred or is reasonably expected to occur, and no Loan Party has failed to meet the minimum funding requirements of ERISA. No Loan Party has violated any applicable environmental laws in any material respect, maintains any properties or assets which have been designated in any manner pursuant to any environmental protection statute as a hazardous materials disposal site, or has received any notice, summons, citation or directive from the Environmental Protection Agency or any other similar Governmental Authority.

5.12 Holdings, Parent and Intermediate Parent as Holding Company. Each of Holdings, Parent and Intermediate Parent is a holding company and does not have any material liabilities (other than taxes, liabilities arising under the Loan Documents, the Restatement Date Merger Agreement and certain Subordinated Debt), own any material assets (other than the Equity Interests of Parent, Intermediate Parent, Borrowers and their respective Subsidiaries, as applicable) or engage in any operations or business (other than (i) the maintenance of its legal existence, the ownership of Equity Interests of Parent, Intermediate Parent, Borrowers and their respective Subsidiaries, as applicable, (ii) the rights and obligations under the Loan Documents, the Restatement Date Merger Agreement and certain Subordinated Debt, (iii) participating in tax, accounting and other administrative matters as a member of a consolidated group with Holdings, Parent, Intermediate Parent, Borrowers and their respective Subsidiaries, (iv) the granting of nonconsensual liens by operation of law, (v) the receipt and making of distributions and dividends permitted pursuant to Section 7.7 and the entry into affiliate transactions permitted by Section 7.8, (vi) establishing and maintaining bank accounts in the Ordinary Course of Business and in compliance with the terms of the Loan Documents; (vii) entering into and satisfying its obligations under employment agreements, stock option and stock ownership plans and other customary arrangements with officers, consultants, investment bankers, attorneys, advisors, employees and directors and performing the activities contemplated thereby, in each case, in the Ordinary Course of Business; (viii) the providing of customary indemnification to officers, consultants, managers and directors otherwise permitted hereunder; (ix) holding directors’ and shareholders’ meetings and preparing corporate and similar records; (x) issuing Equity Interests (other than Disqualified Equity Interests) and making capital contributions to Parent or Intermediate Parent with the net proceeds thereof; (xi) preparing reports to, and preparing and making notices to and filings with, Governmental Authorities and to the holders of its Equity Interests, including as required in accordance with applicable securities laws or to comply with listing requirements of applicable securities exchanges; (xii) maintaining a corporate office and activities related thereto; (xiii) entering into note purchase and subordination agreements with respect to, and issuing and satisfying its obligations in respect of, certain Subordinated Debt, subject to the terms of any applicable subordination agreement (or prior to entering into any such subordination agreement, any applicable terms of subordination); and (xiv) activities incidental to the business or activities described in the foregoing clauses (i) through (xiii).).

 

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5.13 Full Disclosure. No written representation, warranty or other statement of a Loan Party or any of its Subsidiaries in any certificate or written statement by or on behalf of a Loan Party or any of its Subsidiaries in connection with this Agreement, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading when taken as a whole in light of the circumstances under which they were made (it being recognized that the projections and forecasts provided by any Loan Party in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).

5.14 Binding Obligations; Perfect Liens.

(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(b) Agent’s Liens are validly created, perfected (other than (i) in respect of motor vehicles that are subject to a certificate of title, (ii) money, (iii) letter-of-credit rights (other than supporting obligations), (iv) commercial tort claims (other than those that, by the terms of the Security Agreement, are required to be perfected), and (v) any Deposit Accounts and Securities Accounts not subject to an Account Control Agreement as permitted by the Security Agreement, and subject only to the filing of financing statements, and the recordation of the Intellectual Property Security Agreement, in each case, in the appropriate filing offices), and first priority Liens, subject only to Permitted Liens.

5.15 No Material Adverse Effect. All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrowers to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended. Since December 31, 2019, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Effect.

5.16 Indebtedness. As of the Restatement Date, set forth on Schedule 5.16 to this Agreement is a true and complete list of all Indebtedness for borrowed money of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Restatement Date that is to remain outstanding immediately after giving effect to the closing hereunder on the Restatement Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Restatement Date.

6. AFFIRMATIVE COVENANTS

Each Loan Party shall, and shall cause each of its Subsidiaries to, do all of the following:

6.1 Government Compliance. Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect; comply, and cause each Subsidiary to comply, with all laws, ordinances and regulations to which it is subject except where a failure to do so could not reasonably be expected to have a Material Adverse Effect; obtain all of the Governmental Approvals required in connection with such Loan Party’s business and comply with all terms and conditions with respect to such Governmental Approvals except where the failure to so obtain or comply with such Governmental Approvals could not reasonably be expected to have a Material Adverse Effect; and obtain all Governmental Approvals required for the performance by each Loan Party of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Agent in accordance therewith, and comply with all terms and conditions with respect to such Governmental Approvals.

 

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6.2 Financial Statements, Reports, Certificates. Provide Agent with the following:

(a) Monthly Financial Statements. Within thirty (30) days after the last day of each month (other than the last month of a fiscal quarter), a company prepared consolidated balance sheet, income statement and statement of cash flows covering Holdings and its Subsidiaries’ operations for such month, in form reasonably acceptable to Agent, certified by a Responsible Officer as having been prepared in accordance with GAAP, consistently applied, except for the absence of footnotes, and subject to normal year-end adjustments.

(b) Quarterly Financial Statements. Within forty-five (45) days (or such later date as the same may be required to be filed with the SEC) after the last day of each fiscal quarter, a company prepared consolidated balance sheet, income statement and statement of cash flows covering Holdings and its Subsidiaries’ operations for such fiscal quarter, in form acceptable to Agent, certified by a Responsible Officer as having been prepared in accordance with GAAP, consistently applied, except for the absence of footnotes, and subject to normal year-end adjustments, and a report showing, for each Excluded Subsidiary (x) cash and other assets held by such Excluded Subsidiary as of the last day of such fiscal quarter, and (y) revenue recognized by each Excluded Subsidiary for such fiscal quarter.

(c) ARR and KPI Reporting. Together with the monthly financial statements and the quarterly financial statements, a report with respect to ARR and other key performance indicators, in substantially the form as the report delivered to Agent as of the Restatement Date or such other form as may from time to time be approved by Required Lenders in their reasonable good faith business judgment.

(d) Compliance Certificate. Within thirty (30) days after the last day of each month and together with the monthly financial statements (or within 45 days after the last day of each fiscal quarter and together with the quarterly financial statements), a duly completed Compliance Certificate signed by a Responsible Officer.

(e) Annual Operating Budget and Financial Projections. Within sixty (60) days after the end of each fiscal year of Holdings (and promptly within five (5) Business Days of any material modification thereto), an operating budget and projections, on a consolidated basis (including income statements, balance sheets and cash flow statements, by fiscal quarter) for the following 12-month period, together with any related business forecasts used in the preparation thereof, any projected changes in financial position and projected income, along with a description of the underlying assumptions applicable to such projections.

(f) Annual Audited Financial Statements. As soon as available, but no later than 90 days after the last day of Holdings’ fiscal year (or such later date as the same may be required to be filed with the SEC), audited consolidated financial statements prepared in accordance with GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Agent (except to the extent a qualification or exception is included in an opinion delivered with regard to the fiscal year ending within the final twelve (12) months during the term of this Agreement and is due to the scheduled maturity date of the Loans), together with any management letter with respect thereto. The term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified, and (ii) does not include any explanation, supplemental comment, or other comment concerning the ability of the applicable Person to continue as a going concern or concerning the scope of the audit.

(g) Other Statements. Within five (5) days of delivery, copies of all statements, reports and notices generally made available to any holders of Subordinated Debt.

(h) SEC Filings. Within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Parent with the Securities and Exchange Commission, provided that the same shall be deemed to have been delivered upon Borrower Representative providing a link thereto (including by email) to Agent.

 

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(i) Legal Action Notice. A prompt report of any legal actions pending or threatened in writing against any Loan Party or any of its Subsidiaries that could reasonably be expected to result in damages or costs to any Loan Party or any of its Subsidiaries, individually or in the aggregate for all related proceedings, of at least Four Million Dollars ($4,000,000) or would reasonably be expected to result in a Material Adverse Effect, or of any Loan Party or any of its Subsidiaries taking or threatening legal action against any third person with respect to a material claim which would reasonably be expected to result in costs or liabilities to Loan Parties or any Subsidiary individually or in the aggregate for all related proceedings, of at least Four Million Dollars ($4,000,000) or would reasonably be expected to result in a Material Adverse Effect; and with respect to any pending action or threatened action, a prompt report of any material development with respect thereto.

(j) Board Materials. Within ten (10) Business Days after delivery to Board members (or, as applicable, the members of any committee or subcommittee of the Board), but in any event at least one (1) Business Day prior to the applicable meeting, copies of all materials that Holdings provides to Board members (or committee or subcommittee members) in connection with meetings of the Board or of any committee or subcommittee of the Board, including any reports with respect to Borrowers’ operations or performance, and promptly after such meeting, minutes of such meetings; provided, however, the foregoing may be subject to such exclusions and redactions as necessary in order to (A) preserve the confidentiality of trade secrets or other highly confidential information, (B) prevent impairment of the attorney client privilege with respect to pending or threatened litigation, or (C) prevent a conflict of interest; provided, further, that the Lenders and Agent agree to hold in confidence all information so provided and to maintain confidentiality thereof in the same manner as would be required of a fiduciary;

(k) Intellectual Property Report. Together with the Compliance Certificate delivered at the end of each calendar quarter, a report in form reasonably acceptable to Agent, listing any applications or registrations that any Loan Party or any of its Subsidiaries has made or filed in respect of any Patents, Copyrights (other than Copyrights with respect to periodic publications and articles published in the Ordinary Course of Business) or Trademarks with the United States Patent and Trademark Office or the United States Copyright Office and the status of any outstanding applications or registrations since the last since report delivered to Agent;

(l) Other Reports and Information. Together with the monthly financial reports, reports as to the following, in form acceptable to Agent: accounts receivable and accounts payable aging, and, from time to time, any other information related to the financial or business condition of any Loan Party as and when reasonably requested by Agent.

(m) Bank Account Statements. At the end of each month, a copy of each account statement, with transaction detail, for each Deposit Account or Securities Account of a Loan Party or any of its Subsidiaries, or within 3 days, upon Agent’s request, evidence satisfactory to Agent of the balance maintained in any such Deposit Account or Securities Account.

(n) Equity Financing Documents. Together with the next Compliance Certificate due after the consummation of any equity financing transaction, a copy of the documents entered into in connection with such financing.

(o) Evidence of Insurance Renewal. Annually, prior to the expiration of Loan Parties’ then-current liability and casualty property insurance policies as required in accordance with Section 6.5, updated insurance certificates confirming required coverage and endorsements.

(p) Defaults. Promptly, but in any event within five (5) days after a Responsible Officer of a Loan Party has knowledge of any event or condition that constitutes a Default or an Event of Default, notice of such event or condition and a statement of the curative action that the applicable Loan Party proposes to take with respect thereto.

Agent may require Loan Parties to provide any required reports, notices and certificates through various electronic means, including Agent’s portfolio monitoring online portal, and shall promptly provide copies of such reporting to each Lender. At the written direction of Agent and Lenders, Lenders may require reporting and notices pursuant to this Section 6.2 to each Lender directly until further notice. In addition, at the written direction of any Lender, such Lender may suspend delivery of any reporting and notices pursuant to this Section 6.2, until further notice, whereupon Loan Parties shall cease to provide such reporting to such Lender until otherwise notified; provided further that if such request is made by the Lender which is also acting as Agent, then Loan Parties shall instead provide the foregoing reporting directly to the other Lenders that did not request to suspend reporting until otherwise notified.

 

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Notwithstanding the foregoing, the information required to be delivered pursuant to Section 6.2(b), (c) or (h) shall be deemed to have been delivered on the date on which (i) such information has been posted on the Internet at www.sec.gov or such other website previously notified by the Borrowers to the Agent to which each Lender and the Agent have access (whether a commercial, third-party website or whether sponsored by the Agent), and (ii) a link thereto shall have been delivered to Agent (including by email).

6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects, except for ordinary wear and tear, casualty event or as permitted to be disposed pursuant to the terms of this Agreement. Returns and allowances between a Loan Party and its Account Debtors shall follow such Loan Party’s customary practices as they exist at the Closing Date. Borrower Representative shall promptly notify Agent of all returns, recoveries, disputes and claims with respect to Inventory that involve more than One Million Dollars ($1,000,000).

6.4 Taxes; Pensions. Timely file, and cause each of its Subsidiaries to timely file, all required tax returns and material reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, and all other material assessments, deposits and contributions owed by such Loan Party and each of its Subsidiaries, except for (i) deferred payment of any taxes contested pursuant to the terms of Section 5.9, (ii) items set forth in Schedule 5.9, and (iii) taxes, assessments, deposits and contributions in an aggregate amount not to exceed Two Hundred Thousand Dollars ($200,000) at any time; and shall deliver to Agent, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

6.5 Insurance.

(a) Keep, and cause each Subsidiary to keep, its business and the Collateral insured for risks and in amounts customary for companies of a similar size, engaged in similar businesses and owning similar properties. Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates of any Loan Party.

(b) All property policies shall have a lender’s loss payable endorsement showing Agent as lender loss payable, all liability policies shall show, or have endorsements showing, Agent as an additional insured, in each case, in form satisfactory to Agent and as set forth on Exhibit D.

(c) After the occurrence and during the continuance of an Event of Default, all proceeds of any casualty policy shall, at the option of Agent, be payable to Agent on account of the Obligations.

(d) At Agent’s request, Borrower Representative shall deliver certified copies of insurance policies and evidence of all premium payments. Each provider of any such insurance required under this Section 6.5 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Agent, that it will give Agent thirty (30) days prior written notice before any such policy or policies shall be canceled (or ten (10) days’ notice for cancellation for non-payment of premiums).

(e) If any Loan Party fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Agent, Agent may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Agent deems prudent.

6.6 Deposit and Securities Accounts.

(a) Maintain Collateral Accounts only at the banks and other financial institutions identified in the Perfection Certificate or as disclosed pursuant to a notice timely delivered pursuant to subsection (b) below.

 

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Borrowers shall further maintain an ACH payment structure in favor of Agent, satisfactory to Agent.

(b) Subject to the grace periods described in Section 7(c) of the Security Agreement, for each Collateral Account that any Loan Party at any time maintains, Loan Parties shall cause the applicable bank, broker or financial institution at or with which any Collateral Account is maintained to execute and deliver an Account Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Agent’s Lien in such Collateral Account in accordance with the terms hereunder which Account Control Agreement may not be terminated without the prior written consent of Agent, provided that, no Account Control Agreements shall be required with respect to Excluded Accounts.

6.7 Intellectual Property.

(a) Protect, defend and maintain the validity and enforceability of its Material IP. Promptly advise Agent in writing of infringements or any other similar event that could reasonably be expected to result in a Material Adverse Effect. Not suffer any claim of infringement with respect to its Material IP unless (i) such claim is dismissed within thirty days from initiation thereof, (ii) such claim is contested in good faith and by appropriate proceedings and adequate reserves have been taken or (iii) Loan Parties have demonstrated to Agent’s reasonable satisfaction that such proceedings are without merit and except where failure to do so would not reasonably result in a Material Adverse Effect. Not allow any Material IP to be abandoned, forfeited or dedicated to the public without Agent’s written consent.

(b) If any Loan Party (i) obtains any Patent, registered Trademark, registered Copyright (other than Copyrights with respect to periodic publications and articles published in the Ordinary Course of Business) with the United States Patent and Trademark Office or the United States Copyright Office, or any pending application for any of the foregoing, whether as owner or exclusive licensee, or (ii) applies for any Patent, Trademark or Copyright with the United States Patent and Trademark Office or the United States Copyright Office, then Borrower Representative shall provide written notice thereof to Agent in the time frames set forth in the Security Agreement and shall execute such intellectual property security agreements and other documents and take such other actions as Agent may request to perfect and maintain a first priority perfected security interest in favor of Agent in such property; provided, for the avoidance of doubt, no action will be required to be made in any jurisdiction outside of the United States.

(c) Provide written notice to Agent within ten (10) days of any Loan Party entering or becoming bound by any Restricted License (other than off the shelf software and services that are commercially available to the public). Each Loan Party shall, and shall cause each other Subsidiary to, take such steps as Agent requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) such Restricted License to be deemed “Collateral” and for Agent to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Agent to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Agent’s right and remedies under this Agreement and the other Loan Documents.

6.8 Litigation Cooperation. From the Closing Date and continuing through the termination of this Agreement, make available to Agent and Lenders, without expense to Agent or Lenders, each Loan Party and its officers, employees and agents and each Loan Party’s books and records (excluding such information subject to confidentiality provisions binding on such Loan Party or attorney-client or similar privilege of such Loan Party), to the extent that Agent or any Lender may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Agent or any Lender with respect to any Collateral or relating to such Loan Party.

6.9 Access to Collateral; Books and Records. Allow Agent, or its agents, upon reasonable prior written notice and during regular business hours of the Loan Parties, to inspect the Collateral and audit and copy such Loan Party’s Books in accordance with Section 6.13. Such inspections or audits shall be conducted no more often than once every six (6) months unless an Event of Default has occurred and is continuing in which case such inspections and audits shall occur as often as Agent shall determine is necessary. No more than one such inspection or audit in any twelve (12) month period shall be at Borrowers’ expense, provided that the foregoing limitation on frequency of audits shall cease to apply when an Event of Default is continuing.

 

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6.10 Financial Covenants.

(a) Liquidity. Maintain at all times unrestricted cash and Cash Equivalents in a Deposit Account or Securities Account subject to a first priority perfected lien in favor of Agent in an amount not less than $15,000,000, provided that compliance shall be required to be certified monthly upon delivery of the Compliance Certificate.

(b) Minimum Adjusted EBITDA. Achieve minimum Adjusted EBITDA for the consecutive twelve (12) month period ended September 30, 2024, and the last day of each twelve (12) month period ended as of each fiscal quarter thereafter, of at least $10,000,000, tested on the last day of each fiscal quarter.

(c) Minimum Quarterly Average ARR. Borrowers shall achieve Quarterly Average ARR in an amount not less than the amount set forth on Schedule 6.10(c) hereto, tested on the last day of each fiscal quarter.

6.11 Joinder of Subsidiaries.

(a) Upon the formation or acquisition of any direct or indirect Subsidiary by a Loan Party or any of its Subsidiaries after the Restatement Date, or at any time upon Agent’s request with respect to any Subsidiary whether existing as of the Restatement Date or thereafter created or acquired: (i) promptly, and in any event within ten (10) days of creation, acquisition or request, as applicable (or such longer period as agreed by Agent in its sole discretion), provide written notice of such new Subsidiary to Agent, (ii) to the extent such Subsidiary is required to be joined as a Loan Party in accordance with Section 6.11(b), promptly, and in any event within thirty (30) days of formation or creation (or such longer period as agreed by Agent in its sole discretion): (A) take all such action as may be reasonably required by Agent to cause the applicable Subsidiary to either: (x) provide to Agent a joinder to this Agreement pursuant to which such Subsidiary becomes a Borrower hereunder, or (y) guarantee the Obligations of Borrowers under the Loan Documents, and (B) grant a security interest in and to the collateral of such Subsidiary (substantially consistent with the scope of the collateral security pursuant to the Security Agreement), in each case together with such Account Control Agreements and other documents, instruments and agreements reasonably requested by Agent, all in form and substance satisfactory to Agent (including being sufficient to grant Agent a first priority Lien, subject to Permitted Liens) in and to the assets of such Subsidiary and (iii) to pledge the Equity Interests in such Subsidiary to the extent required under the Loan Documents, provided that the foregoing shall not operate to require Foreign Subsidiaries to be joined as Loan Parties unless a joinder is required by Section 6.11(b). Any document, agreement, or instrument executed or issued pursuant to this Section 6.11 shall be a Loan Document.

(b) Loan Parties shall not permit Excluded Subsidiaries, in the aggregate to (i) maintain cash and other assets with an aggregate value for all such Subsidiaries in excess of 15% of consolidated assets of Holdings and its Subsidiaries, tested on the last day of each fiscal quarter, (ii) achieve revenue in excess of 15% of consolidated revenue of Holdings and its Subsidiaries, tested quarterly, for the twelve (12) month period then ended, or (iii) own any Intellectual Property which is Material IP, without, in each case, causing one or more of such Subsidiaries as determined by Agent and Required Lenders in consultation with Borrower Representative, to become a Loan Party and grant security as set forth in Section 6.11(a), so as to restore compliance with the foregoing limitations; provided that, subject to compliance with Section 7.13, in no event shall any Subsidiary be required to become a Loan Party and grant security if Required Lenders determine, following consultation in good faith with Borrower Representative, that such joinder and grant would result in a materially adverse tax consequence to the Loan Parties and their Subsidiaries as a whole.

6.12 Property Locations.

(a) Provide to Agent at least ten (10) days’ prior written notice before adding any new offices or business or Collateral locations, including warehouses (unless such new offices or business or Collateral locations qualify as Excluded Locations).

(b) With respect to any property or assets of a Loan Party located with a third party having a book value of greater than $250,000, including a bailee, datacenter or warehouse (other than Excluded Locations), Loan Parties shall use commercially reasonable efforts to cause such third party (which commercially reasonable efforts shall not include the payment of consideration or the modification of contractual terms adverse to any such Loan Party) to execute and deliver a Collateral Access Agreement for such location, including an acknowledgment from each of the third parties that it is holding or will hold such property for Agent’s benefit.

 

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(c) With respect to any property or assets of a Loan Party located on leased premises (other than Excluded Locations), Loan Parties shall use commercially reasonable efforts to cause such third party (which commercially reasonable efforts shall not include the payment of consideration or the modification of contractual terms adverse to any such Loan Party) to execute and deliver a Collateral Access Agreement for such location.

6.13 Management Rights. Any representative of Lenders shall have the right to meet with management and officers of Loan Parties to discuss such books of account and records, upon reasonable prior written notice and during business hours of the Loan Parties. Such consultations shall not unreasonably interfere with any Loan Party’s business operations.

6.14 Holdings, Parent and Intermediate Parent as Holding Company. Each Borrower will not permit Holdings, Parent or Intermediate Parent to incur any liabilities (other than liabilities arising under the Loan Documents, the Restatement Date Merger Agreement and certain Subordinated Debt), own or acquire any assets (other than the Equity Interests of Intermediate Parent and Holdings) or engage itself in any operations or business, except as described in Section 5.12, or in connection with its existence as a public company.

6.15 Further Assurances. Execute any further instruments and take further action as Agent reasonably requests to perfect or continue Agent’s Lien in the Collateral or to effect the purposes of this Agreement.

6.16 OFAC; Sanctions; Anti-Corruption Laws; Anti-Money Laundering Laws. Comply with all applicable Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws, and implement and maintain in effect policies and procedures reasonably designed to ensure compliance by the Loan Parties and their Subsidiaries with Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.

6.17 Disclosure Updates. Each Loan Party will, promptly and in no event later than five Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

7. NEGATIVE COVENANTS

No Loan Party shall, or shall cause or permit any of its Subsidiaries to, do any of the following:

7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”) all or any part of its business or property, except for Permitted Transfers.

7.2 Changes in Business, Management, or Ownership. (a) Engage in any business other than the businesses currently engaged in by such Person, as applicable, or reasonably related or incidental thereto or which constitutes a reasonable extension or expansion thereof; (b) cease doing business, or liquidate or dissolve, except as permitted under Section 7.3; (c) [Reserved]; (d) permit or suffer a Change of Control (other than any Change of Control resulting from the Restatement Date Transactions), or (e) without at least ten (10) days prior written notice to Agent with respect to any Loan Party, except with respect to the Restatement Date Transactions, (i) change its jurisdiction of organization, (ii) change its organizational structure or type, (iii) change its legal name, or (iv) change its organizational number (if any) assigned by its jurisdiction of organization.

7.3 Mergers or Acquisitions. Merge or consolidate with any other Person, or acquire all or substantially all of the capital stock or property of another Person or business line of another Person (including, without limitation, by the formation of any Subsidiary) or enter into an agreement with respect to the foregoing, except (i)

 

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Permitted Acquisitions, (ii) a merger or consolidation by a Subsidiary into another Subsidiary or into a Loan Party, provided that (x) in any merger or consolidation involving a Loan Party, such Loan Party shall always be the surviving entity, and in any transaction involving Holdings, Holdings shall be the surviving entity, (iii) with respect to entering into an agreement to merge, consolidate or acquire another Person, to the extent the Obligations will be repaid in full concurrently with the closing of such transaction, or (iv) with respect to entering into an agreement to merge, acquire assets or other similar transaction, to the extent the consent of the Lenders required hereby is a condition to the consummation of such transaction, and (y) no such merger or consolidation shall result in any Material IP being owned by any Person which is not a Loan Party organized in the United States (excluding Holdings), and (iii) the Restatement Date Merger.

7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, other than Permitted Indebtedness.

7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of its property except for Permitted Liens.

7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.6(b).

7.7 Distributions; Investments. (a) Pay any dividends or make any distribution or payment in respect of its Equity Interests or redeem, retire or purchase any of its Equity Interests provided that (i) Holdings may convert any of its convertible Equity Interests (including options and warrants) into other Equity Interests issued by Holdings pursuant to the terms of such convertible securities or otherwise in exchange thereof, including by way of cashless exercise; (ii) Holdings may convert Subordinated Debt issued by any Loan Party into Equity Interests issued by Holdings pursuant to the terms of such Subordinated Debt and to the extent permitted under the terms of the applicable subordination or intercreditor agreement with Agent; (iii) any Borrower or Subsidiary thereof may pay dividends solely in Equity Interests of such Borrower or Subsidiary, and any Subsidiary may pay cash distributions to a Loan Party; (iv) Holdings may make cash payments in lieu of fractional shares; (v) Holdings may repurchase the Equity Interests issued by Holdings pursuant to stock repurchase agreements approved by the Board, provided that the aggregate amount of all such repurchases does not exceed Five Hundred Thousand Dollars ($500,000) per fiscal year; (vi) any Subsidiary may make distributions or pay dividends to a Loan Party; (vii) Holdings may pay dividends or make distributions in the form of its Equity Interests (other than Disqualified Equity Interests) so long as no Change of Control results therefrom; and (viii) Holdings may make dividends not exceeding $250,000 in the aggregate during any fiscal year in the Ordinary Course of Business, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of Holdings and its Subsidiaries; or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary), other than Permitted Investments. Notwithstanding the foregoing, Loan Parties shall be permitted to make the repurchases pursuant to clause (v) above expressly permitted above only if, at such time, and immediately after giving effect thereto: (i) no Default or Event of Default, exists or could reasonably be expected to occur, (ii) each Loan Party is Solvent, and (iii) such payment or distribution is permitted under and is made in compliance with all applicable laws. For the avoidance of doubt, payments of (x) reasonable fees, salaries and other reasonable compensation, benefits and indemnification to officers of the Loan Parties and their Subsidiaries and (y) usual and customary fees, compensation and indemnifications paid to members of the Board of any Loan Party of Subsidiary that are approved by the compensation committee of the Board shall not be deemed to be payments in respect of Equity Interests.

7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any transaction involving one or more payments by any Loan Party or any of its Subsidiaries in excess of $1,000,000 for any single transaction or series or related transactions with any Affiliate of a Loan Party, except for (a) transactions that are on fair and reasonable terms that are no less favorable to such Person than would be obtained in an arm’s length transaction with a non-affiliated Person; (b) bona fide rounds of Subordinated Debt or equity financing by existing investors for capital raising purposes, in each case, as permitted under this Agreement and any accrual of interest to be paid-in-kind or any modifications of such Subordinated Debt or equity financing; (c) reasonable and customary director, officer and employee compensation, incentive arrangements (including pursuant to stock options and other benefit plans) and other customary benefits including retirement, health, stock option and other benefit plans and indemnification arrangements approved by the Board; (d) as disclosed on Schedule 7.8; (e) distributions permitted by Section 7.7; (f) transactions among Loan Parties and their wholly-owned Subsidiaries that are expressly permitted by

 

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the Loan Documents and expressly contemplated to be consummated among Loan Parties and Subsidiaries; (g) the issuance or sale of any Equity Interests of Holdings (and the exercise of any options, warrants or other rights to acquire Equity Interests of Holdings) or any contribution to the capital of Holdings; (h) Investments in joint ventures (to the extent any such joint venture is only an Affiliate as a result of Investments by Borrowers and their Subsidiaries in such joint ventures) to the extent otherwise permitted under Section 7.7; (i) other Investments permitted by Section 7.7; and (j) royalty-free non-exclusive licenses of any Loan Party or their Subsidiaries’ trademarks, trade names and business systems by the Loan Parties to Subsidiaries that are not Loan Parties in the Ordinary Course of Business to the extent not otherwise prohibited pursuant to the terms of the Loan Documents. Notwithstanding the foregoing, in no event shall this Section 7.8 apply to any Lender or Affiliate of any Lender with respect to payments required pursuant to this Agreement or any of the other Loan Documents. Notwithstanding anything to the contrary herein, in no event shall this Section 7.8 permit any transaction with any Affiliate of Holdings or any of its Subsidiaries (other than the Loan Parties organized within the United States (excluding Holdings)) relating to (i) any Material IP (for the avoidance of doubt, except for a Permitted License) or (ii) the Equity Interests of any Person that owns Material IP.

7.9 Subordinated Debt; Operating Documents.

(a) Make or permit any payment on any Subordinated Debt, except as permitted pursuant to the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject;

(b) Directly or indirectly amend, modify or change any provision in any document relating to the Subordinated Debt which would provide for earlier principal, interest or other payments thereon, or adversely affect the subordination thereof to the Obligations; or

(c) Make any payment in cash in respect of any earnout, seller note or otherwise in respect of Deferred Acquisition Consideration, except to the extent no Event of Default exists immediately prior to and after giving effect to such payment, and provided that after giving pro forma effect to such payment, Borrowers shall be in compliance with all financial covenants set forth in Section 6.10.

(d) Directly or indirectly amend, modify or change any provision in any Operating Document of any Loan Party of any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be adverse to the interest of Agent or the Lenders.

7.10 [Reserved]

7.11 Compliance. Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Loan for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a Material Adverse Effect; withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any material liability of a Loan Party or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

7.12 Accounting Methods. Each Loan Party will not, and will not permit any of its Subsidiaries to, modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).

7.13 Material IP. Notwithstanding anything herein to the contrary, (x) all Material IP shall be owned by a Loan Party (other than Holdings), and Borrower shall not, nor shall it permit any of its Subsidiaries to, enter into any transaction the result of which is the sale, assignment, investment, distribution, dividend, exclusive licensing, transfer or other disposition, of Material IP to any Person and (y) any Subsidiary that is not a Loan Party that develops or acquires Material IP shall promptly comply with the requirements of Section 6.11 as if such Subsidiary were newly formed or acquired by a Loan Party.

 

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8. EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

8.1 Payment Default. Any Loan Party fails to pay when due (i) any principal amount of the Loans payable hereunder or (ii) any interest, premium or fee or other Obligation payable hereunder within two (2) Business Days following the due date thereof.

8.2 Covenant Default.

(a) A Loan Parties fails or neglects to perform any obligation in Section 3.3(b), Section 6.2 (except for clauses (e), (h), (m), (n) or (o) thereof), Section 6.5, Section 6.6, Section 6.7(b) (solely with respect to Copyrights), Section 6.10, Section 6.11, Section 6.14, Section 6.16, or Section 6.17 or violates any covenant in Section 7; or

(b) A Loan Party fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within thirty (30) days after the occurrence thereof, provided that no Loans shall be made during such cure period.

8.3 Material Adverse Effect. An event or circumstance has occurred which could reasonably be expected to have a Material Adverse Effect.

8.4 Attachment; Levy; Restraint on Business.

(a) (i) The service of process seeking to attach, by trustee or similar process, funds in an amount of Three Million Dollars ($3,000,000) or greater of a Loan Party or of any of its Subsidiaries, or (ii) a notice of Lien or levy is filed against the assets of any Loan Party or any of its Subsidiaries with a book value of Three Million Dollars ($3,000,000) or greater by any Governmental Authority, and the same under clauses (i) and (ii) hereof are not, within sixty (60) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); or

(b) Any court order enjoins, restrains, or prevents a Loan Party or any of its Subsidiaries from conducting all or any material part of its business, and the same is not stayed or vacated (whether through the posting of a bond or otherwise) within sixty (60) days.

8.5 Insolvency. (a) A Loan Party or any of its Subsidiaries formally admits in writing its inability or shall fail generally to pay its debts as they become due; (b) a Loan Party or any of its Subsidiaries commences an Insolvency Proceeding; or (c) an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and is not dismissed or stayed within forty-five (45) days (but no Loans shall be made while any of the conditions described in this Section 8.5 exist and/or until any Insolvency Proceeding is dismissed).

8.6 Other Agreements. There is, under any agreement to which a Loan Party or any of its Subsidiaries is a party with a third party or parties, any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of Three Million Dollars ($3,000,000).

8.7 Judgments; Penalties. One or more fines, penalties or final judgments, orders or decrees for the payment of money (to the extent not paid or fully covered by insurance maintained in accordance with the requirements of this Agreement and as to which the relevant insurance company has not denied coverage) in an amount, individually or in the aggregate, of at least Three Million Dollars ($3,000,000) shall be rendered against a Loan Party or any of its Subsidiaries by any Governmental Authority, and the same are not, within thirty (30) consecutive days after the entry, assessment or issuance thereof, vacated, or after execution thereof, stayed or bonded pending appeal.

 

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8.8 Misrepresentations. Any Loan Party or any Person acting for such Loan Party makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Agent or any Lender or to induce any Lender to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made or deemed made.

8.9 Subordinated Debt. Any Subordination Agreement governing any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any party thereto shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further obligation thereunder, or the Obligations shall for any reason not have the priority contemplated by this Agreement.

8.10 Loan Documents; Security Documents.

(a) The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent or any Lender) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document; or

(b) if the Security Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, (except to the extent of Permitted Liens) first priority Lien on a material portion of the Collateral covered thereby, except as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement.

9. AGENT’S RIGHTS AND REMEDIES

9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Agent shall, upon the election by Required Lenders, without notice or demand, do any or all of the following:

(a) declare all Obligations immediately due and payable;

(b) stop advancing money or extending credit for any Borrower’s benefit under this Agreement;

(c) verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Agent considers advisable, and notify any Person owing a Loan Party money of Agent’s security interest in such funds;

(d) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral;

(e) ratably apply to the Obligations any amount held by Agent or any Lender owing to or for the credit or the account of a Loan Party;

(f) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral;

(g) deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Account Control Agreement or similar agreements providing control of any Collateral;

(h) demand and receive possession of any Loan Party’s Books; and

 

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(i) exercise all rights and remedies available to Agent under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).

The foregoing to the contrary notwithstanding, upon the occurrence and continuance of any Event of Default described in Section 8.5, in addition to the remedies set forth above, without any notice to Borrowers or any other Person or any act by Agent or any Lender, the Obligations, inclusive of the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations, whether evidenced by this Agreement or by any of the other Loan Documents, shall automatically become and be immediately due and payable and Borrowers shall automatically be obligated to repay all of such Obligations in full, without presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived by Holdings and Borrowers.

Loan Parties shall assemble the Collateral if Agent requests and make it available as Agent designates. Agent may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Each Loan Party grants Agent a license to enter and occupy any of its premises, without charge, to exercise any of Agent’s rights or remedies. Agent is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, any Loan Party’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Agent’s exercise of its rights under this Section, each Loan Party’s rights under all licenses and all franchise agreements inure to Agent’s benefit. Each of the foregoing in this paragraph is applicable solely upon the occurrence and during the continuance of an Event of Default.

9.2 Power of Attorney. Each Loan Party hereby irrevocably appoints Agent (and any of Agent’s partners, managers, officers, agents or employees) as its lawful attorney-in-fact, with full power of substitution, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) send requests for verification of Accounts or notify Account Debtors of Agent’s security interest and Liens in the Collateral; (b) endorse such Loan Party’s name on any checks or other forms of payment or security; (c) sign such Loan Party’s name on any invoice or bill of lading for any Account or drafts against Account Debtors schedules and assignments of Accounts, verifications of Accounts, and notices to Account Debtors; (d) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Agent determines reasonable; (e) make, settle, and adjust all claims under such Loan Party’s insurance policies; (f) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; (g) transfer the Collateral into the name of Agent or a third party as the Code permits; and (h) dispose of the Collateral. Each Loan Party further hereby appoints Agent (and any of Agent’s partners, managers, officers, agents or employees) as its lawful attorney-in-fact, with full power of substitution, regardless of whether or not an Event of Default has occurred or is continuing to: (i) sign such Loan Party’s name on any documents and other Security Instruments necessary to perfect or continue the perfection of, or maintain the priority of, Agent’s security interest in the Collateral, (ii) take all such actions which such Loan Party is required, but fails to do under the covenants and provisions of the Loan Documents and (iii) take any and all such actions as Agent may reasonably determine to be necessary or advisable for the purpose of maintaining, preserving or protecting the Collateral or any of the rights, remedies, powers or privileges of Agent under this Agreement or the other Loan Documents. Agent’s foregoing appointment as each Loan Party’s attorney in fact, and all of Agent’s rights and powers, coupled with an interest, are irrevocable until all Obligations (other than contingent indemnification obligations as to which no claim has been asserted or is known to exist) have been fully repaid, in cash, and otherwise fully performed and all commitments to make Loans hereunder have been terminated.

9.3 Protective Advances. Agent hereby is authorized by Borrowers, from time to time, at the direction of Required Lenders, to make Loans to, or for the benefit of, Borrowers, on behalf of the Lenders, that Required Lenders, in their reasonable discretion, deem necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations, including Loans to obtain the insurance called for by Section 6.5 that any Loan Party fails to obtain, to pay any premium thereon that any Loan Party fails to make, or any other amount which any Loan Party is obligated to pay under this Agreement or any other Loan Document and which is not otherwise paid by such Loan Party (such Loans, “Protective Advances”), and all such Protective Advances shall be reimbursed by Lenders in accordance with each Lender’s Pro Rata Share, shall

 

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constitute Lender Expenses, constitute Obligations hereunder and shall be immediately due and payable, bearing interest at the then highest rate applicable to the Term Loans, secured by the Collateral. Agent will provide Borrower Representative with prompt notice of Agent making any such Protective Advance at the time it is made or within a reasonable time thereafter. Agent may in its discretion require each Lender’s Pro Rata Share of a Protective Advance approved by Required Lenders to be contributed prior to Agent making such Protective Advance. No Protective Advances by Agent are deemed a commitment or an agreement to make Protective Advances in the future or Agent’s waiver of any Event of Default. Agent’s authorization to make the Protective Advances may be revoked at any time by the Required Lenders delivering written notice of such revocation to Agent. Any such revocation shall become effective prospectively upon Agent’s receipt thereof. Notwithstanding the foregoing, unless otherwise agreed by the Required Lenders, the aggregate amount of all amounts owing in respect of the Protective Advances outstanding at any one time shall not exceed $2,000,000. The provisions of this Section 9.3 are for the exclusive benefit of Agent and the Lenders and are not intended to benefit Borrowers (or any other Loan Party) in any way.

9.4 Application of Payments and Proceeds Upon Default.

(a) If an Event of Default has occurred and is continuing, Agent shall apply any funds in its possession, whether payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations as:

(i) first, to pay any Lender Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents, until paid in full,

(ii) second, to pay any fees then due to Agent under the Loan Documents until paid in full,

(iii) third, ratably to pay any Lender Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid in full,

(iv) fourth, ratably to pay any fees then due to any of the Lenders under the Loan Documents until paid in full,

(v) fifth, ratably, to pay interest accrued in respect of the Term Loans until paid in full,

(vi) sixth, ratably to pay the outstanding principal balance of the Term Loans (inclusive of any PIK Amount) (in the inverse order of the maturity of the installments due thereunder) until the Term Loans are paid in full, and

(vii) seventh, to pay any other Obligations owed to any Lender.

In carrying out the foregoing, (a) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category, and (b) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its Pro Rata Share of amounts available to be applied pursuant thereto for such category.

(b) Agent shall pay any surplus to Loan Parties by credit to the Deposit Account designated by Loan Parties or to such other Persons legally entitled thereto. Loan Parties shall remain liable to Agent and Lenders for any deficiency.

9.5 Agent’s Liability for Collateral. So long as Agent complies with reasonable secured lender practices regarding the safekeeping of the Collateral in the possession or under the control of Agent, Agent shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Loan Parties shall otherwise bear all risk of loss, damage or destruction of the Collateral.

 

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9.6 No Waiver; Remedies Cumulative. Any failure by Agent or any Lender, at any time or times, to require strict performance by each Loan Party of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Agent or Lenders thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given. Agent and Lenders’ rights and remedies under this Agreement and the other Loan Documents are cumulative. Agent has all rights and remedies provided under the Code, by law, or in equity. Agent or any Lender’s exercise of one right or remedy is not an election and shall not preclude Agent or any Lender from exercising any other remedy under this Agreement or other remedy available at law or in equity, and any waiver of any Event of Default is not a continuing waiver. Any delay in exercising any remedy is not a waiver, election, or acquiescence.

9.7 Demand Waiver. Each Loan Party waives presentment, demand, notice of default or dishonor, notice of payment and nonpayment, release, compromise, settlement, extension, or renewal of accounts, documents, instruments or chattel paper.

9.8 Shares. Each Loan Party recognizes that Agent may be unable to effect a public sale of any or all the Shares, by reason of certain prohibitions contained in federal securities laws and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Loan Party acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Agent shall be under no obligation to delay a sale of any of the Shares for the period of time necessary to permit the issuer thereof to register such securities for public sale under federal securities laws or under applicable state securities laws, even if such issuer would agree to do so.

10. NOTICES

All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document shall be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) when sent by electronic mail transmission, (x) if sent prior to 3:00 p.m. Eastern Time on a Business Day, such Business Day, or (y) if sent after 3:00 p.m. Eastern Time on a Business Day or sent on a day other than a Business Day, the immediately following Business Day; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, or email address indicated below. Agent and Loan Parties may change their respective mailing or electronic mail addresses by giving the other party written notice thereof in accordance with the terms of this Section 10.

 

  If to Loan Parties:   

FiscalNote, Inc.

1201 Pennsylvania Ave NW, 6th Floor

Washington, DC 20004

Attention: Josh Resnik—Senior Vice

President, Chief Content

Officer/Publisher and General Counsel

Email: josh.resnik@fiscalnote.com

           With a copy, not constituting notice, to:   

Paul Hastings LLP

2050 M Street NW

Washington, DC 20036

Attn: Brandon Bortner

Email: brandonbortner@paulhastings.com

 

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  If to Agent:   

Runway Growth Finance Corp.

205 N Michigan Ave., Suite 4200

Chicago, IL 60601

Attention: Legal Reporting

Email:

legalreporting@runwaygrowth.com

runwayagency@alterdomus.com

  With a copy, not constituting notice, to:   

Sidley Austin LLP

1001 Page Mill Road Building 1

Palo Alto, CA 94304

Attn: Cynthia Bai

Email: cbai@sidley.com

  If to any Lender:    See Schedule 1, Part D

11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

Except as otherwise expressly provided in any of the Loan Documents, this Agreement and the other Loan Documents, and any claims, controversies or disputes arising hereunder or thereunder or related hereto or thereto, shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law. Each Loan Party hereby submits to the exclusive jurisdiction of the State and Federal courts in New York County, City of New York, New York; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Agent from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Agent or any Lender; provided, further, however, that it is understood and agreed that (a) the interpretation of the definition of “Company Material Adverse Effect” (as defined in the Restatement Date Merger Agreement) (and whether or not a Company Material Adverse Effect (as defined Restatement Date Merger Agreement) has occurred), (b) the determination of the accuracy of any Specified Merger Agreement Representation and whether as a result of any breach thereof Holdings or its applicable Affiliate has the right (taking into account any applicable cure periods) to terminate its or their obligations under the Restatement Date Merger Agreement or decline to consummate the Restatement Date Merger (in accordance with the terms thereof) as a result of a breach of such representations in the Restatement Date Merger Agreement without any liability to its or its applicable Affiliate and (c) the determination of whether the Restatement Date Merger has been consummated in accordance with the terms of the Restatement Date Merger Agreement, in each case shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof. Each Loan Party expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each Loan Party hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Each Loan Party hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to such Loan Party at the address set forth in, or subsequently provided by such Loan Party in accordance with, Section 10 and that service so made shall be deemed completed upon the earlier to occur of the applicable Loan Party’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid. Each Loan Party hereby expressly waives any claim to assert that the laws of any other jurisdiction govern this Agreement.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, EACH LOAN PARTY AGREES THAT IT SHALL NOT SEEK FROM AGENT OR ANY LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY

 

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THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

This Section 11 shall survive the termination of this Agreement.

12. GENERAL PROVISIONS

12.1 Termination Prior to Term Loan Maturity Date; Survival. All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than contingent indemnification obligations as to which no claim has been asserted or is known to exist and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied in full, in cash and all commitments to extend credit pursuant to this Agreement have terminated. So long as Borrowers have satisfied the Obligations (other than contingent indemnification obligations as to which no claim has been asserted or is known to exist and any other obligations which, by their terms, are to survive the termination of this Agreement), this Agreement and any remaining commitments to extend credit may be terminated prior to the Term Loan Maturity Date, by written notice from Borrower Representative of termination to Agent (whereupon Agent shall promptly provide a copy of such notice to Lenders). Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination.

12.2 Successors and Assigns.

(a) Successors and Assigns Generally. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. No Loan Party may assign this Agreement or any rights or obligations under it without the prior written consent of all Lenders (which may be granted or withheld in each Lender’s discretion).

(b) Assignments by Lenders. Each Lender has the right, with the prior consent of the Borrower Representative (such consent not to be unreasonably withheld or delayed), to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, such Lender’s obligations, rights, and benefits under this Agreement and the other Loan Documents, provided that no consent of the Borrower Representative is required for such assignment, transfer other such action by any Lender (i) to or with another Lender, one or more of its Affiliates or an Approved Fund or (ii) after the occurrence and during the continuance of an Event of Default.

(c) Minimum Amounts.

(i) In the case of an assignment of the Loans at the time owing to it or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in Section 12.2(c)(ii) in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(ii) In any case not described in Section 12.2(c)(i), the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment Agreement with respect to such assignment is delivered to Agent) shall not be less than $1,000,000.

(d) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan assigned.

(e) Required Consents. The consent of Agent and, so long as no Event of Default has occurred and is continuing, Borrower Representative (such consents not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund, provided that the consent of Borrower Representative shall be deemed given if no objection is delivered in writing within 10 days of written request duly received by Agent with respect to such assignment.

 

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(f) Assignment Agreement. The parties to each assignment shall execute and deliver to Agent an Assignment Agreement, together with a processing and recordation fee of $3,500; provided that Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to Agent an administrative questionnaire, all required tax forms and any and all documentation and other information with respect to the assignee that is required by regulatory authorities under applicable anti-money-laundering laws.

(g) No Assignment to Certain Persons. No such assignment shall be made to (A) any Loan Party or any of its Affiliates or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

(h) No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).

(i) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or sub-participations, or other compensating actions, including funding, with the consent of Borrowers and Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to Agent and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Pro Rata Share thereof. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(j) Register; Participant Register.

(i) Agent, acting solely for this purpose as a non-fiduciary agent of Borrowers, shall maintain at one of its offices a copy of each Assignment Agreement delivered to it and a register for the recordation of the names and addresses of Lenders, the principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and Borrowers, Agent and Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior written notice.

(ii) Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Borrowers, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.

12.3 Indemnification. Each Loan Party agrees to indemnify, defend and hold Agent and each Lender and their respective directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Lender (each, an “Indemnified Person”) harmless against: (i) all obligations, demands, claims, and liabilities

 

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(including such claims, costs, expenses, damages and liabilities based on liability in tort, including strict liability in tort) (collectively, “Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Lender Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions among Agent, Lenders and Loan Parties (including reasonable and documented attorneys’ fees and expenses), except for Claims and/or losses to the extent directly caused by such Indemnified Person’s gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction. Each Loan Party agrees to pay, and to save Agent and each Lender harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or measured by the net income of Agent or Lender) that may be payable or determined to be payable with respect to any of the Collateral or this Agreement. This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run. This Section 12.3 shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

12.4 Borrower Liability. Each Borrower hereunder shall be jointly and severally obligated to repay all Loans made hereunder, regardless of which Borrower actually receives said Loan, as if each Borrower hereunder directly received all Loans. Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, and (b) any right to require Agent to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Agent may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability. If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due, whether upon maturity, acceleration, or otherwise, or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligations until such time as all of the Obligations are paid in full, and without the need for demand, protest, or any other notice or formality. The Obligations of each Borrower under the provisions of this Section 12.4 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of the provisions of this Agreement (other than this Section 12.4) or any other circumstances whatsoever. Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Agent under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by such Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Lenders and such payment shall be promptly delivered to Agent, for the ratable benefit of Lenders, for application to the Obligations, whether matured or unmatured.

12.5 Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.

12.6 Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.

12.7 Correction of Loan Documents. Agent may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties.

12.8 Amendments in Writing; Waiver; Integration.

(a) No purported amendment or modification of any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by each Borrower and the Required Lenders;

provided that no such waiver, amendment, or consent shall, unless in writing and signed by all Lenders directly affected thereby and all of the Loan Parties that are party thereto, do any of the following:

 

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(i) increase the amount of or extend the expiration date of any commitment to extend credit on the part of any Lender,

(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,

(iii) reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document,

(iv) change the Pro Rata Share that is required to take any action hereunder,

(v) amend, modify, or eliminate this Section or any provision of this Agreement providing for consent or other action by all Lenders,

(vi) other than as expressly permitted by this Agreement or any other Loan Document, release Agent’s Lien in and to any of the Collateral,

(vii) amend, modify, or eliminate the definitions of “Required Lenders” or “Pro Rata Share”,

(viii) modify the application of repayments or prepayments or proceeds of Collateral,

(ix) add any fees payable to any Lender that are payable other than to each Lender according to its Pro Rata Share in the applicable Commitment, other than normal and customary fees payable to Agent in its capacity as such, or to a Lender that is a Non-Consenting Lender (and for purposes of an amendment as described in this clause (ix), each Lender other than a Defaulting Lender shall be considered directly affected by such amendment);

(x) contractually subordinate the Obligations or any of Agent’s Liens (other than to the extent subordination terms are included in an Account Control Agreement with respect to Liens described in clause (j) of the defined term “Permitted Liens”);

(xi) other than in connection with a merger, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,

(xii) amend, modify, or eliminate any of the provisions of Section 2.5(b), Section 2.5(f), or Section 9.4(a), or any other provision in any Loan Document related to the pro rata sharing of payments among Lenders; or

(xiii) amend, modify, or eliminate the definitions of the Restatement Date Incremental Term Loan Commitment or any other Commitment;

provided further, that as long as each such Initial Lender holds at least 50% of its respective original Restatement Date Incremental Term Loan Commitment, all Initial Lenders consent shall be required to: (i) waive Major Defaults, (ii) approve material amendments to negative covenants (where changes to baskets or thresholds of up to 20% compared to levels effective as of the Restatement Date, shall not be deemed to be “material”), and (iii) approve additional Incremental Term Loans (but only to the extent each Initial Lender is not participating to the extent of its Pro Rata Share)

 

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(b) Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on any Loan Document. Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver. The Loan Documents, and the provisions of the Restatement Date Commitment Letter and the Restatement Date Fee Letter that, by their terms survive the termination thereof or the Restatement Date, represent the entire agreement about this subject matter and supersede prior negotiations or agreements. Except as set forth in the foregoing, all prior agreements, understandings, representations, warranties, and negotiations among the parties about the subject matter of the Loan Documents merge into the Loan Documents.

(c) If, in connection with any proposed amendment, waiver or consent hereunder, the consent of all Lenders or all Initial Lenders is required, but only the consent of Required Lenders is obtained, (any Lender withholding consent being referred to as a “Non-Consenting Lender”), then, either Borrower Representative so long as Agent is not the Non-Consenting Lender, Agent or Borrower Representative may (but neither shall be obligated to) upon notice to the Non-Consenting Lender (and Agent, if applicable), require the Non-Consenting Lender to assign and delegate, without recourse (in accordance with the restrictions contained in Section 12.2 hereof) all of its interests, rights and obligations under this Agreement to an Eligible Transferee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that such Non-Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees (except for the fees required to be paid by Borrowers) and all other amounts payable to it hereunder from such Eligible Transferee, and Borrowers hereby agree to pay, upon such transfer, all Prepayment Fees and such Non-Consenting Lender’s Pro Rata Share of any Restatement Date Final Payment.

12.9 Counterparts; Electronic Execution of Documents. This Agreement and any other Loan Documents, except to the extent otherwise required pursuant to the terms thereof, may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement. The words “execution,” “signed,” “signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act. Delivery of an executed counterpart of a signature page of any Loan Document by electronic means including by email delivery of a “.pdf” format data file shall be effective as delivery of an original executed counterpart of such Loan Document.

12.10 Confidentiality. In handling any confidential information, Agent and each Lender agree to exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to its Subsidiaries or Affiliates; (b) to existing or prospective transferees or purchasers of any interest in the Loans so long as such persons are informed of the confidential nature of such information, instructed to keep such information confidential and bound by confidentiality terms not more permissive than the terms hereof; (c) as required by law, regulation, subpoena, or other order and in connection with reporting obligations applicable to Agent or Lender, including pursuant to the Securities Exchange Act of 1934, as amended (in each case, Agent or the Lenders agree, to the extent practicable and not prohibited by applicable requirement of law, to inform the Borrower Representative promptly thereof prior to such disclosure); (d) to Agent or Lender’s regulators or as otherwise required in connection with any examination or audit; (e) as Agent or Lender considers appropriate in connection with the exercise of remedies with respect to the Obligations; and (f) to third-party service providers of Agent or Lenders so long as such service providers are informed of the confidential nature of such information, instructed to keep such information confidential and bound by confidentiality terms not more permissive than the terms hereof. Confidential information does not include information that is either: (i) in the public domain or in Agent or any Lender’s possession when disclosed to Agent or Lender, as applicable, or becomes part of the public domain (other than as a result of its disclosure by Agent or Lender in violation of this Agreement) after disclosure to Agent or Lender, as applicable; or (ii) disclosed to Agent or Lender by a third party, if Agent or Lender, as applicable, does not know that the third party is prohibited from disclosing the information. The provisions of this paragraph shall survive the termination of this Agreement.

 

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12.11 Borrower Representative. Each of the Loan Parties hereby appoints Borrower Representative to act as its exclusive agent for all purposes under the Loan Documents (including, without limitation, with respect to all matters related to the borrowing and repayment of any Loan). Each Loan Party acknowledges and agrees that (a) Borrower Representative may execute such documents on behalf of any Loan Party as Borrower Representative deems appropriate in its sole discretion and each Loan Party shall be bound by and obligated by all of the terms of any such document executed by Borrower Representative on its behalf, (b) any notice or other communication delivered hereunder to Borrower Representative shall be deemed to have been delivered to each Loan Party, and (c) Agent and any Lender shall accept (and shall be permitted to rely on) any document or agreement executed by Borrower Representative on behalf of Loan Parties (or any of them). Each Loan Party shall act through Borrower Representative for all purposes under this Agreement and the other Loan Documents. Notwithstanding anything contained herein to the contrary, to the extent any provision in this Agreement requires any Loan Party to interact in any manner with Agent or any Lender, such Loan Party shall do so through Borrower Representative.

12.12 [Reserved]

12.13 Captions. The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.

12.14 Construction of Agreement. The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist.

12.15 Relationship. The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement. The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an arm’s-length contract.

12.16 Third Parties. Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any party to this Agreement.

12.17 Appointment of Agent.

(a) Each Lender hereby appoints Agent to act on behalf of Lenders as administrative agent and collateral agent under this Agreement and the other Loan Documents, and to hold and enforce any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations. The provisions of this Section 12.17 are solely for the benefit of Agent and Lenders and no Loan Party nor any other Person shall have any rights as a third party beneficiary of any of the provisions hereof. In performing its functions and duties under this Agreement, Agent does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for any Loan Party or any other Person. Agent shall not have any duties or responsibilities except for those expressly set forth in this Agreement and the other Loan Documents, together with such powers as are reasonably related thereto. The duties of Agent shall be mechanical and administrative in nature and Agent shall not have, or be deemed to have, by reason of this Agreement, any other Loan Document or otherwise a fiduciary relationship in respect of any Lender.

(b) If Agent shall request instructions from Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Loan Document, then Agent shall be entitled to refrain from such act or taking such action unless and until it shall have received instructions from Lenders, and Agent shall incur no liability to any Person by reason of so refraining. Agent shall be fully justified in failing or refusing to take any action hereunder or under any other Loan Document for any reason. Without limiting the foregoing, no Lender shall have any right of action whatsoever against Agent as a result of Agent’s acting or refraining from acting hereunder or under any other Loan Document in accordance with the instructions of Lenders.

 

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(c) Agent may perform any and all of its duties and exercise its rights and powers hereunder by or through any one or more sub-agents appointed by Agent. Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective and their respective related parties. The exculpatory provisions of this Section 12 shall apply to any such sub-agent and to the related parties of such Agent and any such sub-agent. No Agent shall be responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

(d) Neither Agent nor any of its Affiliates nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or the other Loan Documents, except for damages solely caused by its or their own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Without limitation of the generality of the foregoing, Agent: (i) may consult with legal counsel, independent chartered accountants and other experts and consultants selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants, experts or consultants; (ii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations made in or in connection with this Agreement or the other Loan Documents; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the other Loan Documents on the part of any Loan Party or to inspect the Collateral (including the books and records) of any Loan Party; (iv) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; and (v) shall incur no liability under or in respect of this Agreement or the other Loan Documents by acting upon any notice, consent, certificate or other instrument or writing (which may be by email, telecopy, telegram, cable or telex) believed by it to be genuine and signed or sent by the proper party or parties.

(e) With respect to its Loans hereunder, Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any other Lender and may exercise the same as though it were not Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include Agent in its individual capacity (to the extent it holds any Obligations owing to Lenders hereunder). Agent and each of its Affiliates may lend money to, invest in, and generally engage in any kind of business with, any Loan Party, any of their Affiliates and any Person who may do business with or own securities of any Loan Party or any such Affiliate, all as if Agent was not Agent and without any duty to account therefor to Lenders. Agent and its Affiliates may accept fees and other consideration from any Loan Party for services in connection with this Agreement or otherwise without having to account for the same to Lenders.

(f) Each Lender acknowledges that it has, independently and without reliance upon Agent or any other Lender, made its own credit and financial analysis of the Loan Parties and its own decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement. Each Lender acknowledges the potential conflict of interest of each other Lender as a result of Lenders holding disproportionate interests in the Loans, and expressly consents to, and waives any claim based upon, such conflict of interest.

(g) Each Lender agrees to indemnify Agent (to the extent not reimbursed by Loan Parties and without limiting the obligations of Loan Parties hereunder), ratably according to its respective Pro Rata Share, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against Agent in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted by Agent in connection therewith; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from Agent’s gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Without limiting the foregoing, each Lender agrees to reimburse Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including reasonable and documented counsel fees) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement and each other Loan Document, to the extent that Agent is not reimbursed for such expenses by the Loan Parties.

 

 

36


(h) Agent may resign at any time by giving not less than thirty (30) days’ prior written notice thereof to Lenders and Borrowers. Upon any such resignation, Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by Lenders and shall have accepted such appointment within thirty (30) days after Agent’s giving notice of resignation, then Agent may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender, if a Lender is willing to accept such appointment, or otherwise shall be a commercial bank or financial institution or a subsidiary of a commercial bank or financial institution if such commercial bank or financial institution has combined capital of at least $300,000,000. If no successor Agent has been appointed pursuant to the foregoing, by the 30th day after the date such notice of resignation was given by the resigning Agent, such resignation shall become effective and Lenders shall thereafter perform all the duties of Agent hereunder until such time, if any, as Lenders appoint a successor Agent as provided above. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall succeed to and become vested with all the rights, powers, privileges and duties of the resigning Agent. Upon the earlier of the acceptance of any appointment as Agent hereunder by a successor Agent or the effective date of the resigning Agent’s resignation, the resigning Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents, except that any indemnity, expense reimbursement or other rights in favor of such resigning Agent shall continue. After any resigning Agent’s resignation hereunder, the provisions of this Section 12.17 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement and the other Loan Documents.

(i) In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence and during the continuance of any Event of Default, with the prior written consent of Agent, each Lender and each holder of any Obligation is hereby authorized at any time or from time to time, without notice to any Loan Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all balances held by it at any of its offices for the account of any Loan Party or any Subsidiary of a Loan Party (regardless of whether such balances are then due to such Loan Party or such Subsidiary) and any other properties or assets any time held or owing by that Lender or that holder to or for the credit or for the account of any Loan Party or any Subsidiary of a Loan Party against and on account of any of the Obligations which are not paid when due. Any Lender or holder of any Obligation exercising a right to set off or otherwise receiving any payment on account of the Obligations in excess of its Pro Rata Share thereof in accordance with the terms of this Agreement relating to the priority of the repayment of the Obligations shall purchase for cash (and the other Lenders or holders shall sell) such participations in each such other Lender’s or holder’s Pro Rata Share of the Obligations as would be necessary to cause such Lender to share the amount so set off or otherwise received with each other Lender or holder in accordance with their respective Pro Rata Shares and in accordance with the terms of this Agreement relating to the priority of the repayment of the Obligations. Each Loan Party agrees, to the fullest extent permitted by law, that (i) any Lender or holder may exercise its right to set off with respect to amounts in excess of its Pro Rata Share of the Obligations and may sell participations in such amount so set off to other Lenders and holders and (ii) any Lender or holders so purchasing a participation in the Loans made or other Obligations held by other Lenders or holders may exercise all rights of set-off, bankers’ Lien, counterclaim or similar rights with respect to such participation as fully as if such Lender or holder were a direct holder of the Loans and the other Obligations in the amount of such participation. Notwithstanding the foregoing, if all or any portion of the set-off amount or payment otherwise received is thereafter recovered from Lender that has exercised the right of set-off, the purchase of participations by that Lender shall be rescinded and the purchase price restored without interest.

(j) Nothing in this Agreement or the other Loan Documents shall be deemed to require Agent to advance funds on behalf of any Lender or to prejudice any rights that Borrowers may have against any Lender as a result of any default by such Lender hereunder. To the extent that Agent advances funds to Borrowers on behalf of any Lender and is not reimbursed therefor on the same Business Day as such advance is made, Agent shall be entitled to retain for its account all interest accrued on such advance until reimbursed by the applicable Lender.

(k) If Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by Agent from Borrowers and such related payment is not received thereby, then Agent will be entitled to recover such amount from such Lender on demand without set-off, counterclaim or deduction of any kind.

 

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(l) If Agent determines at any time that any amount received thereby under this Agreement shall be returned to Borrowers or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition of this Agreement or any other Loan Document, Agent will not be required to distribute any portion thereof to any Lender. In addition, each Lender will repay to Agent on demand any portion of such amount that Agent has distributed to such Lender, together with interest at such rate, if any, as Agent is required to pay to Borrowers or such other Person, without set-off, counterclaim or deduction of any kind.

(m) Agent shall be deemed to have no knowledge of any Event of Default unless such Agent shall have received written notice thereof from a Lender or a Loan Party stating that it is a “notice of Default” and an Event of Default has occurred. Agent will use reasonable efforts to provide Lenders with any written notice of Event of Default received by Agent from, or delivered by Agent to, any Loan Party; provided, however, that Agent shall not be liable to any Lender for any failure to do so, except to the extent that such failure is attributable solely to Agent’s gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.

(n) Anything in this Agreement or any other Loan Document to the contrary notwithstanding, each Lender hereby agrees with each other Lender and with Agent that no Lender shall take any action to protect or enforce its rights with respect to any Collateral or against any Borrower arising out of this Agreement or any other Loan Document (including exercising any rights of set-off) without first obtaining the prior written consent of Agent, it being the intent of Lenders that any such action to protect or enforce rights with respect to any Collateral or against any Borrower arising under this Agreement and the other Loan Documents shall be taken by Agent at the direction of Required Lenders.

(o) Anything herein to the contrary notwithstanding, the joint lead arrangers and joint bookrunners, set forth above, shall have no powers, duties or responsibilities under this Agreement or any of the other Loan Documents.

13. GUARANTY

13.1 Guaranty. Each Guarantor who has executed this Agreement as of the date hereof, together with each Loan Party who accedes to this Agreement as a Guarantor after the date hereof pursuant to Section 6.11 hereby, jointly and severally, unconditionally and irrevocably, guarantees to Agent and Lenders the prompt and complete payment and performance by Borrowers and the other Loan Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations. In furtherance of the foregoing, and without limiting the generality thereof, each Guarantor agrees as follows:

(a) each Guarantor’s liability hereunder shall be the immediate, direct, and primary obligation of such Guarantor and shall not be contingent upon any exercise or enforcement of any remedy it or they may have against a Borrower, or any other Guarantor or other Person liable in respect of the Obligations, or all or any portion of the Collateral; and

(b) Agent and Lenders may enforce this guaranty notwithstanding the existence of any dispute between Agent or any Lender and a Borrower or any other Guarantor with respect to the existence of any Event of Default.

13.2 Maximum Liability. Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 13.5).

13.3 Termination. The guaranty pursuant to this Section 13 shall remain in full force and effect until the payment in full in cash of the Obligations and the termination of any commitment to extend credit hereunder (the “Termination Date”).

13.4 Unconditional Nature of Guaranty. No payment made by a Loan Party or any other Person or received or collected by Agent or any Lender from a Loan Party or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Termination Date.

 

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13.5 Right of Contribution. If in connection with any payment made by any Guarantor hereunder any rights of contribution arise in favor of such Guarantor against one or more other Guarantors, such rights of contribution shall be subject to the terms and conditions of Section 13.6. The provisions of this Section 13.5 shall in no respect limit the obligations and liabilities of any Guarantor to Agent and Lenders, and each Guarantor shall remain liable to Agent and Lenders for the full amount guaranteed by such Guarantor hereunder.

13.6 No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of Agent or any Lender against a Loan Party or any collateral security or guarantee or right of offset held by Agent or such Lender for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from a Loan Party in respect of payments made by such Guarantor hereunder, in each case, until the Termination Date. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time prior to the Termination Date, such amount shall be held by such Guarantor in trust for Agent or Lender, as applicable, shall be segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to Agent or such Lender, as applicable, in the exact form received by such Guarantor (duly indorsed by such Guarantor to Agent or such Lender, as applicable, if required), to be applied to the Obligations, irrespective of the occurrence or the continuance of any Event of Default.

13.7 Amendments, etc. with respect to the Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Obligations made by Agent may be rescinded by Agent and any of the Obligations continued, and the Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Agent, and this Agreement, the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, in accordance with their respective terms, and any collateral security, guarantee or right of offset at any time held by Agent or Lender for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Agent shall have no obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for the guarantee pursuant to this Section 13 or any property subject thereto.

13.8 Guarantee Absolute and Unconditional; Guarantor Waivers; Guarantor Consent. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Agent or lender upon the guaranty contained in this Section 13 or acceptance of this guaranty. The Obligations shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this guaranty. All dealings between Loan Parties, Agent and Lenders shall be conclusively presumed to have been had or consummated in reliance upon this guaranty. Each Guarantor further waives to the fullest extent permitted by applicable law:

(a) diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any Loan Party with respect to the Obligations;

(b) any right to require Agent or any Lender to marshal assets in favor of any Loan Party or any other Person, to proceed against any Loan Party or any other Person, to proceed against or exhaust any of the Collateral, to give notice of the terms, time and place of any public or private sale of personal property security constituting the Collateral or other collateral for the Obligations or to comply with any other provisions of Section 9-611 of the Code (or any equivalent provision of any other applicable law) or to pursue any other right, remedy, power or privilege of Agent or Lender whatsoever;

(c) the defense of the statute of limitations in any action hereunder or for the collection or performance of the Obligations;

 

39


(d) any defense arising by reason of any lack of corporate or other authority or any other defense of any Loan Party or any other Person;

(e) any defense based upon Agent or any Lender’s errors or omissions in the administration of the Obligations;

(f) any rights to set-offs and counterclaims;

(g) any defense based upon an election of remedies (including, if available, an election to proceed by nonjudicial foreclosure) which destroys or impairs the subrogation rights of such Guarantor or the right of such Guarantor to proceed against any Loan Party for reimbursement; and

(h) without limiting the generality of the foregoing, to the fullest extent permitted by law, any defenses or benefits that may be derived from or afforded by applicable law that limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this Agreement.

Each Guarantor understands and agrees that the guarantee contained in this Section 13 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity or enforceability of this Agreement or any other Loan Document, any of the Obligations or any other collateral security therefor or guaranty or right of offset with respect thereto at any time or from time to time held by Agent or any Lender, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Loan Party or any other Person against Agent or Lender, or (iii) any other circumstance whatsoever (with or without notice to or knowledge of any Loan Party) which constitutes, or might be construed to constitute, an equitable or legal discharge of any Borrower for the Obligations, or of such Guarantor under this guaranty, in bankruptcy or in any other instance, (iv) any Insolvency Proceeding with respect to any Loan Party or any other Person, (v) any merger, acquisition, consolidation or change in structure of any Loan Party or any other Person, or any sale, lease, transfer or other disposition of any or all of the assets or Equity Interests of any Loan Party or any other Person, (vi) any assignment or other transfer, in whole or in part, of Agent or any Lender’s interests in and rights under this Agreement or the other Loan Documents, including Agent or any Lender’s right to receive payment of the Obligations, or any assignment or other transfer, in whole or in part, of Agent’s interests in and to any of the Collateral, (vii) Agent’s vote, claim, distribution, election, acceptance, action or inaction in any Insolvency Proceeding related to any of the Obligations, and (viii) any other guaranty, whether by such Guarantor or any other Person, of all or any part of the Obligations or any other indebtedness, obligations or liabilities of any Guarantor to Agent or any Lender. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, Agent may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any Loan Party or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto. Any failure by Agent to make any such demand, to pursue such other rights or remedies or to collect any payments from any Loan Party or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Loan Party or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Agent or any Lender against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

13.9 Modifications to the Obligations. Each Guarantor further unconditionally consents and agrees that, without notice to or further assent from any Guarantor: (a) the principal amount of the Obligations may be increased or decreased and additional indebtedness or obligations of a Borrower or any other Persons under the Loan Documents may be incurred, by one or more amendments, modifications, renewals or extensions of any Loan Document or otherwise; (b) the time, manner, place or terms of any payment under any Loan Document may be extended or changed, including by an increase or decrease in the interest rate on any Obligation or any fee or other amount payable under such Loan Document, by an amendment, modification or renewal of any Loan Document or otherwise; (c) the time for any Loan Party’s performance of or compliance with any term, covenant or agreement on its part to be performed or observed under any Loan Document may be extended, or such performance or compliance waived, or failure in or departure from such performance or compliance consented to, all in such manner and upon such terms as Agent and applicable Lenders may deem proper; (d) in addition to the Collateral, Agent may take and hold other security (legal or equitable) of any kind, at any time, as collateral for the Obligations, and may, from time

 

40


to time, in whole or in part, exchange, sell, surrender, release, subordinate, modify, waive, rescind, compromise or extend such security and may permit or consent to any such action or the result of any such action, and may apply such security and direct the order or manner of sale thereof; (e) Agent may discharge or release, in whole or in part, any other Guarantor or any other Loan Party or other Person liable for the payment and performance of all or any part of the Obligations, and may permit or consent to any such action or any result of such action, and shall not be obligated to demand or enforce payment upon any of the Collateral, nor shall Agent or any Lender be liable to any Guarantor for any failure to collect or enforce payment or performance of the Obligations from any Person or to realize upon the Collateral; and (f) Agent may request and accept other guaranties of the Obligations and any other indebtedness, obligations or liabilities of a Loan Party to Agent and may, from time to time, in whole or in part, surrender, release, subordinate, modify, waive, rescind, compromise or extend any such guaranty and may permit or consent to any such action or the result of any such action; in case of each of clause (a) through (f), as Agent may deem advisable, and without impairing, abridging, releasing or affecting this Agreement.

13.10 Reinstatement. The guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of a Loan Party, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, a Loan Party or any substantial part of its property, or otherwise, all as though such payments had not been made.

13.11 No Waiver by Course of Conduct; Cumulative Remedies. Neither Agent nor any Lender shall by any act (except in writing in accordance with Section 12.9), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default, as applicable. No failure to exercise, nor any delay in exercising, on the part of Agent or any Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Agent or any Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Agent or such Lender would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

13.12 Enforcement Expenses; Indemnification. Each Guarantor agrees to pay or reimburse Agent, for the ratable benefit of Lenders, for all costs and expenses incurred in collecting against such Guarantor under this guaranty or otherwise enforcing or preserving any rights under this Agreement and the other Loan Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Restatement Date.

 

BORROWERS:
FISCALNOTE, INC.
By  

 

Name:  

 

Title:  

 

CQ-ROLL CALL, INC.
By  

 

Name:  

 

Title:  

 

CAPITOL ADVANTAGE LLC
By  

 

Name:  

 

Title:  

 

VOTERVOICE, L.L.C.
By  

 

Name:  

 

Title:  

 

SANDHILL STRATEGY LLC
By  

 

Name:  

 

Title:  

 

GUARANTORS:
FISCALNOTE HOLDINGS, INC.
By  

 

Name:  

 

Title:  

 

FISCALNOTE INTERMEDIATE HOLDCO, INC.
By  

 

Name:  

 

Title:  

 


FISCALNOTE HOLDINGS II, INC.

By  

 

Name:  

 

Title:  

 

FIRESIDE 21, LLC

By  

 

Name:  

 

Title:  

 

FACTSQUARED, LLC

By  

 

Name:  

 

Title:  

 

THE OXFORD ANALYTICA INTERNATIONAL GROUP, LLC
By  

 

Name:  

 

Title:  

 

OXFORD ANALYTICA INC.

By  

 

Name:  

 

Title:  

 

FISCALNOTE BOARDS LLC

By  

 

Name:  

 

Title:  

 

PREDATA, INC.

By  

 

Name:  

 

Title:  

 

CURATE SOLUTIONS, INC.
By  

 

Name:  

 

Title:  

 

FORGE.AI, INC.
By  

 

Name:  

 

Title:  

 


FRONTIER STRATEGY GROUP LLC

By                                                                                                   

Name:                                                                                            

Title:                                                                                              


[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT]

 

AGENT:
RUNWAY GROWTH FINANCE CORP.

By                                                                                                   

Name:                                                                                            

Title:                                                                                              

LENDERS:
RUNWAY GROWTH FINANCE CORP.

By                                                                                                   

Name:                                                                                            

Title:                                                                                              

ORIX GROWTH CAPITAL, LLC

By                                                                                                   

Name:                                                                                            

Title:                                                                                              

CLOVER OROCHI LLC

 

By: CLOVER PRIVATE CREDIT OPPORTUNITIES ORIGINATION II LP and CLOVER PRIVATE CREDIT OPPORTUNITIES ORIGINATION (LEVERED) II LP, its sole members

 

By: UBS O’CONNOR LLC, its investment manager

By                                                                                                   

Name:                                                                                            

Title:                                                                                              

ACM ASOF VIII SAAS FINCO LLC

By                                                                                                   

Name:                                                                                            

Title:                                                                                              


EXHIBIT A

DEFINITIONS

As used in this Agreement, the following capitalized terms have the following meanings:

Account” means any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to a Loan Party.

Account Control Agreement” means any control agreement entered into among the depository institution at which a Loan Party maintains a Deposit Account or the securities intermediary or commodity intermediary at which a Loan Party maintains a Securities Account or a Commodity Account, one or more Loan Parties, and Agent pursuant to which Agent, for the benefit of Lenders, obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account, in each case, in form and substance reasonably satisfactory to Agent.

Account Debtor” means any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.

Acquisition” means an acquisition by a Loan Party of all or substantially all of the assets of another Person or a division or line of business of another Person, all or substantially all of the capital stock of another Person, or a merger, consolidation or other combination of a Loan Party with another Person, in each case, whether as a single transaction or series of related transactions.

Adjusted EBITDA” means, with respect to any period,

 

  (a)

Net Income for such period, plus

 

  (b)

to the extent deducted in the calculation of Net Income for such period and without duplication

(i) Interest Expense for such period,

(ii) depreciation expense and amortization expense for such period,

(iii) income tax expense (whether federal, state, local or foreign) for such period,

(iv) any non-cash expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement,

(v) non-cash expenses, charges or losses, including non-cash impairment of goodwill and other intangible assets for such period (but excluding any non-cash expense or charge that is an accrual of a reserve for a cash expenditure or payment required to be made, or anticipated to be made, in a future period),

(vi) any extraordinary, unusual or non-recurring expenses, charges or losses decreasing Net Income for such period,

(vii) any accruals, payments, fees, costs, expenses or charges (other than consolidated depreciation and amortization expense but including rationalization, legal, tax, structuring and other costs and expenses) related to any actual, proposed or contemplated issuance or registration of Equity Interests or any Investment or acquisition (including Permitted Acquisitions), disposition, recapitalization, distributions, dividends, consolidation, or the incurrence or registration or amendment or modification (actual or proposed) of Indebtedness (including a refinancing thereof) (in each case, whether or not consummated or successful), including


(A) such fees, expenses or charges related to any Loans, any permitted refinancing of other permitted Indebtedness and this Agreement, and

(B) any amendment, waiver or other modification of Loans, or any permitted refinancing of other permitted Indebtedness, any Loan Document, any other Indebtedness or any Equity Interests, in each case, whether or not consummated,

(viii) the amount of any earnouts permitted hereunder (whether for accruals for payments paid in cash or otherwise) for such period, and

(ix) the amount of any

(A) restructuring costs, integration costs, business optimization expenses or costs (including charges directly related to implementation of cost-savings initiatives), operating expense reductions, integration, transition, facilities opening and pre-opening expenses (including contract termination costs and any costs related to the opening of offices), retention, signing bonuses, relocation, recruiting and other employee related expenses and

(B) costs and expenses associated with business expansion and startup costs for new business lines, geographic expansion or new products expected to be implemented within eighteen (18) months of the date thereof;

provided that, the aggregate amount added back pursuant to clauses (vi) through (ix) above shall not, for any consecutive twelve month period, exceed $2,000,000 in the aggregate unless otherwise approved by Required Lenders in their sole discretion,

minus

(c)       (i)       interest income for such period,

 

  (ii)

income tax credits for such period, and

 

  (iii)

any extraordinary, unusual or non-recurring gains increasing Net Income for such period.

Affiliate” means, with respect to any Person, each other Person that owns or controls, directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members; provided, that for purposes of Section 7.8 of this Agreement: (a) if any Person owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person), then both such Persons shall be Affiliates of each other, (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person.

Agent” has the meaning set forth in the preamble of this Agreement.

Agreement” has the meaning set forth in the preamble of this Agreement.

Amortization Date” means August 15, 2025.

Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended, and all other applicable laws and regulations or ordinances concerning or relating to bribery or corruption in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business.


Anti-Money Laundering Laws” means the applicable laws or regulations in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business that relates to money laundering, any predicate crime to money laundering, or any financial record keeping and reporting requirements related thereto.

Applicable PIK Rate” means 1.0% per annum.

Applicable Rate” means a variable annual rate equal to the greater of (i) the Prime Rate plus 5.0%, and (ii) 9.0%.

Approved Fund” means any fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

ARR” as of the date of any determination, the aggregate of the total value of each active renewable customer contract in effect as of the determination date, divided by the number of months in its contractual term, multiplied by 12, and calculated in a manner consistent with the calculation delivered to the Lenders prior to the Restatement Date.

ARR Ratio” means the ratio of (x) Funded Debt of the Loan Parties, on a consolidated basis and calculated on a pro forma basis (giving effect to any requested Incremental Term Loan and giving effect to any transaction proposed to be funded with the proceeds thereof), as of the most recent fiscal quarter then ended for which financial statements are available, to (y) Quarterly Average ARR.

Assignment Agreement” means an Assignment Agreement substantially in the form of Exhibit G, with such amendments or modifications as may be approved by Agent.

Atalaya” means ACM ASOF VIII SaaS FinCo LLC or any affiliated Lender.

Automatic Payment Authorization” means the Automatic Payment Authorization in substantially the form of Exhibit E.

Backstop Agreement” means an agreement between Holdings and the “Purchasers” (as defined therein) to backstop up to $175,000,000 to the extent payable to redeem shareholders exercising their right of redemption with respect to Class A Ordinary Shares of Holdings prior to the consummation of the Restatement Date Merger.

Board” means, with respect to any Person, the board of directors, board of managers, managers or other similar bodies or authorities performing similar governing functions for such Person. Unless the context otherwise requires, each reference to a Board herein shall be a reference to the Board of Holdings.

Books” means, with respect to a Borrower or other Loan Party, all of such Person’s books and records including ledgers, federal and state tax returns, records regarding such Person’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.

Borrower” and “Borrowers” has the meaning set forth in the preamble hereof.

Borrower Representative” has the meaning set forth in the preamble hereof.

Business Day” means any day that is not a Saturday, Sunday or a day on which commercial banks in the State of New York are required or permitted to be closed.

CARES Act” means Title I of the Coronavirus Aid, Relief and Economic Security Act, as amended (including any successor thereto), and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof, regardless of the date enacted, adopted, issued or implemented.


Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) certificates of deposit issued by any bank with assets of at least $500,000,000 maturing no more than one year from the date of investment therein; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.

Change of Control” means (i) any Person (other than Permitted Holders) or Persons (other than Permitted Holders) constituting a “group” (as such term is used in Section 13(d) and Section 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person and its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), becoming the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of Equity Interests representing more than thirty- five percent of the aggregate ordinary voting power represented by the then issued and outstanding Equity Interests of Holdings, or (ii) the acquisition by Permitted Holders of Equity Interests or a merger, consolidation recapitalization or similar transaction, in each case, as a result of which, the common stock of Holdings (or any successor parent entity that controls Borrowers) ceases to be traded on a recognized U.S. securities trading market or exchange.

Claims” has the meaning set forth in Section 12.3.

Closing Date” means October 19, 2020.

Code” means the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

Collateral” has the meaning set forth in the Security Agreement.

Collateral Access Agreement” means an agreement with respect to a Loan Party’s leased location or bailee location, in each case in form and substance reasonably satisfactory to Agent.

Collateral Account” means any Deposit Account, Securities Account, or Commodity Account of a Loan Party.

Commitment Date” means May 9, 2022.

Commodity Account” means any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

Compliance Certificate” means that certain certificate in the form attached hereto as Exhibit C.

Contingent Obligation” means, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.


Copyrights” means any and all rights in any works of authorship, including (A) copyrights and moral rights, (B) copyright registrations and recordings thereof and all applications in connection therewith, (C) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (D) the right to sue for past, present, and future infringements thereof, and (E) all rights corresponding thereto throughout the world.

Default” means any circumstance, event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

Default Rate” has the meaning set forth in Section 2.3(b).

Defaulting Lender” means any Lender that (a) has failed to perform any of its funding obligations hereunder (or otherwise failed to pay over to Agent any amounts owed by such Lender hereunder) within one (1) Business Day of the date required to be funded by it hereunder unless such Lender notifies Agent and Borrower Representative in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) has notified Borrower Representative or Agent that it does not intend to comply with its funding obligations or has made a public statement or provided any written notification to any Person to that effect with respect to its funding obligations hereunder or under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after request by Agent (whether acting on its own behalf or at the reasonable request of Borrower Representative (it being understood that Agent shall comply with any such reasonable request)), to confirm in a manner satisfactory to Agent and Borrower Representative that it will comply with its funding obligations (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Agent and Borrower Representative), or (d) has, or has a direct or indirect parent company that has, (i) become or is insolvent (or has admitted in writing that it is insolvent), (ii) become the subject of a proceeding under any insolvency law, (iii) had a receiver, conservator, trustee, administrator, examiner, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a substantial part of its assets or a custodian appointed for it or a substantial part of its assets, or (iv) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority, where such ownership interest or proceeding does not result in or provide such Lender or Person with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Lender or Person (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Lender or Person.

Deferred Acquisition Consideration” has the meaning set forth in clause (d)(ii) of the definition of Permitted Acquisition.

Deposit Account” means any “deposit account” as defined in the Code with such additions to such term as may hereafter be made, and includes any checking account, savings account or certificate of deposit.

Disqualified Equity Interests” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable), (b) are redeemable


at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, except as a result of a change in control or an asset sale or, in case of Equity Interests issued to an employee or director of a Loan Party or a Subsidiary, the death, disability, retirement, severance or termination of employment or service of such holder, in each case so long as any such right of the holder is exercisable only after the prior repayment in full of the Obligations, (c) provide for the scheduled payments of dividends in cash, or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Term Loan Maturity Date.

Dollars, dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.

Domestic Subsidiary” means a Subsidiary organized, incorporated or otherwise formed under the laws of the United States or any State thereof, including the District of Columbia.

Equipment” means all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.

Equity Interests” means, with respect to any Person, any of the shares of capital stock of (or other ownership, membership or profit interests in) such Person, any of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership, membership or profit interests in) such Person, any of the securities convertible into or exchangeable for shares of capital stock of (or other ownership, membership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and any of the other ownership, membership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination. Equity Interests shall not include Indebtedness convertible into Equity Interests (other than Disqualified Equity Interests).

ERISA” means the Employee Retirement Income Security Act of 1974, and its regulations.

Event of Default” has the meaning set forth in Section 8.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Excluded Accounts” means (i) Deposit Accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of a Borrower’s employees, provided that the aggregate balance maintained therein shall not exceed an amount equal to the aggregate amount of such payments to be paid in the then-next payroll period, (ii) Deposit Accounts used exclusively to maintain funds deducted from pay otherwise due to employees for services rendered to be applied toward the tax obligations of such employees; (iii) Collateral Accounts constituting trust, fiduciary and escrow accounts; (iv) Collateral Accounts used exclusively to maintain deposits or cash collateral as expressly contemplated by the defined term “Permitted Liens”; and (v) other Collateral Accounts, provided that the aggregate balance for all such Collateral Accounts shall not exceed $2,000,000 at any time, provided that Excluded Accounts are identified as such on the Perfection Certificate or from time to time thereafter in an updated schedule of Excluded Accounts.

Excluded Locations” means the following locations where Collateral may be located from time to time: (a) locations where mobile office equipment (e.g. laptops, mobile phones and the like) may be located with employees in the Ordinary Course of Business, (b) locations of inventory and equipment in transit, (c) locations of equipment that is being repaired, (d) locations of Collateral that is no longer used or useful in the Loan Parties’ business in the Loan Parties’ reasonable business judgment, and (e) other locations where, in the aggregate for all such locations, less than One Hundred Thousand Dollars ($100,000) of Collateral is located.

Excluded Subsidiary” means any Subsidiary that is not a Loan Party.


Existing Credit Agreement” has the meaning set forth in the preamble hereto.

Existing Term Loans” has the meaning set forth in the preamble hereto.

FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or any successor thereto.

Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

Funded Debt” means, as to any Person, without duplication, all Indebtedness for borrowed money, including capital lease obligations, but excluding (x) Permitted Seller Debt, (y) earnouts permitted hereunder (until they are overdue), and (z) unsecured Indebtedness which (in case of this clause (z)) matures outside of the latest stated maturity of the Term Loans (or, if applicable, may be payable earlier upon a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable).

Funding Date” means any date on which a Loan is made to or for the account of a Borrower which shall be a Business Day.

GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, as in effect from time to time, which are applicable to the circumstances as of the date of determination, provided, however, that if there occurs after the Closing Date any change in GAAP that affects in any respect the calculation of any covenant or threshold in this Agreement, Agent and Borrowers shall negotiate in good faith amendments to the provisions of this Agreement that relate to the calculation of such covenant or threshold with the intent of having the respective positions of Lender and Borrowers after such change in GAAP conform as nearly as possible to their respective positions as of the Closing Date, and, until any such amendments have been agreed upon, such covenants and thresholds shall be calculated as if no such change in GAAP has occurred.

General Intangibles” means all “general intangibles” as defined in the Code in effect on the Closing Date with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

Governmental Approval” means any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.

Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.

Guarantor” has the meaning set forth in the preamble hereto.

Guaranty” means any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise supplemented.


Hedge Agreement” means a “swap agreement” as that term is defined in Section 101(53B)(A) of title 11 of the United States Code, as in effect from time to time.

Holdings” means FiscalNote Holdings, Inc., a Delaware corporation.

Incremental Term Loan Commitment” has the meaning set forth in Section 2.7(a).

Incremental Term Loan” has the meaning set forth in Section 2.7(a).

Indebtedness” means (a) indebtedness for borrowed money, (b) any reimbursement and other obligations for surety bonds and letters of credit, (c) obligations evidenced by notes, bonds, debentures or similar instruments, (d) capital lease obligations, (e) Contingent Obligations, (f) all obligations to pay the deferred purchase price of services or assets (other than trade payables incurred in the Ordinary Course of Business and repayable in accordance with customary trade practices and, for the avoidance of doubt, other than royalty payments payable in the Ordinary Course of Business in respect of non-exclusive licenses) and any earn-out or similar obligations to the extent such obligation is required to be reflected on such Person’s balance sheet as a liability under GAAP, (g) all monetary obligations owing under Hedge Agreements (which amount shall be calculated based on the amount that would be payable by such Person if the Hedge Agreement were terminated on the date of determination), (h) any Disqualified Equity Interests, and (i) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above., provided that, “Indebtedness” shall not include (i) customary obligations under employment agreements and deferred compensation incurred in the Ordinary Course of Business, (ii) tax liabilities that are not yet delinquent (unless subject to contest pursuant to Section 5.9), (iii) any accruals for payroll in the Ordinary Course of Business, (iv) accrued licensing fees owed under licenses (including Intellectual Property licenses) to the extent not yet due and owing, (v) deferred rent obligations in respect of real property leases incurred in the Ordinary Course of Business, and (vi) deferred revenues incurred in the Ordinary Course of Business.

Indemnified Person” has the meaning set forth in Section 12.3.

Initial Lenders” means the Lenders making the Restatement Date Incremental Term Loans as of the Restatement Date.

Insolvency Proceeding” means any proceeding by or against any Person under title 11 of the United States Code, as in effect from time to time, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

Intellectual Property” means, with respect to any Loan Party (or, as applicable, any of its Subsidiaries), any and all Patents, Copyrights, Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms, software programs (including source code and object code), processes, product designs, industrial designs, blueprints, drawings, data, customer lists, URLs and domain names, specifications, documentations, reports, catalogs, literature, and any other forms of technology or proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof.

Intellectual Property Security Agreement” means an intellectual property security agreement, in form and substance reasonably satisfactory to the Administrative Agent, as supplemented and joined from time to time by the execution and delivery of supplements and joinders as provided therein or otherwise reasonably acceptable to the Agent.

Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) of Holdings and each of its Subsidiaries, determined on a consolidated basis and in accordance with GAAP for the relevant period ending on such date, including, in any event, interest expense with respect to any Term Loan and other Indebtedness of such Holdings or its Subsidiaries, including, without limitation or duplication, all commissions, discounts, or related amortization and other fees and charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the interest portion of any deferred payment obligation (including leases of all types).


Intermediate Parent” means FiscalNote Holdings II, Inc., a Delaware corporation.

Inventory” means all “inventory” as defined in the Code in effect on the Closing Date with such additions to such term as may hereafter be made.

Investment” means the purchase or other acquisition of any beneficial ownership interest in any Person (including stock, partnership interest or other securities or Equity Interests), the making or extension of any loan, advance or capital contribution to any Person, or the acquisition of all or substantially all of the assets or properties of another Person. For the avoidance of doubt, “Investment” shall exclude transactions under transfer pricing arrangements on a cost-plus basis between Loan Parties and Excluded Subsidiaries in the Ordinary Course of Business, provided that (A) the payments required to be made pursuant thereto are based on advice of Loan Parties’ independent tax or accounting advisors, (B) the agreements or arrangements are on arms-length terms or otherwise in accordance with applicable transfer pricing rules, and not designed to effect a net transfer of assets to an Excluded Subsidiary, and (C) Agent shall have a right to review applicable intercompany agreements upon reasonable request.

Lender” has the meaning set forth in the preamble hereof.

Lender Expenses” means all reasonable and documented out-of-pocket audit fees and expenses, costs, and expenses (including reasonable and documented outside attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to a Loan Party.

Lien” means a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.

Loan Documents” means, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement, the Security Agreement, any Intellectual Property Security Agreement, any Guaranty, any Subordination Agreement, the Account Control Agreements, the Collateral Access Agreements, any note or notes, the Automatic Payment Authorization, the Restatement Date Commitment Letter, the Restatement Date Fee Letter, and any other present or future agreement by a Loan Party with or for the benefit of Agent or any Lender in connection with this Agreement, all as amended, modified, supplemented, extended or restated from time to time.

Loan Party” or “Loan Parties” means, each Borrower and each Guarantor.

Loans” means, collectively, the Term Loans, and any other loan from time to time made under this Agreement, and “Loan” means any of the foregoing.

Major Default” means any Event of Default pursuant to Section 8.1, Section 8.2 (to the extent resulting from a breach of Section 6.10 or Section 7.2(d)), Section 8.3 or Section 8.5.

Margin Stock” has the meaning set forth in Section 5.11(c).

Material Adverse Effect” means (a) a material impairment in the perfection or priority of Agent’s Lien in the Collateral or in the value of the Collateral (other than solely due to a failure by Agent to take any action to secure the perfection or priority of Agent’s Lien in the Collateral); or (b) a material adverse effect upon: (i) the business, operations, properties, assets or condition (financial or otherwise) of the Loan Parties as a whole; or (ii) the ability of Agent to enforce any of its rights or remedies with respect to any Obligations (other than solely due to a failure by Agent to take any action to secure the perfection or priority of Agent’s Lien in the Collateral).


Material IP” means any Intellectual Property owned by or licensed to any Loan Party or any of its Subsidiaries that is material to the conduct of the businesses of the Loan Parties or any of their respective Subsidiaries, taken as a whole, including all proprietary software used on behalf of any such Loan Party or any such Subsidiary or offered, marketed, or licensed (including as a software service) by any such Loan Party or any such Subsidiary to third parties for generating material revenue for such Loan Parties or any of their respective Subsidiaries.

Maximum Rate” has the meaning set forth in Section 2.3(d) hereof.

Merger Sub” means Grassroots Merger Sub, Inc., a Delaware corporation.

Minimum Liquidity Condition” means that after giving effect to the Restatement Date Transactions, including the making of the Restatement Date Incremental Term Loans, unrestricted cash of Holdings and its Subsidiaries, on a consolidated basis, is no less than $85,000,000.

Net Cash Proceeds” means:

(a) with respect to any sale or disposition by any Loan Party or any of its Subsidiaries of assets, the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial consideration or through the payment of deferred consideration) by or on behalf of such Loan Party or such Subsidiary, in connection therewith after deducting therefrom only (i) the amount of any Indebtedness secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to Agent or any Lender under this Agreement or the other Loan Documents and (B) Indebtedness assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such sale or disposition, (ii) reasonable fees, commissions, and expenses related thereto and required to be paid by such Loan Party or such Subsidiary in connection with such sale or disposition, (iii) taxes paid or payable to any taxing authorities by such Loan Party or such Subsidiary in connection with such sale or disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of any Loan Party or any of its Subsidiaries, and are properly attributable to such transaction, and (iv) all amounts that are set aside as a reserve (A) for adjustments in respect of the purchase price of such assets, (B) for any liabilities associated with such sale or casualty, to the extent such reserve is required by GAAP, and (C) for the payment of unassumed liabilities relating to the assets sold or otherwise disposed of at the time of, or within 30 days after, the date of such sale or other disposition, to the extent that in each case the funds described above in this clause (iv) are (x) deposited into escrow with a third party escrow agent or set aside in a separate Deposit Account that is subject to an Account Control Agreement in favor of Agent, and (y) paid to Agent as a prepayment of the applicable Obligations in accordance with Section 2.2(b) of this Agreement at such time when such amounts are no longer required to be set aside as such a reserve; and

(b) with respect to the issuance or incurrence of any Indebtedness by any Loan Party or any of its Subsidiaries (other than Permitted Indebtedness) the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial consideration or through the payment or disposition of deferred consideration) by or on behalf of such Loan Party or such Subsidiary in connection with such issuance or incurrence, after deducting therefrom only (i) reasonable fees, commissions, and expenses related thereto and required to be paid by such Loan Party or such Subsidiary in connection with such issuance or incurrence, and (ii) taxes paid or payable to any taxing authorities by such Loan Party or such Subsidiary in connection with such issuance or incurrence, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of any Loan Party or any of its Subsidiaries, and are properly attributable to such transaction.

Net Income” means the net profit (or loss), after provision for taxes, of Holdings and each of its Subsidiaries, on a consolidated basis, for any period as at any date of determination, for such period taken as a single accounting period. Net Income shall exclude (i) the income or loss of any Person accrued prior to the date such Person becomes a Subsidiary or is merged into or consolidated with the Borrower or another Subsidiary, (ii) the effects of adjustments in component amounts required or permitted by GAAP resulting from the application of acquisition method, purchase and/or recapitalization accounting with respect to any consummated Permitted Acquisition or Permitted Investment, (iii) the income or loss for such period of any Person that is not a Subsidiary, or that is accounted for by the equity method of accounting, will be included only to the extent of the amount of dividends or distributions to Holdings or a Subsidiary thereof in respect of such period. Net Income shall include any ordinary course dividends or distributions received from any such Person described in clause (iii) of the foregoing sentence during such period in excess of the amounts included in subclause (iii) above.


Non-Consenting Lender” has the meaning set forth in Section 12.8(c).

Obligations” means all of each Loan Party’s obligations to pay the Loans when due, including principal, interest, fees, Lender Expenses, the Restatement Date Final Payment, the Original Final Payment, and such other amounts due to be paid by any Loan Party, and each any Loan Party’s obligation to perform its duties under the Loan Documents, and any other debts, liabilities and other amounts any Loan Party owes to Agent or any Lender at any time, whether under the Loan Documents or otherwise, including, without limitation, interest accruing after Insolvency Proceedings begin (whether or not allowed), and any debts, liabilities, or obligations of any Loan Party assigned to Agent or any Lender.

OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

Operating Documents” means, for any Person, such Person’s formation documents, (which, for purposes of the officers’ certificates delivered pursuant to Schedule 2, shall be as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of formation, organization or incorporation on a date that is no earlier than thirty (30) days prior to the Restatement Date) and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement or operating agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments, restatements and modifications thereto.

Ordinary Course of Business” means, in respect of any transaction involving any Person, the ordinary course of such Person’s business as conducted by any such Person undertaken by such Person in accordance with the usual and customary customs and practices in the kind of business in which such Person is engaged in good faith and not for purposes of evading any covenant or restriction in any Loan Document.

Original Final Payment” means a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) equal to $1,734,591.79.

Parent” means FiscalNote Intermediate Holdco, Inc., a Delaware corporation.

Patents” means patents and patent applications, including (A) the patents and patent applications, (B) all continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon, (C) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (D) the right to sue for past, present, and future infringements thereof, and (E) all rights corresponding thereto throughout the world.

Payment Date” means the fifteenth (15th) calendar day of each month.

Perfection Certificate” has the meaning set forth in Section 5.1.

Permitted Acquisition” means any Acquisition, (i) as to which Required Lenders have granted prior written consent, provided that with written respect to any request for consent to an Acquisition by Borrower Representative delivered to Lenders in accordance with Section 10 (including by email, provided that in case of email delivery, each Lender has confirmed receipt) and the contact details set forth on Schedule 1, Part D (as such schedule may be updated from time to time), which request is accompanied by such detailed background information with respect to the proposed Acquisition as is reasonably necessary (in the opinion of Borrower Representative, determined in good faith) for Lenders to determine whether to grant such consent, any Lender shall be deemed to have consented to such Acquisition if such Lender fails to deny such consent by written notice to Borrower Representative within five (5) Business Days of the actual receipt by such Lender of a request in accordance with the foregoing (or such other later time as Borrower Representative may state in the relevant written request as being the time available for granting such consent) or (ii) which satisfies and is conducted in accordance with, in the case of this clause (ii), the following requirements:


(a) such Acquisition is of a Person engaged in a line of business which is the same as, reasonably related to, or incidental to, the business engaged by Borrowers and their Subsidiaries as of the Restatement Date;

(b) such Acquisition shall be of a Person, organized and domiciled in, or assets (other than a de minimis amount of assets in relation to the assets being acquired), located in, the United States by a Loan Party; provided that such Acquisition may be (x) of a Person, organized and domiciled in, or assets located outside of the United States or (y) by an Excluded Subsidiary, if, in each case, such Acquisition is financed solely with proceeds of the issuance of Equity Interests of Holdings (it being understood that any contribution to a Foreign Subsidiary of the net cash proceeds of an issuance of equity to financing a Permitted Acquisition shall not be deemed to be an Investment hereunder), and provided further, that to the extent such Foreign Subsidiary is projected to have, on a stand-alone basis, operating losses, the amounts required to fund such operating losses in the following twelve (12) month period shall not exceed, together with other projected Investments in Excluded Subsidiaries, the aggregate amount shall not exceed the amount permitted pursuant to Section 7.7;

(c) such Acquisition shall be consensual;

(d) the sum of (i) the aggregate cash consideration paid in such fiscal year in connection with such Acquisitions and (ii) the aggregate amount of any Indebtedness consisting of seller notes, cash earnouts and deferred or cash contingent purchase price consideration (the “Deferred Acquisition Consideration”) in connection with Permitted Acquisitions (and including without limitation, any seller notes), in each case, payable in cash in respect of any Permitted Acquisition in any twelve (12) consecutive calendar months valued in accordance with GAAP, does not exceed $25,000,000, provided that for purposes of determining compliance with the foregoing clauses (i) and (ii), with respect to each Permitted Acquisition the following consideration shall be excluded (x) consideration paid in the form or retention bonuses in an amount not to exceed $2,000,000, and (y) Indebtedness consisting of Indebtedness of the type described in clause (ii) above that has a maturity at least 91 days after the Term Loan Maturity Date and is subject to a Subordination Agreement in form reasonably satisfactory and in substance satisfactory to Agent and Required Lenders;

(e) Borrower Representative shall have delivered to Agent not less than five (5) Business Days (or such shorter period of time agreed to by Agent), notice of such Acquisition, together with a summary of the terms thereof, a copy of any due diligence memorandum, historical financial statements and financial statements and projections on a pro forma adjusted basis covering at least four consecutive fiscal quarters following the anticipated effective date of such Acquisition, and copies of all material documents relating to such Acquisition (including the acquisition agreement and any related material document, which may be in the form of drafts with updated copies provided as available), and calculations demonstrating pro forma compliance with financial covenants after giving effect to such proposed Acquisition for each measurement date in the four consecutive fiscal quarters following the anticipated effective date of such Acquisition;

(f) both immediately before and after giving effect to such Acquisition, no Event of Default shall exist; and

(g) both (i) the assets being acquired or the Person whose Equity Interests are being acquired, together with all other assets or Persons acquired in connection with other Permitted Acquisitions, taken in the aggregate, do not have Adjusted EBITDA (with such other adjustments approved by Required Lenders) that is less than negative $2,000,000 for the consecutive twelve (12) month period most recently concluded prior to the date of the proposed Acquisition and (ii) the assets being acquired or the Person whose Equity Interests are being acquired in any one Permitted Acquisition do not have Adjusted EBITDA (with such other adjustments approved by Required Lenders) that is less than negative $2,000,000 for the consecutive twelve (12) month period most recently concluded prior to the date of the proposed Acquisition; provided that to the extent that any assets acquired or Person whose Equity Interests were acquired pursuant to a Permitted Acquisition has positive Adjusted EBITDA (with such other adjustments approved by Required Lenders) for such consecutive twelve (12) month period, then for purposes of any determination of compliance with this clause (g) for any subsequent Acquisition, the amount of such positive Adjusted EBITDA (with such other adjustments approved by Required Lenders) included in the calculation of aggregate negative Adjusted EBITDA (with such other adjustments approved by Required Lenders) shall be limited to the amount necessary to cause the satisfaction of the $2,000,000 aggregate negative Adjusted EBITDA (with such other adjustments approved by Required Lenders) limitation.


Permitted Holders” means (a) each of the following individuals: (i) Timothy Hwang and (ii) Gerald Yao, and in each case, his estate, spouse, heirs, ancestors, lineal descendants, legatees, legal representatives (in their capacities as such) or the trustee (in its capacity as such) of a bona fide trust of which one or more of the foregoing are the principal beneficiaries or grantors thereof and (b) any entity controlled, directly or indirectly, by any Persons referred to in the preceding clause (a), whether through the ownership of voting securities, by contract or otherwise.

Permitted Indebtedness” means:

(a) each Loan Party’s Indebtedness under this Agreement and the other Loan Documents;

(b) Indebtedness existing on the Restatement Date and set forth on Schedule 5.16 attached hereto, identified as “designated Permitted Indebtedness” therein;

(c) [Reserved]

(d) other unsecured Subordinated Debt incurred after the Restatement Date, provided that the aggregate original principal amount thereof shall not exceed $100,000,000 (minus the aggregate amount of any Indebtedness consisting of deferred or contingent Acquisition Consideration described in clause (d)(y) of the defined term “Permitted Acquisition”);

(e) (i) Indebtedness described in clause (d) of the defined term “Permitted Acquisitions”, subject to, if applicable, the limitation on total Deferred Acquisition Consideration set forth therein, and (ii) additional Indebtedness in respect of deferred or contingent purchase price with respect to Permitted Acquisitions in an aggregate amount outstanding not to exceed, in the case of this clause (ii), $10,000,000 at any time, payable not before 91 days after the Term Loan Maturity Date unless payable as a result of change of control, asset sale or equity conversion;

(f) unsecured Indebtedness to trade creditors incurred in the Ordinary Course of Business;

(g) Indebtedness incurred as a result of endorsing negotiable instruments received in the Ordinary Course of Business;

(h) Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring or leasing any fixed or capital asset in an aggregate principal amount at any time outstanding not greater than $5,000,000 in any fiscal year;

(i) Indebtedness (including guaranties) (i) among Loan Parties, (ii) of a Loan Party, subject to the conditions set forth in clause (d) of the defined term “Permitted Investments”, (iii) of a Subsidiary that is not a Loan Party to a Loan Party, subject to the conditions set forth in clause (d) of the defined term “Permitted Investments” and (iv) of a Subsidiary that is not a Loan Party to another Subsidiary that is not a Loan Party;

(j) Indebtedness in respect of performance, bid, surety or appeal bonds, performance and completion guarantees, import and export custom and duty guarantees and similar obligations, workers’ compensation claims, self-insurance obligations or bankers acceptances issued for the account of any Loan Party or any Subsidiary, in each case, provided in the Ordinary Course of Business, and not to exceed $500,000 in the aggregate at any time outstanding, but excluding (in each case) Indebtedness incurred through the borrowing of money;


(k) Indebtedness in respect of (i) credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so-called “procurement cards” or “P-cards”) or other similar cash management services, in each case, incurred in the Ordinary Course of Business and provided that such Indebtedness is secured solely by Liens permitted pursuant to clause (v) of the defined term “Permitted Liens” and does not exceed $1,000,000 in the aggregate at any time outstanding, and (ii) netting services, automatic clearinghouse arrangements or overdraft protections and similar arrangements in connection with Deposit Accounts, in each case solely to the extent incurred in the Ordinary Course of Business;

(l) Indebtedness owed to any Person providing property, casualty, liability, or other insurance to the Loan Parties, including to finance insurance premiums, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the policy year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such policy year;

(m) Indebtedness constituting customary indemnification obligations, adjustments of purchase price, non-competes or other similar obligations of any Loan Party in connection with sales, dispositions and Permitted Acquisitions and other Investments, in each case, to the extent such sale, disposition or Investment is permitted under this Agreement;

(n) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Ordinary Course of Business; provided that such Indebtedness is extinguished within five (5) Business Days of its incurrence;

(o) to the extent constituting Indebtedness, judgments, decrees, attachments or awards not constituting an Event of Default;

(p) Indebtedness representing taxes that are subject to permitted contest in compliance with Section 6.4;

(q) other Indebtedness of Loan Parties not to exceed $1,000,000 in the aggregate at any time outstanding, no more than $500,000 of which may be secured;

(r) Indebtedness existing or arising under any Hedge Agreement, provided that such obligations are entered into by a Loan Party for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets or property held or reasonably anticipated by such Person and not for purposes of speculation;

(s) Contingent Obligations consisting of normal and customary indemnities issued in the Ordinary Course of Business in connection with commercial contracts or in connection with the issuance and sale of securities;

(t) any guarantee by any Loan Party of any Indebtedness incurred by a Foreign Subsidiary that is a Permitted Investment;

(u) [Reserved]

(v) Indebtedness consisting of reimbursement obligations with respect to letters of credit, provided that the aggregate amount outstanding of all such Indebtedness does not exceed $1,000,000 at any time;

(w) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any Permitted Acquisition that was incurred under the CARES Act and was not created or incurred in anticipation of such Permitted Acquisition; and

(x) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness described in clause (b) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon the applicable Loan Party or Subsidiary, as the case may be.


Permitted Investments” means:

(a) Investments (including, without limitation, Subsidiaries) existing on the Restatement Date and shown on Schedule 7.7;

(b) (i) Investments consisting of Cash Equivalents, and (ii) any Investments permitted by Holdings’ investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Required Lenders;

(c) Investments consisting of repurchases of Holdings’ Equity Interests from former employees, officers and directors of Holdings to the extent permitted under Section 7.7;

(d) Investments (i) among Loan Parties, (ii) in a Loan Party, provided that any Indebtedness of a Loan Party owing to a Subsidiary that is not a Loan Party shall be subordinated to the Obligations on terms satisfactory to Agent, (iii) by a Loan Party in any Excluded Subsidiary, provided that (x) the aggregate amount of such Investments in all Excluded Subsidiaries pursuant to this clause (d) shall not exceed $5,000,000 in the aggregate in any twelve (12) month period (it being understood that for purposes of this clause (d)(iii), the amount of such Investments outstanding at any time shall be calculated net of the amount of returns (including dividends, interest, distributions, returns of principal, repayments, income and similar amounts) received in cash or cash equivalents by any Loan Party from any such Excluded Subsidiary in respect of such Investments), and (y) with respect to any individual Excluded Subsidiary, the amount of such Investment in such Excluded Subsidiary at any time shall not exceed the amount necessary to fund the current or reasonably anticipated operating expenses of such Excluded Subsidiary for the succeeding three (3) month period (taking into account their revenue from other sources), and (iv) of a Subsidiary that is not a Loan Party to another Subsidiary that is not a Loan Party;

(e) Investments not to exceed Five Hundred Thousand Dollars ($500,000) outstanding in the aggregate at any time consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the Ordinary Course of Business, and (ii) loans not involving the net transfer of cash proceeds to employees, officers or directors relating to the purchase of Equity Interests of Holdings pursuant to employee stock purchase plans or other similar agreements approved by the Board;

(f) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the Ordinary Course of Business;

(g) Investments consisting of Deposit Accounts and Securities Accounts used to maintain assets constituting Permitted Investments, in each case, maintained in compliance with Section 6.6 and Investments in negotiable instruments deposited or to be deposited for collection in the Ordinary Course of Business;

(h) Permitted Acquisitions and, in the case of a Permitted Acquisition by an Excluded Subsidiary, Investments in a Foreign Subsidiary to fund any deferred purchase price or earn out obligations entered into in connection with a Permitted Acquisition to the extent funded exclusively by proceeds from the issuance of Equity Interests of Holdings; and

(i) Investments consisting of accounts receivable of, or prepaid royalties and other credit extensions, to customers and suppliers in the Ordinary Course of Business; provided that this clause (i) shall not apply to Investments of a Loan Party in any Subsidiary;

(j) [Reserved];


(k) Investments in the nature of pledges or deposits with respect to leases, prepaid expenses or utilities provided to non-Affiliates of the Loan Parties in the Ordinary Course of Business;

(l) guarantees in the Ordinary Course of Business of obligations owed by the Loan Parties to landlords, suppliers, customers and licensees of any Loan Party;

(m) Investments of any Person existing at the time such Person becomes a Subsidiary or consolidates, amalgamates or merges with Borrowers or any of their Subsidiaries (including in connection with a Permitted Acquisition) so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation or merger and each such Investments are without recourse to any other Loan Party (unless such recourse would be otherwise permitted hereunder);

(n) intercompany receivables that arise solely from customary transfer pricing arrangements among the Loan Parties in each case in the Ordinary Course of Business and only to the extent such arrangements are entered into in order to accurately reflect the costs of operating the business of Loan Parties or to maintain compliance with all applicable jurisdictional tax requirements;

(o) [Reserved];

(p) Investments paid for with consideration which consists solely of Equity Interests of Holdings (other than Disqualified Equity Interests); provided that the aggregate fees, costs, and any other amounts paid or payable in cash or Cash Equivalents by Loan Parties and their Subsidiaries to reimburse counterparties in connection with such Investments do not exceed $200,000 in the aggregate from the Restatement Date through the termination of this Agreement;

(q) so long as no Event of Default exists at the time of such Investment or after giving effect to such Investment, Investments made exclusively with cash or Cash Equivalents in joint ventures in an amount not to exceed $2,000,000 at any time outstanding; and

(r) so long as no Event of Default exists at the time of such Investment or after giving effect to such Investment, any other Investments made exclusively with cash or Cash Equivalents an aggregate amount not to exceed $1,000,000 at any time outstanding.

Permitted License” means any non-exclusive license of Intellectual Property rights of a Borrower or its Subsidiaries so long as all such Permitted Licenses are granted to third parties in the Ordinary Course of Business, do not result in a legal transfer of title to the licensed property, and have been granted in exchange for fair consideration.

Permitted Liens” means:

(a) Liens arising under this Agreement and the other Loan Documents;

(a) Liens existing on the Restatement Date and shown on Schedule 7.5, provided that (i) to the extent the amount of Indebtedness secured by such Lien is limited pursuant to a clause of this defined term, amounts existing on the Restatement Date or any permitted refinancing thereof shall count towards such limit, (ii) to the extent the Indebtedness secured by such a Lien is required to be repaid on the Restatement Date, in accordance with a payoff letter delivered as a condition to closing, such Lien shall not constitute Permitted Lien after the repayment of the associated Indebtedness, and (iii) to the extent any such Lien is required to be made subject to the terms of a Subordination Agreement as of the Restatement Date or thereafter, pursuant to the terms of this Agreement, such Lien shall be permitted only to the extent the applicable Subordination Agreement is in effect;

(b) Liens securing Indebtedness permitted under clause (h) of the defined term “Permitted Indebtedness”; provided (i) any Lien on Equipment acquired or held by a Loan Party or Subsidiary thereof incurred for financing the acquisition of the Equipment is confined to the Equipment acquired, any improvements and accessions thereto and the proceeds thereof, or (ii) any Lien existing on Equipment when acquired is confined to the property and improvements and accessions thereto, and the proceeds thereof;


(c) Liens for taxes, fees, assessments or other government charges or levies, either (i) not yet delinquent or (ii) being contested in good faith and for which such Loan Party or Subsidiary maintains adequate reserves on its books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;

(d) leases or subleases of real property granted in the Ordinary Course of Business of such Person, and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the Ordinary Course of Business of such Person;

(e) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the Ordinary Course of Business so long as such Liens attach only to Inventory and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;

(f) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the Ordinary Course of Business (other than Liens imposed by ERISA);

(g) deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money), leases, surety and appeal bonds and other obligations of a like nature arising in the Ordinary Course of Business;

(h) Liens arising from attachments or judgments, orders, or decrees in circumstances not constituting an Event of Default;

(i) Liens in favor of other financial institutions arising in connection with a Deposit Account or Securities Account of a Loan Party or Subsidiary thereof held at such institutions, provided that Agent has a perfected security interest in such Deposit Account, or the securities maintained therein and Agent has received an Account Control Agreement with respect thereto to the extent required pursuant to Section 6.6 of this Agreement;

(j) easements, covenants, conditions, zoning restrictions, building code and land use requirements of law, encroachments, protrusions, rights of way, restrictions, matters of title listed as exceptions on Schedule B of any title policy, minor defects or irregularities in title and other similar Liens on real property not interfering in any material respect with the ordinary conduct of the business of any Loan Party or any Subsidiary;

(k) Liens of landlords and mortgagees of landlords (i) arising by statute or under any lease or related contractual obligation entered into in the Ordinary Course of Business, provided that such Liens shall be limited to fixtures and movable tangible property located on the real property leased or subleased from such landlord or on security deposits required by the terms of any lease and (ii) for amounts not yet due or that are disputed by appropriate proceedings having the effect of preventing the forfeiture of the subject property;

(l) any interest or title of a lessor or sublessor under any lease or sublease entered into by any Loan Party or any Subsidiary in the Ordinary Course of Business and covering only the assets so leased;

(m) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases or consignments of personal property entered into in the Ordinary Course of Business;


(n) to the extent constituting a Lien, the granting of Permitted Licenses;

(o) any Lien arising under conditional sale, title retention, consignment or similar arrangements for the sale of goods in the Ordinary Course of Business; provided that such Lien attaches only to the goods subject to such sale, title retention, consignment or similar arrangement;

(p) Liens solely on any cash earnest money deposits made by any Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition or other Investment expressly permitted under this Agreement;

(q) Liens granted in the Ordinary Course of Business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted as Permitted Indebtedness;

(r) Liens (i) of a collection bank on items in the course of collection arising under Section 4-210 of the Code or (ii) in favor of a banking or other financial institution arising in the Ordinary Course of Business encumbering deposits or other funds maintained with such financial institution (including the right of setoff) securing ordinary fees in connection with the maintenance of such account and related services and that are within the general parameters customary in the banking industry (and not securing any Indebtedness for borrowed money);

(s) licenses, sublicenses, leases or subleases with respect to any real property or other fixed asset (and excluding, for the avoidance of doubt, Intellectual Property) granted to third Persons in the Ordinary Course of Business, provided that the same do not in any material respect interfere with the business of Borrowers and their Subsidiaries taken as a whole;

(t) Liens on amounts not to exceed $1,000,000 in the aggregate at any time deposited as “security deposits” (or their equivalent) in the Ordinary Course of Business in connection with actions or transactions not prohibited by this Agreement;

(u) Liens solely in respect of cash collateral accounts and amounts deposited therein securing Indebtedness permitted by clause (k)(i) of the defined term “Permitted Indebtedness”;

(v) Liens constituting rights of first refusal or similar contractual rights or restrictions on the Equity Interests of a joint venture pursuant to the applicable joint venture agreement and Liens arising from contractual restrictions arising in connection with agreements to sell the Equity Interests of a joint venture;

(w) Liens on cash collateral (and associated Deposit Accounts maintaining such cash collateral to the extent such Deposit Accounts are used exclusively for such purpose and are identified as such to Agent) securing Indebtedness with respect to letters of credit constituting Permitted Indebtedness;

(x) to the extent constituting a Lien, any restrictions on the provision of services (other than any restriction on Intellectual Property), set forth in customary content license agreements entered into in the Ordinary Course of Business with third parties;

(y) Liens (other than Liens arising under ERISA and Liens on any Intellectual Property) not otherwise permitted pursuant to this definition which secure obligations permitted under this Agreement not exceeding $500,000 in the aggregate at any one time outstanding; and

(z) the modification, replacement, renewal or extension of any Lien permitted by clause (b), of this definition of Permitted Liens; provided that (i) the Lien does not extend to any additional property other than (A) after-acquired property that is affixed or incorporated into the property covered by such Lien, and (B) proceeds and products thereof; and (ii) the renewal, or not prohibited extension or refinancing of the obligations secured or benefited by such Liens is permitted by this definition.


Permitted Seller Debt” means Indebtedness described in clause (e) of the defined term “Permitted Indebtedness”.

Permitted Transfers” means

(a) sales of Inventory by a Loan Party or any of its Subsidiaries in the Ordinary Course of Business;

(b) the granting of Permitted Licenses;

(c) dispositions of worn-out, obsolete or surplus Equipment in the Ordinary Course of Business that is, in the reasonable judgment of such Loan Party or Subsidiary, no longer economically practicable to maintain, used or useful, unmerchantable, or unsaleable;

(d) Transfers consisting of the granting of Permitted Liens and the making of Permitted Investments;

(e) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the Loan Documents;

(f) other Transfers of assets having a fair market value of not more than Two Million Dollars ($2,000,000) per fiscal year;

(g) sales, transfers and other dispositions (including write-offs) of accounts receivable (or notes accepted to evidence same) in connection with the compromise, settlement or collection thereof in the Ordinary Course of Business (exclusive of factoring or similar arrangements);

(h) the lease, assignment, or sub-lease of any real property in the Ordinary Course of Business to the extent the same does not materially interfere with the business of any Loan Party or any Subsidiary;

(i) dispositions (i) by any Borrower to another Borrower, (ii) by any Guarantor to another Loan Party, and (iii) by any Excluded Subsidiary to any other Excluded Subsidiary or any Loan Party;

(j) the abandonment of or failure to renew, preserve or maintain in the Ordinary Course of Business, Intellectual Property (other than Material IP) that is no longer used or useful to Borrowers or their Subsidiaries;

(k) the surrender or waiver of contractual rights or the settlement, release or surrender of contract or torts claims, so long as any such surrender, waiver, settlement or release does not in any material respect interfere with the business of the Loan Parties and their Subsidiaries taken as a whole;

(l) any exchange of fixed assets of the Loan Parties or any of their Subsidiaries which qualifies as a like kind exchange pursuant to and in compliance with Section 1031 of the Code or any other substantially concurrent exchange of property by the Loan Parties of any of their Subsidiaries of another person; provided, that (i) such property is useful to the business of such Loan Party or such Subsidiary, (ii) such Loan Party or such Subsidiary shall receive reasonably equivalent or greater market value for such property (as reasonably determined by the Borrowers in good faith) and (iii) such property will be received by such Loan Party or such Subsidiary transferring the exchanged property substantially concurrently with its delivery of property to be exchanged;

(m) dispositions of qualifying shares and/or other nominal amount of shares of a Foreign Subsidiary to the extent required under applicable law


(n) dispositions of Investments in joint ventures to the extent required by, or pursuant to, customary buy/sell arrangements between the applicable joint venture parties as set forth in the joint venture arrangements or similar binding agreements among such joint venture parties;

(o) dispositions consisting of distributions permitted by Section 7.7; and

(p) the unwinding of any Hedge Agreement.

Notwithstanding anything to the contrary herein, in no event shall the sale, assignment, investment, distribution, dividend, exclusive licensing, transfer or other disposition, of Material IP to any Person that is not a Loan Party organized within the United States (excluding Holdings) constitute a Permitted Transfer.

Person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

PIK Amount” means as of any date of determination the amount of all interest or fees accrued with respect to the Term Loans that has been paid-in-kind by being added to the balance thereof in accordance with Section 2.3(a).

Prepayment Fee” has the meaning set forth in Section 2.4(b).

Prime Rate” means, at any time, the greater of (i) the rate of interest noted in The Wall Street Journal, Money Rates section, as the “Prime Rate”, and (ii) 4.00%. In the event that The Wall Street Journal quotes more than one rate, or a range of rates, as the Prime Rate, then the Prime Rate shall mean the average of the quoted rates. In the event that The Wall Street Journal ceases to publish a Prime Rate, then the Prime Rate shall be the average of the prime rate specified by the three (3) largest U.S. money center commercial banks, as determined by Agent.

Pro Rata Share” means, with respect to any Lender and as of any date of determination, the percentage obtained by dividing (i) the aggregate Loans of such Lender by (ii) the aggregate Loans of all Lenders, provided further, that with respect to all matters relating to a particular Loan, the outstanding balance of the applicable Loan, shall be used in lieu of the aggregate outstanding balance of all Loans in the foregoing calculation. “Ratable” and related terms shall mean, determined by reference to such Lender’s Pro Rata Share.

Protective Advances” has the meaning set forth in Section 9.3.

Quarterly Average ARR” means, for any particular quarter, the sum of ARR measured as of the last day of each month within such quarter, divided by 3 and calculated in a manner consistent with the calculation delivered to the Lenders prior to the Restatement Date.

Qualified Equity Interests” means and refers to any Equity Interests issued by Holdings (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

Register” has the meaning set forth in Section 12.2(f).

Registered Organization” means any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.

Required Lenders” shall mean (i) the holders of at least 70% of the Restatement Date Incremental Loans and any Incremental Term Loans and (ii) at least two unaffiliated Lenders.

Requirement of Law” means as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.


Responsible Officer” means with respect to any Person, any of the Chief Executive Officer, President or Chief Financial Officer of such Person. Unless the context otherwise requires, each reference to a Responsible Officer herein shall be a reference to a Responsible Officer of Holdings.

Restatement Agreement” means that certain Amendment and Restatement Agreement, dated as of the Restatement Date, by and among Borrowers, Guarantors, Lenders and Agent.

Restatement Date” is defined in the preamble hereto.

Restatement Date Commitment Letter” means that certain Incremental Commitment Letter dated as of May 9, 2022 from Agent, ORIX Growth Capital, LLC, Clover Orochi LLC and ACM ASOF VIII SAAS Finco LLC and accepted and agreed to by the Borrower Representative.

Restatement Date Equity Contribution” means the contribution of cash proceeds to Holdings by new or existing shareholders, limited partners, board members, management or other investors substantially concurrently with the consummation of the Restatement Date Merger.

Restatement Date Fee Letter” means that certain Incremental Fee Letter dated as of May 9, 2022 from Agent, ORIX Growth Capital, LLC, Clover Orochi LLC and ACM ASOF VIII SAAS Finco LLC and accepted and agreed to by the Borrower Representative.

Restatement Date Final Payment” means a payment (in addition to and not a substitution for the regular monthly payments of principal plus accrued interest) equal to $6,375,000.

Restatement Date Flow of Funds Agreement” means the flow of funds agreement delivered as of the Restatement Date.

Restatement Date Incremental Term Loans” means the Term Loans made on the Restatement Date in accordance with Section 2.2(a).

Restatement Date Merger” means the merger of Parent with Merger Sub pursuant to the Restatement Date Merger Agreement, resulting in Parent being the surviving corporation and continuing its existence pursuant to the Restatement Date Merger Agreement as a wholly-owned subsidiary of Holdings.

Restatement Date Merger Agreement” means that certain Agreement and Plan of Merger, dated as of November 7, 2021 by and among Parent, Merger Sub and Holdings as amended through the Restatement Date.

Restatement Date Redemptions” means the redemptions of any shares of Class A Common Stock of Holdings of shareholders who timely exercised rights of redemption with respect thereto substantially concurrently with the consummation of the Restatement Date Merger.

Restatement Date Refinancing” means that certain refinancing of the First Out Term Loans (as defined in the Existing Credit Agreement) including all accrued interest and fees thereon, subject to any modification as set forth herein), discharge of the Last Out Term Loans (as defined in the Existing Credit Agreement) (including all accrued interest and fees thereon), and discharge (including by way of conversion of any convertible notes) of any outstanding Subordinated Debt for borrowed money or other convertible notes, except for Subordinated Debt and other convertible notes in an aggregate outstanding principal amount not in excess of $15,000,000.

Restatement Date Transactions” means collectively, the effectiveness of the Restatement Agreement, the making of the Restatement Date Incremental Term Loans, the Restatement Date Refinancing, the consummation of the Restatement Date Equity Contribution and the Restatement Date Redemptions, the payment (or, for purposes of determining satisfaction of the Minimum Liquidity Condition, deduction) of all Restatement Date Transaction Costs.


Restatement Date Transaction Costs” means the fees, premiums, expenses and other transaction costs incurred through closing of the Restatement Date Merger and otherwise in connection with the Restatement Date Transactions.

Restricted License” means any technology or Intellectual Property license granted to a Loan Party or a Subsidiary (i) that is a necessary part of the products, services and platform offered by such Loan Party or its Subsidiary for generating material revenue and would be infringed upon by such products, services, and platform but for such license granted, (ii) that prohibits or otherwise restricts such Loan Party or Subsidiary from granting a security interest in the Loan Party or its Subsidiary’s interest in such license or that results in a breach or termination of such license upon granting of such security interest and (iii) for which there is no reasonable and readily available substitute.

Revenue” means revenue, in accordance with GAAP, excluding the impact of any acquisition accounting requirements pursuant to GAAP, of Holdings and each of its Subsidiaries, on a consolidated basis.

Sanctioned Entity” means (a) a country or territory or a government of a country or territory, (b) an agency of the government of a country or territory, (c) an organization directly or indirectly controlled by a country or territory or its government, or (d) a Person resident in or determined to be resident in a country or territory, in each case of clauses (a) through (d) that is a target of Sanctions, including a target of any country sanctions program administered and enforced by OFAC.

Sanctioned Person” means, at any time (a) any Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated Non-SDN list or any other Sanctions-related list maintained by any Governmental Authority, (b) a Person or legal entity that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf of any such Person or Persons described in clauses (a) through (c) above.

Sanctions” means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by OFAC, the U.S. Department of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) the United Nations Security Council, (c) the European Union or any European Union member state, (d) Her Majesty’s Treasury of the United Kingdom, or (e) any other Governmental Authority with jurisdiction over any Lender or any Loan Party or any of their respective Subsidiaries or Affiliates.

Securities Account” means any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

Security Agreement” means that certain Amended and Restated Security Agreement, dated as of the Closing Date, among the Loan Parties party thereto as grantors and the Agent.

Security Instrument” means any security agreement, assignment, pledge agreement, financing or other similar statement or notice, continuation statement, other agreement or instrument, or any amendment or supplement to any thereof, creating, governing or providing for, evidencing or perfecting any security interest or Lien.

Shares” means all of the issued and outstanding Equity Interests owned or held of record by a Loan Party or other Loan Party in each of its Subsidiaries.

Solvent” means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Person’s debts (including contingent liabilities) is less than all of such Person’s assets, (b) such Person is not engaged or about to engage in a business or transaction for which the remaining assets of such Person are unreasonably small in relation to the business or transaction or for which the property remaining with such Person is an unreasonably small capital, (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d)


such Person is “solvent” or not “insolvent”, as applicable within the meaning given those terms and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

Solvency Certificate” means the solvency certificate of Parent, certifying that after giving effect to the Restatement Date Transactions, Holdings and its Subsidiaries on a consolidated basis are solvent) in substantially the form of Exhibit H, attached hereto.

Specified Merger Agreement Representations” means such of the representations and warranties made by, or with respect to, Parent and its subsidiaries and businesses in the Restatement Date Merger Agreement as are material to the interests of Lenders, but only to the extent that Parent or its applicable Affiliates has the right (taking into account any applicable cure periods) to terminate its or their respective obligations under the Restatement Date Merger Agreement or decline to consummate the Restatement Date Merger (in accordance with the terms thereof) as a result of a breach of such representations in the Restatement Date Merger Agreement without any liability to Parent or its applicable Affiliate.

Specified Representations” means relating to organizational existence of the Loan Parties; organizational power and authority (in each case, solely as to execution, delivery and performance of the Loan Documents); due authorization, execution and delivery and enforceability of the Loan Documents; no conflicts with organizational documents of the Loan Parties (in each case, solely as it relates to the borrowing under, guaranteeing under, performance of, and granting of security interests in the Collateral pursuant to, the Loan Documents); Solvency as of the Restatement Date (after giving effect on a pro forma basis to the Restatement Date Transactions) of Holdings and its subsidiaries on a consolidated basis; Federal Reserve margin regulations, the Patriot Act, the use of proceeds of the Restatement Date Incremental Term Loans not violating OFAC or the FCPA; the Investment Company Act, creation, validity and perfection of security interests in the Collateral; and absence of any Event of Default resulting from non-payment of fees then due and any Event of Default from an insolvency proceeding.

Subordinated Debt” means Indebtedness (including unsecured notes that are convertible into Equity Interests (other than Disqualified Equity Interests)) incurred by a Loan Party that is subordinated in writing to all of the Obligations pursuant to a Subordination Agreement, provided that (x) such Indebtedness shall not require any payments in cash or other property (including, without limitation, for principal, interest, fees or premiums) prior to the date that is at least 91 days following the Term Loan Maturity Date, and (y) the maturity date of such Indebtedness shall be at least 91 days following the Term Loan Maturity Date, in each case except for payments of cash in lieu of fractional shares of Equity Interests upon conversion into Equity Interests (other than Disqualified Equity Interests).

Subordination Agreement” means any subordination agreement in form and substance satisfactory to Required Lenders entered into from time to time.

Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company or joint venture in which (i) any general partnership interest or (ii) more than fifty percent (50%) of the stock, limited liability company interest, joint venture interest or other Equity Interest which by the terms thereof has the ordinary voting power to elect the Board of that Person, at the time as of which any determination is being made, is owned or controlled by such Person, directly or indirectly. Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a direct or indirect Subsidiary of Holdings.

Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Term Loan” means, collectively, any Restatement Date Incremental Term Loan and any Incremental Term Loan.


Term Loan Maturity Date” means July 15, 2027.

Trademarks” means any and all trademarks, trade names, registered trademarks, trademark applications, service marks, registered service marks and service mark applications, including (A) all renewals thereof, (B) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions thereof, (C) the right to sue for past, present and future infringements and dilutions thereof, (D) the goodwill of such Peron’s business symbolized by the foregoing or connected therewith, and (E) all rights corresponding thereto throughout the world.

Transfer” means defined in Section 7.1.

Trust Account” means the account established by Holdings for the benefit of its public shareholders pursuant to the Investment Management Trust Agreement, dated as of October 28, 2020, by and between Holdings and Continental Stock Transfer & Trust Company.

Trust/Backstop Condition” means that substantially concurrently with the consummation of the Restatement Date Merger, Holdings shall have received proceeds from either (i) the Trust Account and/or (ii) the Backstop Agreement and the sum of the amounts received pursuant to the foregoing clauses (i) and (ii), net of amounts used to satisfy Restatement Date Redemptions shall be at least $175,000,000.


EXHIBIT B

[RESERVED]


EXHIBIT C

COMPLIANCE CERTIFICATE

[***]


APPENDIX 1

FINANCIAL COVENANT CALCULATIONS

[***]


EXHIBIT D

REQUIREMENTS FOR INSURANCE DOCUMENTATION

[***]


EXHIBIT E

AUTOMATIC PAYMENT AUTHORIZATION

[***]


EXHIBIT F

FORM OF

SECURED PROMISSORY NOTE

[***]


EXHIBIT G

FORM OF ASSIGNMENT AGREEMENT

[***]


EXHIBIT H

FORM OF SOLVENCY CERTIFICATE

[***]


SCHEDULE I

PART A – TERM LOANS OUTSTANDING UNDER THE EXISTING CREDIT AGREEMENT

[***]

PART B – RESTATEMENT DATE INCREMENTAL TERM LOAN COMMITTMENTS

[***]

PART C – AMORTAIZATION SCHEDULE

[***]


SCHEDULE 2

DELIVERABLES

[***]


SCHEDULE 3

TAXES; INCREASED COSTS

[***]


SCHEDULE 6.10(C)

MINIMUM QUARTERLY AVERAGE ARR – COVENANT LEVELS

[***]


Schedule 5.9

Taxes

[***]


Schedule 5.16

Indebtedness

[***]


Schedule 7.5

Liens

[***]


Schedule 7.7

Investments

[***]


Schedule 7.8

Transactions with Affiliates

[***]


EXHIBIT B

Supplemental Schedules to the Security agreement

[***]


SCHEDULE 1

COMMERCIAL TORT CLAIMS

[***]


SCHEDULE 2

COPYRIGHTS

[***]


SCHEDULE 3

INTELLECTUAL PROPERTY LICENSES

[***]


SCHEDULE 4

PATENTS

[***]


SCHEDULE 5

PLEDGED COMPANIES

[***]


SCHEDULE 6

TRADEMARKS

[***]


SCHEDULE 7

NAME; CHIEF EXECUTIVE OFFICE; TAX IDENTIFICATION NUMBERS AND ORGANIZATIONAL NUMBERS

 

Name

  

Chief Executive Office

  

Tax Identification

Number

  

Organizational
Number

FiscalNote Holdings, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
FiscalNote, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
VoterVoice, L.L.C.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
CQ-Roll Call, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
Capitol Advantage LLC   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
FiscalNote Intermediate Holdco, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
FiscalNote Holdings II, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
Sandhill Strategy LLC   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
FactSquared, LLC   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
Fireside 21, LLC   

Suite 400 South of 409 7th Street, NW

Washington, DC 20004

   [***]    [***]
The Oxford Analytica International Group, LLC   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
Oxford Analytica, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
FiscalNote Boards LLC   

10300 Springdale Road

Austin, TX 78754

   [***]    [***]
Predata, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]


Name

  

Chief Executive Office

  

Tax Identification

Number

  

Organizational
Number

Curate Solutions, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
Forge.AI, Inc.   

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]
Frontier Strategy Group LLC   

1140 Connecticut Ave

NW

Washington, DC 20036

   [***]    [***]


SCHEDULE 8

OWNED REAL PROPERTY

[***]


SCHEDULE 9

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS

[***]


SCHEDULE 10

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

[***]

Exhibit 10.8

***Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and is the type the registrant treats as private or confidential. Such omitted information is indicated by brackets (“[***]”) in this exhibit.***

AMENDED AND RESTATED SECURITY AGREEMENT

This AMENDED AND RESTATED SECURITY AGREEMENT (this “Agreement”), dated as of October 19, 2020, by and among the Persons listed on the signature pages hereof as “Grantors” and those additional entities that hereafter become parties hereto by executing the form of Joinder attached hereto as Annex 1 (each, a “Grantor” and collectively, the “Grantors”), and RUNWAY GROWTH CREDIT FUND INC., in its capacity as administrative agent and collateral agent for the Lenders (in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit and Guaranty Agreement, dated as of August 20, 2018 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among FISCALNOTE, INC., a Delaware corporation (“Borrower Representative”), CQ-ROLL CALL, INC., a Delaware corporation, CAPITOL ADVANTAGE LLC, a Virginia corporation, VOTERVOICE, L.L.C., a Louisiana limited liability company, SANDHILL STRATEGY LLC, a District of Columbia limited liability company, and each other Person party hereto as a borrower from time to time (collectively, jointly and severally, “Borrowers”, and each, a “Borrower”), FISCALNOTE HOLDINGS, INC., a Delaware corporation (“Parent”), FISCALNOTE HOLDINGS II, INC., a Delaware corporation (together with Parent and each other Person party thereto as a guarantor from time to time collectively, “Guarantors”, and each, a “Guarantor”), the lenders from time to time party thereto (collectively, the “Lenders”, and each, a “Lender”), and Agent, the Lenders have agreed to make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof; and

WHEREAS, Agent has agreed to act as agent for the benefit of the Lenders in connection with the transactions contemplated by the Credit Agreement and this Agreement;

WHEREAS, the Grantors and MidCap Financial Trust, as administrative agent (the “Existing Agent”), are parties to that certain Security and Pledge Agreement dated as of August 20, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the “Existing Security Agreement”);

WHEREAS, pursuant to that certain Agency Transfer and Subagency Agreement, the Existing Agent has assigned to Agent its role as administrative agent and collateral agent under the Existing Security Agreement;

WHEREAS, each party to the Existing Security Agreement (including, for the avoidance of doubt, Agent as Existing Agent’s assignee) desires to amend and restate the Existing Security Agreement in its entirety on the terms and conditions set forth herein, it being understood that no novation of the obligations under the Existing Security Agreement is being effected hereby, but merely an amendment and restatement in accordance with the terms hereof;

WHEREAS, in order to induce the Lenders to enter into the Credit Agreement and the other Loan Documents and to extend the Loans thereunder and to induce the Lenders to make financial accommodations to Borrowers as provided for in the Credit Agreement and the other Loan Documents, each Grantor has agreed to grant to Agent, for the benefit of the Lenders, a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, the Obligations; and

WHEREAS, each Grantor (other than any Borrower) is an Affiliate or a Subsidiary of each Borrower and, as such, will benefit by virtue of the financial accommodations extended to Borrowers by the Lenders.

NOW, THEREFORE, for and in consideration of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree to amend and restate the Existing Security Agreement as follows:


1. Definitions; Construction.

(a) All initially capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement. Any terms (whether capitalized or lower case) used in this Agreement that are defined in the Code (including, without limitation, Account, Account Debtor, Chattel Paper, Commercial Tort Claims, Deposit Account, Drafts, Documents, Equipment, Fixtures, General Intangibles, Inventory, Investment Property, Instruments, letters of credit, Letter of Credit Rights, promissory notes, Proceeds, Securities Account and Supporting Obligations) shall be construed and defined as set forth in the Code unless otherwise defined herein or in the Credit Agreement; provided, that to the extent that the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern. In addition to those terms defined elsewhere in this Agreement, as used in this Agreement, the following terms shall have the following meanings:

(i) “Acquisition Documents” means the agreements, instruments and documents evidencing, or entered into in connection with, an Acquisition (including a Permitted Acquisition) by a Grantor.

(ii) “Agent” has the meaning specified therefor in the preamble to this Agreement.

(iii) “Agreement” has the meaning specified therefor in the preamble to this Agreement.

(iv) “Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.

(v) “Books” means books and records (including each Grantor’s Records indicating, summarizing, or evidencing such Grantor’s assets (including the Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s business operations or financial condition, and each Grantor’s goods or General Intangibles related to such information).

(vi) “Borrower” and “Borrowers” have the respective meanings specified therefor in the recitals to this Agreement.

(vii) “CFC” means a “controlled foreign corporation” as defined in Section 957 of the Internal Revenue Code.

(viii) “CFC Debt” means indebtedness (and any amounts treated as indebtedness for U.S. federal income tax purposes) or receivables owed by, or treated for U.S. federal income tax purposes as owed by, a CFC.

(ix) “CFC Holdco” means a Subsidiary (i) substantially all of the direct or indirect assets of which consist of (x) Equity Interests of one or more CFCs and (y) CFC Debt and/or other assets incidental to the purpose of acting as a holding company of one or more CFCs (or are treated as consisting of such assets for U.S. federal income tax purposes), and (ii) that does not conduct any business or activity other than ownership of such Equity Interests, CFC Debt or incidental assets (and activities incidental thereto) and does not itself incur, and is not otherwise liable for, any indebtedness or other liabilities (other than liabilities incidental to the ownership of Equity Interests, CFC Debt or incidental assets (including, for the avoidance of doubt, tax liabilities attributable to such ownership), and franchise fees or similar taxes and fees and expenses incurred to maintain its existence and other de minimis liabilities); provided, further, that a CFC Holdco shall be a “CFC Holdco” only for so long as it meets each of requirements of the foregoing definition.

(x) “Collateral” has the meaning specified therefor in Section 3 hereof.

(xi) “Commercial Tort Claims” means commercial tort claims (as that term is defined in the Code), and includes those commercial tort claims listed on Schedule 1.

 

2


(xii) “Controlled Account” has the meaning specified therefor in Section 7(k) hereof.

(xiii) “Controlled Account Agreements” means those certain cash management agreements, in form and substance reasonably satisfactory to Agent, each of which is executed and delivered by a Grantor, Agent, and one of the Controlled Account Banks.

(xiv) “Controlled Account Bank” has the meaning specified therefor in Section 7(k) hereof.

(xv) “Copyright Security Agreement” means each Copyright Security Agreement executed and delivered by Grantors, or any of them, and Agent, in substantially the form of Exhibit A.

(xvi) “Copyrights” means any and all rights in any works of authorship, including (A) copyrights and moral rights, (B) copyright registrations and recordings thereof and all applications in connection therewith including those listed on Schedule 2, (C) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (D) the right to sue for past, present, and future infringements thereof, and (E) all of each Grantor’s rights corresponding thereto throughout the world.

(xvii) “Credit Agreement” has the meaning specified therefor in the recitals to this Agreement.

(xviii) “Disregarded Entity” shall mean an entity that is a “qualified subchapter S subsidiary” within the meaning of IRC Section 1361(b)(3)(B) or otherwise treated as an entity disregarded as an entity separate from its owner within the meaning of Treas. Reg. 301.7701-3(a).

(xix) “Excluded Assets” means (i) any real property with a fair market value under $1,000,000 individually and all leasehold interests in real property, (ii) any Equipment subject to a purchase money security interest, capital lease or similar arrangement, in each case, to the extent permitted under the Loan Documents, to the extent that a grant of a security interest in such property would (A) violate, invalidate or terminate such arrangement or (B) create a right of termination in favor of any party thereto (other than a Grantor or any of its Affiliates), (iii) any asset (including any contract, agreement, permit, lease or license, any governmental licenses or state or local franchises, charters or authorizations) to the extent the pledge thereof or the grant of security interests (in each case in the manner contemplated by the Loan Documents) in such asset (A) is prohibited by the terms of such contract, agreement, permit, lease or license, (B) requires the consent, approval, license or other authorization of a governmental authority or any other third party, in each case, that has not been obtained, (C) violates applicable law, (D) results in the termination of such arrangement, (E) creates a right of termination or acceleration in favor of any party thereto (other than a Grantor or any of its Affiliates) or (F) would otherwise adversely alter such Grantor’s rights, title and interests thereunder (provided that, (x) such requirement of consent, approval, license or other authorization existed at the time of the acquisition of such asset and was not incurred in contemplation thereof, (y) such acquisition was permitted by the Loan Documents, and (z) the Grantors shall use commercially reasonable efforts (which shall not require the payment of material fees or other material compensation) to obtain, or not include at the time of such acquisition, any such consent, approval, license or other authorization or a waiver of any such prohibitions), (iv) Excluded Accounts, (v) any intent-to-use United States trademark applications for which a statement of use has not been filed with and duly accepted by the United States Patent and Trademark Office (to the extent that, and solely during the period in which, the grant of a security interest would impair the validity or enforceability of such intent-to-use United States trademark application under federal law), (vi) Excluded Tax Collateral, (vii) Equity Interests (A) in a joint venture or other non-wholly-owned Subsidiary to the extent that granting a security interest in or Lien on such Equity Interest is not permitted by the governing documents of such joint venture or other non-wholly-owned Subsidiary (other than any Grantor or its Subsidiaries) which consent has not been obtained (so long as such prohibition did not arise as part of the acquisition or formation thereof or in anticipation of the Loans) or (B) that is Margin Stock to the extent a security interest therein would violate the provisions of the regulations of the Federal

 

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Reserve Board (including Regulation T, Regulation U or Regulation X), and (viii) any other exceptions agreed in writing in Agent’s sole discretion; provided that, (A) the foregoing exclusions set forth in clauses (ii), (iii), and (vii)(A) shall in no way be construed to apply to the extent that any described prohibition or restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the Code or other applicable law, (B) the foregoing exclusions set forth in clauses (ii), (iii), and (vii)(A) shall not apply in the event of a termination or elimination of any such exclusion, prohibition, requirement for any consent or other requirement, or violation contained in such contract, agreement, permit, lease or license or in any applicable law, to the extent sufficient to permit any such item to become Collateral, (C) the foregoing exclusions set forth in clauses (ii), (iii), and (vii)(A) shall not apply upon the granting of any such consent, approval, license or other authorization or waiving or terminating any requirement for such consent, approval, license or other authorization of a security interest in such contract, agreement, permit, lease or license will be automatically and simultaneously granted hereunder and such contract, agreement, permit, lease or license will be included as Collateral and (D) none of the foregoing exclusions set forth in clauses (i)-(viii) above shall apply with respect to Proceeds or receivables of the assets referred to in such exclusions (unless such Proceeds or receivables independently constitute Excluded Assets).

(i) “Excluded Tax Collateral” means (a) Equity Interests in any CFC or CFC Holdco that is in excess of 65% of the total outstanding voting Equity Interests of such CFC or CFC Holdco, as applicable, (b) Equity Interests in any Disregarded Entity that owns Equity Interests in a CFC Holdco and/or CFC that is in excess of 65% of the total outstanding voting Equity Interests of such Disregarded Entity, (c) any assets owned directly or indirectly by a CFC and (d) CFC Debt, in each case, solely to the extent Borrower Representative has delivered evidence to Agent that a pledge of such assets would result in material adverse tax consequences (it being understood, for the avoidance of doubt and notwithstanding anything to the contrary, that to the extent a pledge of such CFC Debt would result in material adverse tax consequences, such assets will constitute Excluded Tax Collateral as of the date hereof).

(ii) “Existing Security Agreement” has the meaning specified therefor in the recitals to this Agreement.

(iii) “General Intangibles” means general intangibles (as that term is defined in the Code), and includes payment intangibles, software, contract rights, rights to payment, rights under Hedge Agreements (including the right to receive payment on account of the termination (voluntarily or involuntarily) of such Hedge Agreements), rights arising under common law, statutes, or regulations, choses or things in action, goodwill, Intellectual Property, Intellectual Property Licenses, purchase orders, customer lists, route lists, rights to payment and other rights under Acquisition Documents, rights to payment and other rights under any royalty or licensing agreements, including Intellectual Property Licenses, infringement claims, monies due or recoverable from pension funds, pension plan refunds, pension plan refund claims, insurance premium rebates, tax refunds, and tax refund claims, interests in a partnership or limited liability company which do not constitute a security under Article 8 of the Code, and any other personal property other than Commercial Tort Claims, money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Property, Negotiable Collateral, and oil, gas, or other minerals before extraction.

(iv) “Grantor” and “Grantors” have the respective meanings specified therefor in the preamble to this Agreement.

(v) “Intellectual Property” means any and all Patents, Copyrights, Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms, software programs (including source code and object code), processes, product designs, industrial designs, blueprints, drawings, data, customer lists, URLs and domain names, specifications, documentations, reports, catalogs, literature, and any other forms of technology or proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof.

(vi) “Intellectual Property Licenses” means, with respect to any Grantor, (A) any licenses or other similar rights provided to such Grantor in or with respect to Intellectual Property owned or controlled by any other Person, and (B) any licenses or other similar rights provided to any other Person in or with respect to Intellectual Property owned or controlled by such Grantor, in each case, including (x) any software license agreements

 

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(other than license agreements for commercially available off-the-shelf software that is generally available to the public which have been licensed to a Grantor pursuant to end-user licenses), (y) the license agreements listed on Schedule 3, and (z) the right to use any of the licenses or other similar rights described in this definition in connection with the enforcement of Agent’s and Lenders’ rights under the Loan Documents.

(vii) “Investment Property” means (A) any and all investment property, and (B) any and all of the following (regardless of whether classified as investment property under the Code): all Pledged Interests, Pledged Operating Agreements, and Pledged Partnership Agreements.

(viii) “Joinder” means each Joinder to this Agreement executed and delivered by Agent and each of the other parties listed on the signature pages thereto, in substantially the form of Annex 1.

(ix) “Lender” and “Lenders” have the respective meanings specified therefor in the recitals to this Agreement.

(x) “Negotiable Collateral” means letters of credit, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), instruments, promissory notes, drafts and documents (as each such term is defined in the Code).

(xi) “Parent” has the meaning specified therefor in the recitals to this Agreement.

(xii) “Patent Security Agreement” means each Patent Security Agreement executed and delivered by Grantors, or any of them, and Agent, in substantially the form of Exhibit B.

(xiii) “Patents” means patents and patent applications, including (A) the patents and patent applications listed on Schedule 4, (B) all continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon, (C) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (D) the right to sue for past, present, and future infringements thereof, and (E) all of each Grantor’s rights corresponding thereto throughout the world.

(xiv) “Pledged Companies” means each Person listed on Schedule 5 as a “Pledged Company”, together with each other Person, all or a portion of whose Equity Interests are acquired or otherwise owned by a Grantor after the Closing Date and is required to be pledged pursuant to Section 5.11 of the Credit Agreement.

(xv) “Pledged Interests” means all of each Grantor’s right, title and interest in and to all of the Equity Interests now owned or hereafter acquired by such Grantor, regardless of class or designation, including in each of the Pledged Companies, and all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including any certificates representing the Equity Interests, the right to receive any certificates representing any of the Equity Interests, all warrants, options, share appreciation rights and other rights, contractual or otherwise, in respect thereof and the right to receive all dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and all cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing.

(xvi) “Pledged Interests Addendum” means a Pledged Interests Addendum substantially in the form of Exhibit C.

(xvii) “Pledged Notes” has the meaning specified therefor in Section 6(i) hereof.

 

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(xviii) “Pledged Operating Agreements” means all of each Grantor’s rights, powers, and remedies under the limited liability company operating agreements of each of the Pledged Companies that are limited liability companies.

(xix) “Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of the Pledged Companies that are partnerships.

(xx) “Proceeds” has the meaning specified therefor in Section 3 hereof.

(xxi) “PTO” means the United States Patent and Trademark Office.

(xxii) “Real Property” means any estates or interests in real property now owned or hereafter acquired by any Grantor and the improvements thereto.

(xxiii) “Record” means information that is inscribed on a tangible medium or which is stored in an electronic or other medium and is retrievable in perceivable form.

(xxiv) “Security Interest” has the meaning specified therefor in Section 3 hereof.

(xxv) “Supporting Obligations” means supporting obligations (as such term is defined in the Code), and includes letters of credit and guaranties issued in support of Accounts, Chattel Paper, documents, General Intangibles, instruments or Investment Property.

(xxvi) “Trademark Security Agreement” means each Trademark Security Agreement executed and delivered by Grantors, or any of them, and Agent, in substantially the form of Exhibit D.

(xxvii) “Trademarks” means any and all trademarks, trade names, registered trademarks, trademark applications, service marks, registered service marks and service mark applications, including (A) the trade names, registered trademarks, trademark applications, registered service marks and service mark applications listed on Schedule 6, (B) all renewals thereof, (C) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions thereof, (D) the right to sue for past, present and future infringements and dilutions thereof, (E) the goodwill of each Grantor’s business symbolized by the foregoing or connected therewith, and (F) all of each Grantor’s rights corresponding thereto throughout the world.

(xxviii) “URL” means “uniform resource locator,” an internet web address.

(b) This Agreement shall be subject to the rules of construction set forth in Section 1 of the Credit Agreement, and such rules of construction are incorporated herein by this reference, mutatis mutandis.

(c) All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

2. [Reserved].

3. Grant of Security. Each Grantor hereby unconditionally grants, collaterally assigns, and pledges to Agent, for the benefit of each Lender, to secure the Obligations (whether now existing or hereafter arising), a continuing security interest (hereinafter referred to as the “Security Interest”) in all of such Grantor’s right, title, and interest in and to the following properties, assets and rights, and in all similar properties, assets and rights that the Grantor has or is deemed by law to have rights in or the power to convey rights in, wherever located and whether such right, title and interest of the Grantor therein is now existing or hereafter arising (the “Collateral”):

(a) all of such Grantor’s Accounts;

 

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(b) all of such Grantor’s Books;

(c) all of such Grantor’s Chattel Paper (whether tangible or electronic);

(d) all of such Grantor’s Commercial Tort Claims listed on Schedule 1;

(e) all of such Grantor’s Deposit Accounts;

(f) all of such Grantor’s Equipment;

(g) all of such Grantor’s Fixtures;

(h) all of such Grantor’s General Intangibles;

(i) all of such Grantor’s Inventory;

(j) all of such Grantor’s Investment Property;

(k) all of such Grantor’s Intellectual Property and Intellectual Property Licenses;

(l) all of such Grantor’s Negotiable Collateral (including all of such Grantor’s Pledged Notes);

(m) all of such Grantor’s Pledged Interests (including all of such Grantor’s Pledged Operating Agreements and Pledged Partnership Agreements);

(n) all of such Grantor’s Securities Accounts;

(o) all of such Grantor’s Supporting Obligations;

(p) all of such Grantors goods, contract rights or rights to payment of money, leases, license agreements, franchise agreements, documents, financial assets;

(q) all of such Grantor’s money, Cash Equivalents, or other assets of such Grantor that now or hereafter come into the possession, custody, or control of Agent (or its agent or designee) or any Lender; and

(r) all of the Proceeds and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, Fixtures, General Intangibles, Inventory, Investment Property, Intellectual Property, Negotiable Collateral, Pledged Interests, Securities Accounts, Supporting Obligations, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to any of the foregoing (the “Proceeds”). Without limiting the generality of the foregoing, the term “Proceeds” includes whatever is receivable or received when Investment Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to any Grantor or Agent from time to time with respect to any of the Investment Property.

Notwithstanding anything to the contrary contained herein, Collateral shall not include Excluded Assets.

 

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4. Security for Obligations. The Security Interest created hereby secures the payment and performance of the Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by Grantors, or any of them, to Agent, the Lenders, or any of them, but for the fact that they are unenforceable or not allowable (in whole or in part) as a claim in an Insolvency Proceeding involving any Grantor due to the existence of such Insolvency Proceeding. Further, the Security Interest created hereby encumbers each Grantor’s right, title, and interest in all Collateral, whether now owned by such Grantor or hereafter acquired, obtained, developed, or created by such Grantor and wherever located.

5. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each of the Grantors shall remain liable under the contracts and agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Agent or any Lender of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) none of the Lenders shall have any obligation or liability under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall any Lender be obligated to perform any of the obligations or duties of any Grantors thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. Until an Event of Default shall occur and be continuing, except as otherwise provided in this Agreement, the Credit Agreement, or any other Loan Document, Grantors shall have the right to possession and enjoyment of the Collateral for the purpose of conducting the ordinary course of their respective businesses, subject to and upon the terms hereof and of the Credit Agreement and the other Loan Documents. Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership of the Pledged Interests, including all voting, consensual, dividend, and distribution rights, shall remain in the applicable Grantor until (i) the occurrence and continuance of an Event of Default, and (ii) Agent has notified the applicable Grantor of Agent’s election to exercise such rights with respect to the Pledged Interests pursuant to Section 16.

6. Representations and Warranties. In order to induce Agent to enter into this Agreement for the benefit of the Lenders, each Grantor makes the following representations and warranties to Agent and the Lenders which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date:

(a) The name (within the meaning of Section 9-503 of the Code) and jurisdiction of organization of each Grantor is set forth on Schedule 7 (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under the Loan Documents).

(b) The chief executive office of each Grantor is located at the address indicated on Schedule 7 (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under the Loan Documents).

(c) Each Grantor’s tax identification numbers and organizational identification numbers, if any, are identified on Schedule 7 (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under the Loan Documents).

(d) As of the Closing Date, no Grantor holds any commercial tort claims that exceed $500,000 individually or $1,000,000 in the aggregate, except as set forth on Schedule 1.

(e) Set forth on Schedule 9 (as such Schedule may be updated from time to time subject to Section 7(k) with respect to Controlled Accounts and provided that Grantors comply with Section 7(c) hereof) is a listing of all of Grantors’ Deposit Accounts and Securities Accounts, including, with respect to each bank or securities intermediary (i) the name and address of such Person, and (ii) the account numbers of the Deposit Accounts or Securities Accounts maintained with such Person.

 

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(f) Schedule 8 sets forth all Real Property owned by any of the Grantors as of the Closing Date.

(g) As of the Closing Date: (i) Schedule 2 provides a complete and correct list of all registered Copyrights owned by any Grantor, all applications for registration of Copyrights owned by any Grantor, and all other Copyrights owned by any Grantor and material to the conduct of the business of any Grantor (other than registered Copyrights with respect to periodic publications and articles published in the ordinary course of business), (ii) Schedule 3 provides a complete and correct list of all material Intellectual Property Licenses entered into by any Grantor pursuant to which (A) any Grantor has provided any license or other rights in Intellectual Property owned or controlled by such Grantor to any other Person (other than non-exclusive software licenses granted in the ordinary course of business), or (B) any Person has granted to any Grantor any license or other rights in Intellectual Property owned or controlled by such Person that is material to the business of such Grantor, including any Intellectual Property that is incorporated in any Inventory, software, or other product marketed, sold, licensed, or distributed by such Grantor (other than off-the-shelf, shrink-wrapped or “click to accept” software licenses or other licenses to generally commercially available software), (iii) Schedule 4 provides a complete and correct list of all Patents owned by any Grantor and all applications for Patents owned by any Grantor, and (iv) Schedule 6 provides a complete and correct list of all registered Trademarks owned by any Grantor, and all applications for registration of Trademarks owned by any Grantor.

(h) (i) (A) each Grantor owns exclusively or holds licenses in all Intellectual Property that is necessary in or material to the conduct of its business, and (B) all employees and contractors of each Grantor who were involved in the creation or development of any Intellectual Property for such Grantor that is necessary in or material to the business of such Grantor have signed agreements containing assignment of Intellectual Property rights to such Grantor and obligations of confidentiality;

(ii) to each Grantor’s knowledge after reasonable inquiry, no Person has infringed or misappropriated or is currently infringing or misappropriating any Intellectual Property rights owned by such Grantor, in each case, that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Effect;

(iii) (A) to each Grantor’s knowledge after reasonable inquiry, (1) such Grantor has never infringed or misappropriated and is not currently infringing or misappropriating any Intellectual Property rights of any Person, and (2) no product manufactured, used, distributed, licensed, or sold by or service provided by such Grantor has ever infringed or misappropriated or is currently infringing or misappropriating any Intellectual Property rights of any Person, in each case, except where such infringement either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect, and (B) there are no infringement or misappropriation claims or proceedings pending, or to any Grantor’s knowledge after reasonable inquiry, threatened in writing against any Grantor, and no Grantor has received any written notice or other communication of any actual or alleged infringement or misappropriation of any Intellectual Property rights of any Person, in each case, except where such infringement either individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect;

(iv) to each Grantor’s knowledge after reasonable inquiry, all registered Copyrights, registered Trademarks, and issued Patents that are owned by such Grantor and necessary in or material to the conduct of its business are valid, subsisting and enforceable and in compliance with all legal requirements, filings, and payments and other actions that are required to maintain such Intellectual Property in full force and effect,

(v) each Grantor has taken reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in all trade secrets owned by such Grantor that are necessary in or material to the conduct of the business of such Grantor, and

(vi) none of the proprietary software licensed or distributed by any Grantor that is material to generating revenue for such Grantor is subject to any “copyleft” or other obligation or condition (including any obligation or condition under any “open source” license such as the GNU Public License, Lesser GNU Public License, or Mozilla Public License) that would require, or condition the use or distribution of such software, on the disclosure, licensing or distribution of any source code of the proprietary software.

 

 

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(i) This Agreement creates a valid security interest in the Collateral of each Grantor, to the extent a security interest therein can be created under the Code, securing the payment of the Obligations. Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing statements listing each applicable Grantor, as a debtor, and Agent, as secured party, in the jurisdictions listed next to such Grantor’s name on Schedule 10. Upon the making of such filings, Agent shall have a first priority (subject only to Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under capital leases) perfected security interest in the Collateral of each Grantor to the extent such security interest can be perfected by the filing of a financing statement under the Code. Upon filing of any Copyright Security Agreement with the United States Copyright Office, filing of any Patent Security Agreement and any Trademark Security Agreement with the PTO, and the filing of appropriate financing statements in the jurisdictions listed on Schedule 10, all action necessary or desirable to protect and perfect the Security Interest in and on each Grantor’s United States issued and registered Patents, Trademarks, or Copyrights has been taken and such perfected Security Interest is enforceable as such as against any and all creditors of and purchasers from any Grantor. All action by any Grantor necessary to protect and perfect such security interest on each item of Collateral has been duly taken.

(j) (i) Except for the Security Interest created hereby, each Grantor is and will at all times be the sole holder of record and the legal and beneficial owner, free and clear of all Liens other than Permitted Liens, of the Pledged Interests indicated on Schedule 5 as being owned by such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the Closing Date, (ii) all of the Pledged Interests are duly authorized, validly issued, fully paid and non-assessable and the Pledged Interests constitute or will constitute the percentage of the issued and outstanding Equity Interests of the Pledged Companies of such Grantor identified on Schedule 5 as supplemented or modified by any Pledged Interests Addendum or any Joinder to this Agreement, (iii) such Grantor has the right and requisite authority to pledge, the Investment Property pledged by such Grantor to Agent as provided herein, (iv) all actions necessary or desirable to perfect and establish the first priority (subject only to Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under capital leases) of, or otherwise protect, Agent’s Liens in the Investment Property, and the proceeds thereof, have been duly taken, upon (A) the execution and delivery of this Agreement, (B) the taking of possession by Agent (or its agent or designee) of any certificates representing the Pledged Interests, to the extent such Pledged Interests are represented by certificates, together with undated powers (or other documents of transfer acceptable to Agent) endorsed in blank by the applicable Grantor, (C) the filing of financing statements in the applicable jurisdiction set forth on Schedule 10 for such Grantor with respect to the Pledged Interests of such Grantor that are not represented by certificates, and (D) with respect to any Securities Accounts, the delivery of Account Control Agreements with respect thereto, and (v) each Grantor has delivered to and deposited with Agent all certificates representing the Pledged Interests owned by such Grantor to the extent such Pledged Interests are represented by certificates, and undated powers (or other documents of transfer acceptable to Agent) endorsed in blank with respect to such certificates. None of the Pledged Interests owned or held by such Grantor has been issued or transferred in violation of any securities registration, securities disclosure, or similar laws of any jurisdiction to which such issuance or transfer may be subject.

(k) No consent, approval, authorization, or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (i) for the grant of a Security Interest by such Grantor in and to the Collateral pursuant to this Agreement or for the execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the exercise by Agent of the voting or other rights provided for in this Agreement with respect to the Investment Property or the remedies in respect of the Collateral pursuant to this Agreement, except (A) as may be required in connection with such disposition of Investment Property by laws affecting the offering and sale of securities generally, (B) for consents, approvals, authorizations, or other orders or actions that have already been obtained or given (as applicable) and that are still in force, and (C) the filing of financing statements and other filings necessary to perfect the Security Interests granted hereby. No Intellectual Property License of any Grantor that is necessary in or material to the conduct of such Grantor’s business requires any consent of any other Person that has not been obtained in order for such Grantor to grant the security interest granted hereunder in such Grantor’s right, title or interest in or to such Intellectual Property License.

 

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(l) [Reserved.]

(m) There is no default, breach, violation, or event of acceleration existing under any promissory note (as defined in the Code) constituting Collateral and pledged hereunder (each a “Pledged Note”) and no event has occurred or circumstance exists which, with the passage of time or the giving of notice, or both, would constitute a default, breach, violation, or event of acceleration under any Pledged Note. No Grantor that is an obligee under a Pledged Note has waived any default, breach, violation, or event of acceleration under such Pledged Note.

(n) As to all limited liability company or partnership interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby represents and warrants that the Pledged Interests issued pursuant to such agreement (i) are not dealt in or traded on securities exchanges or in securities markets, (ii) do not constitute investment company securities, and (iii) are not held by such Grantor in a Securities Account. In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, provides that such Pledged Interests are securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction.

7. Covenants. Each Grantor, jointly and severally, covenants and agrees with Agent that from and after the date of this Agreement and until the date of termination of this Agreement in accordance with Section 23:

(a) Possession of Collateral. In the event that any Collateral, including Proceeds, is evidenced by or consists of Negotiable Collateral, Investment Property, or Chattel Paper having an aggregate value or face amount of $500,000 or more for all such Negotiable Collateral, Investment Property, or Chattel Paper, the Grantors shall notify Agent thereof concurrently when the delivery of the next Compliance Certificate is required to be delivered pursuant to Section 6.2 of the Credit Agreement, and if and to the extent that perfection or priority of Agent’s Security Interest is dependent on or enhanced by possession, the applicable Grantor, promptly (and in any event within thirty (30) days (or such longer period as agreed to by Agent in writing in its sole discretion)) after request by Agent, shall execute such other documents and instruments as shall be requested by Agent or, if applicable, endorse and deliver physical possession of such Negotiable Collateral, Investment Property, or Chattel Paper to Agent, together with such undated powers (or other relevant document of transfer acceptable to Agent) endorsed in blank as shall be requested by Agent, and shall do such other acts or things deemed necessary or desirable by Agent to protect Agent’s Security Interest therein.

(b) Chattel Paper.

(i) Promptly (and in any event within thirty (30) days (or such longer period as agreed to by Agent in writing in its sole discretion)) after request by Agent, each Grantor shall take all steps reasonably necessary to grant Agent control of all electronic Chattel Paper in accordance with the Code and all “transferable records” as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global and National Commerce Act as in effect in any relevant jurisdiction, to the extent that the aggregate value or face amount of such electronic Chattel Paper equals or exceeds $500,000; and

(ii) If any Grantor retains possession of any Chattel Paper or instruments (which retention of possession shall be subject to the extent permitted hereby and by the Credit and Guaranty Agreement), promptly upon the request of Agent, such Chattel Paper and instruments shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the Security Interest of Runway Growth Credit Fund Inc., as Agent for the benefit of the Lenders”.

 

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(c) Account Control Agreements.

(i) Each Grantor shall obtain an authenticated Account Control Agreement (which may include a Controlled Account Agreement), from each bank maintaining a Deposit Account or Securities Account for such Grantor (other than with respect to any Excluded Accounts); provided that, to the extent any Deposit Account or Securities Account is acquired by any Grantor after the Closing Date in a Permitted Acquisition, this Section 7(c)(i) shall not apply with respect to such Deposit Account or Securities Account, as applicable, until the date that is 30 days after the consummation of such Permitted Acquisition; provided, further, that until such Account Control Agreement in respect of such acquired Deposit Account or Securities Account is obtained, Grantor shall not transfer assets to one or more acquired Deposit Accounts or Securities Accounts acquired in any given Permitted Acquisition in excess of $250,000 in the aggregate;

(ii) Each Grantor shall obtain an authenticated Account Control Agreement, from each issuer of uncertificated securities, securities intermediary, or commodities intermediary issuing or holding any financial assets or commodities to or for any Grantor, or maintaining a Securities Account for such Grantor (other than with respect to any Excluded Accounts); provided that, to the extent any uncertificated securities, financial assets or commodities are acquired by any Grantor after the Closing Date in a Permitted Acquisition, this Section 7(c)(ii) shall not apply with respect to such uncertificated securities, financial assets or commodities, as applicable, until the date that is 30 days after the consummation of such Permitted Acquisition; and

(iii) Each Grantor shall obtain an authenticated Account Control Agreement with respect to all of such Grantor’s investment property; provided that, to the extent any investment property is acquired by any Grantor after the Closing Date in a Permitted Acquisition, this Section 7(c)(iii) shall not apply with respect to such investment property until the date that is 30 days after the consummation of such Permitted Acquisition.

(d) Letter-of-Credit Rights. If the Grantors (or any of them) are or become the beneficiary of letters of credit having a face amount or value of $500,000 or more in the aggregate, then the applicable Grantor or Grantors shall notify Agent thereof concurrently when the delivery of the next Compliance Certificate is required to be delivered pursuant to Section 6.2 of the Credit Agreement and, promptly (and in any event within thirty (30) days (or such longer period as agreed to by Agent in writing in its sole discretion)) after request by Agent, enter into a tri-party agreement with Agent and the issuer or confirming bank with respect to letter-of-credit rights assigning such letter-of-credit rights to Agent and directing all payments thereunder to Agent’s Account, all in form and substance reasonably satisfactory to Agent.

(e) Commercial Tort Claims. If the Grantors (or any of them) obtain Commercial Tort Claims involving an asserted claim, in the amount of $500,000 or more individually or $1,000,000 or more in the aggregate for all Commercial Tort Claims, then the applicable Grantor or Grantors shall notify Agent concurrently when the delivery of the next Compliance Certificate is required to be delivered pursuant to Section 6.2 of the Credit Agreement and, promptly (and in any event within five Business Days (or such longer period as agreed to by Agent in writing in its sole discretion)) after request by Agent, amend Schedule 1 to describe such Commercial Tort Claims in a manner that reasonably identifies such Commercial Tort Claims and which is otherwise reasonably satisfactory to Agent, and hereby authorizes the filing of additional financing statements or amendments to existing financing statements describing such Commercial Tort Claims, and agrees to do such other acts or things deemed necessary or desirable by Agent to give Agent a first priority (subject only to Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under capital leases), perfected security interest in any such Commercial Tort Claim.

(f) Government Contracts. Other than Accounts and Chattel Paper which do not exceed $500,000 individually, if any Account or Chattel Paper arises out of a contract or contracts with the United States of America or any department, agency, or instrumentality thereof, Grantors shall, concurrently with the delivery of the next Compliance Certificate required to be delivered pursuant to Section 6.2 of the Credit Agreement, notify Agent thereof and deliver to Agent executed instruments in form and substance satisfactory to Agent which, if filed in accordance with the Assignment of Claims Act, would effectively assign to Agent, for the benefit of the Lenders, all moneys due or to become due under such contract or contracts. Upon the occurrence and during the continuance of an Event of Default, Agent may, in its sole discretion, file such executed instruments and provide any other written notice under the Assignment of Claims Act or other applicable law.

 

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(g) Intellectual Property.

(i) Upon the request of Agent, in order to facilitate filings with the PTO and the United States Copyright Office, each Grantor shall execute and deliver to Agent one or more Copyright Security Agreements, Trademark Security Agreements, or Patent Security Agreements to further evidence Agent’s Lien on such Grantor’s United States issued and registered Patents, Trademarks, or Copyrights, and the General Intangibles of such Grantor relating thereto or represented thereby;

(ii) Each Grantor shall have the duty, with respect to Intellectual Property that is necessary in or material to the conduct of such Grantor’s business, to protect and diligently enforce and defend at such Grantor’s expense its Intellectual Property, including (A) to diligently enforce and defend, including promptly suing for infringement, misappropriation, or dilution and to recover any and all damages for such infringement, misappropriation, or dilution, and filing for opposition, interference, and cancellation against conflicting Intellectual Property rights of any Person, (B) to prosecute diligently any trademark application or service mark application that is part of the Trademarks pending as of the date hereof or hereafter until the termination of this Agreement, (C) to prosecute diligently any patent application that is part of the Patents pending as of the date hereof or hereafter until the termination of this Agreement, (D) to take all reasonable and necessary action to preserve and maintain all of such Grantor’s Trademarks, Patents, Copyrights, Intellectual Property Licenses, and its rights therein, including paying all maintenance fees and filing of applications for renewal, affidavits of use, and affidavits of noncontestability, and (E) to require all employees, consultants, and contractors of each Grantor who were involved in the creation or development of such Intellectual Property to sign agreements containing assignment of Intellectual Property rights and obligations of confidentiality. Each Grantor further agrees not to abandon any Intellectual Property or Intellectual Property License that is necessary in or material to the conduct of such Grantor’s business. Each Grantor hereby agrees to take the steps described in this Section 7(g)(ii) with respect to all new or acquired Intellectual Property to which it or any of its Subsidiaries is now or later becomes entitled that is necessary in or material to the conduct of such Grantor’s business;

(iii) Grantors acknowledge and agree that neither Agent nor any Lender shall have no duties with respect to any Intellectual Property or Intellectual Property Licenses of any Grantor. Without limiting the generality of this Section 7(g)(iii), Grantors acknowledge and agree that Agent nor any Lender shall be under any obligation to take any steps necessary to preserve rights in the Collateral consisting of Intellectual Property or Intellectual Property Licenses against any other Person, but Agent or any Lender may do so at its option from and after the occurrence and during the continuance of an Event of Default, and all expenses incurred in connection therewith (including reasonable fees and expenses of attorneys and other professionals) shall be for the sole account of Borrowers;

(iv) On each date on which a Compliance Certificate is required to be delivered pursuant to Section 6.2 of the Credit Agreement (or, if an Event of Default has occurred and is continuing, more frequently if requested by Agent), each Grantor shall deliver to Agent a list in form satisfactory to Agent identifying all of its products and services that require the use of the Grantor’s proprietary software and generate a material amount of the revenue of such Grantor, whether created or acquired before, on, or after the Closing Date, and a certification signed by an officer of such Grantor, certifying that such list identifies all of its proprietary software that is material to generating revenue of such Grantor and indicating which of the Copyrights in such proprietary software have been filed for registration with the United States Copyright Office. Each Grantor shall continue to register or not register, as the case may be, its Copyrights in accordance with its historical practices as they existed as of the Closing Date. If an Event of Default has occurred and is continuing, and if requested by Agent, each Grantor shall (A) file applications and take any and all other actions necessary to register on an expedited basis (if expedited processing is available in accordance with the applicable regulations and procedures of the United States Copyright Office and any similar office of any other jurisdiction in which Copyrights are used) each of such Grantor’s Copyrights in any proprietary software that is material to generating revenue for such Grantor and identifying such Grantor as the sole claimant thereof in a manner sufficient to claim in the public record (or as a co-claimant thereof, if such is the case) such Grantor’s ownership or co-ownership thereof, and (B) cause to be prepared, executed, and delivered to Agent, with sufficient time to permit Agent to record no later than three Business Days following the date of registration of or recordation of transfer of ownership, as applicable, to the applicable Grantor of such Copyrights, (1) a Copyright Security

 

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Agreement or supplemental schedules to the Copyright Security Agreement reflecting the security interest of Agent in such Copyrights, which supplemental schedules shall be in form and content suitable for recordation with the United States Copyright Office (or any similar office of any other jurisdiction in which Copyrights are used), and (2) any other documentation as Agent reasonably deems necessary and requests in order to perfect and continue perfected Agent’s Liens on such Copyrights following such recordation;

(v) On each date on which a Compliance Certificate is required to be delivered pursuant to Section 6.2 of the Credit Agreement (or, if an Event of Default has occurred and is continuing, more frequently if requested by Agent), each Grantor shall provide Agent with a written report of all new Patents, Trademarks or Copyrights that are registered or the subject of pending applications for registrations, and of all Intellectual Property Licenses that are material to the conduct of such Grantor’s business, in each case, which were acquired, registered, or for which applications for registration were filed by any Grantor during the prior period. In the case of such registrations or applications therefor, which were acquired by any Grantor, each such Grantor shall file the necessary documents with the appropriate Governmental Authority identifying the applicable Grantor as the owner (or as a co-owner thereof, if such is the case) of such Intellectual Property. In each of the foregoing cases, the applicable Grantor shall promptly cause to be prepared, executed, and delivered to Agent supplemental schedules to the applicable Loan Documents to identify such Patent, Trademark and Copyright registrations and applications therefor (with the exception of Trademark applications filed on an intent-to-use basis for which no statement of use or amendment to allege use has been filed) and Intellectual Property Licenses as being subject to the security interests created thereunder;

(vi) Anything to the contrary in this Agreement notwithstanding, in no event shall any Grantor, either itself or through any agent, employee, licensee, or designee, file an application for the registration of any Copyright (other than Copyrights with respect to periodic publications and articles published in the ordinary course of business) with the United States Copyright Office or any similar office or agency in another country without giving Agent written notice thereof at least five Business Days prior to such filing and complying with Section 7(g)(i) and, if available, each such application for registration shall be filed on an “expedited basis”. Upon receipt from the United States Copyright Office of notice of registration of any Copyright (other than registered Copyrights with respect to periodic publications and articles published in the ordinary course of business), each Grantor shall promptly (but in no event later than five Business Days (or such longer period as agreed to by Agent in writing in its sole discretion) following such receipt) notify (but without duplication of any notice required by Section 7(g)(iv) or Section 7(g)(v)) Agent of such registration by delivering, or causing to be delivered, to Agent, documentation sufficient for Agent to perfect Agent’s Liens on such Copyright. If any Grantor acquires from any Person any Copyright registered with the United States Copyright Office or an application to register any Copyright with the United States Copyright Office, such Grantor shall promptly (but in no event later than five Business Days (or such longer period as agreed to by Agent in writing in its sole discretion) following such acquisition) notify Agent of such acquisition and deliver, or cause to be delivered, to Agent, documentation sufficient for Agent to perfect Agent’s Liens on such Copyright. In the case of such Copyright registrations or applications therefor which were acquired by any Grantor, each such Grantor shall promptly (but in no event later than five Business Days (or such longer period as agreed to by Agent in writing in its sole discretion) following such acquisition) file the necessary documents with the appropriate Governmental Authority identifying the applicable Grantor as the owner (or as a co-owner thereof, if such is the case) of such Copyrights;

(vii) Each Grantor shall take reasonable steps to maintain the confidentiality of, and otherwise protect and enforce its rights in, the Intellectual Property that is necessary in or material to the conduct of such Grantor’s business, including, as applicable (A) protecting the secrecy and confidentiality of its confidential information and trade secrets by having and enforcing a policy requiring all current employees, consultants, licensees, vendors and contractors with access to such information to execute appropriate confidentiality agreements, (B) taking actions reasonably necessary to ensure that no trade secret falls into the public domain, and (C) protecting the secrecy and confidentiality of the source code of all software programs and applications of which it is the owner or licensee by having and enforcing a policy requiring any licensees (or sublicensees) of such source code to enter into license agreements with commercially reasonable use and non-disclosure restrictions; and

 

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(viii) No Grantor shall incorporate into any proprietary software licensed or distributed by such Grantor that is material to generating revenue for such Grantor any third-party code that is licensed pursuant to any open source license such as the GNU Public License, Lesser GNU Public License, or Mozilla Public License, in a manner that would require or condition the use or distribution of such software on, the disclosing, licensing, or distribution of any source code for any portion of the proprietary software that is licensed or distributed by any Grantor.

(h) Investment Property.

(i) If any Grantor shall acquire, obtain, receive or become entitled to receive any Pledged Interests after the Closing Date, it shall promptly (and in any event within thirty (30) days (or such longer period as agreed to by Agent in writing in its sole discretion) of acquiring or obtaining such Collateral) deliver to Agent a duly executed Pledged Interests Addendum identifying such Pledged Interests;

(ii) Upon the occurrence and during the continuance of an Event of Default, following the request of Agent, all sums of money and property paid or distributed in respect of the Investment Property that are received by any Grantor shall be held by the Grantors in trust for the benefit of Agent segregated from such Grantor’s other property, and such Grantor shall deliver it forthwith to Agent in the exact form received;

(iii) Each Grantor shall promptly deliver to Agent a copy of each material notice or other material communication received by it in respect of any Pledged Interests;

(iv) No Grantor shall make or consent to any amendment or other modification or waiver with respect to any Pledged Interests, Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with respect to any Pledged Interests if the same is prohibited pursuant to the Loan Documents;

(v) Each Grantor agrees that it will cooperate with Agent in obtaining all necessary approvals and making all necessary filings under federal, state, local, or foreign law to effect the perfection of the Security Interest on the Investment Property or to effect any sale or transfer thereof; and

(vi) As to all limited liability company or partnership interests owned by such Grantor and issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby covenants that the Pledged Interests issued pursuant to such agreement (A) are not and shall not be dealt in or traded on securities exchanges or in securities markets, (B) do not and will not constitute investment company securities, and (C) are not and will not be held by such Grantor in a securities account. In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, provides or shall provide that such Pledged Interests are securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction; and

(vii) With regard to any Pledged Interests that are not certificated, any such Grantor of such non-certificated Pledged Interests (i) agrees promptly to note on its books the security interests granted to Agent and confirmed under this Agreement, (ii) agrees that after the occurrence and during the continuation of an Event of Default, it will comply with instructions of Agent or its nominee with respect to the applicable Pledged Interests without further consent by the applicable Grantor, (iii) to the extent permitted by law, agrees that the “issuer’s jurisdiction” (as defined in Section 8-110 of the Code) is the State of New York, (iv) agrees to notify Agent upon obtaining knowledge of any interest in favor of any person in the applicable Pledged Interests that is materially adverse to the interest of the Agent therein, other than any Permitted Liens and (v) waives any right or requirement at any time hereafter to receive a copy of this Agreement in connection with the registration of any Pledged Interests hereunder in the name of Agent or its nominee or the exercise of voting rights by Agent or its nominee.

 

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(i) Real Property; Fixtures. Each Grantor covenants and agrees that upon the acquisition of any fee interest in Real Property having a fair market value in excess of $1,000,000 it will promptly (and in any event within five (5) Business Days (or such longer period as agreed to by Agent in writing in its sole discretion) of acquisition) notify Agent of the acquisition of such Real Property and will grant to Agent, for the benefit of the Lenders, a first priority (subject only to Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under capital leases) mortgage on each fee interest in Real Property now or hereafter owned by such Grantor and shall deliver such other documentation and opinions, in form and substance satisfactory to Agent, in connection with the grant of such mortgage as Agent shall request in its sole discretion, including title insurance policies, financing statements, fixture filings and environmental audits and such Grantor shall pay all recording costs, intangible taxes and other fees and costs (including reasonable attorneys’ fees and expenses) incurred in connection therewith. Each Grantor acknowledges and agrees that, to the extent permitted by applicable law, all of the Collateral shall remain personal property regardless of the manner of its attachment or affixation to real property.

(j) [Reserved].

(k) Controlled Accounts; Controlled Investments. Subject to Section 7(c), other than with respect to Excluded Accounts, no Grantor will, and no Grantor will permit its Subsidiaries to, make, acquire, or permit to exist Permitted Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or Securities Accounts unless Grantor or its Subsidiary, as applicable, and the applicable bank or securities intermediary have entered into Account Control Agreements governing such Permitted Investments in order to perfect (or further establish) Agent’s Liens in such Permitted Investments.

(l) Name, Etc. No Grantor will change its name, chief executive office, organizational identification number, jurisdiction of organization or organizational identity; provided, that any Grantor may change its name or chief executive office upon at least ten days prior written notice to Agent of such change.

(m) Account Verification. Each Grantor will, and will cause each of its Subsidiaries to, permit Agent, in Agent’s name or in the name or a nominee of Agent, to verify the validity, amount or any other matter relating to any Account, by mail, telephone, facsimile transmission or other electronic means of transmission or otherwise. Further, at the request of Agent, each Grantor will, and will cause each of its Subsidiaries to, send requests for verification of Accounts or, after the occurrence and during the continuance of an Event of Default, send notices of assignment of Accounts to Account Debtors and other obligors.

(n) [Reserved.]

(o) Pledged Notes. Grantors (i) without the prior written consent of Agent, will not (A) waive or release any obligation of any Person that is obligated under any of the Pledged Notes, (B) take or omit to take any action or knowingly suffer or permit any action to be omitted or taken, the taking or omission of which would result in any right of offset against sums payable under the Pledged Notes, or (C) other than Permitted Transfers, assign or surrender their rights and interests under any of the Pledged Notes or terminate, cancel, modify, change, supplement or amend the Pledged Notes, and (ii) shall provide to Agent copies of all material written notices (including notices of default) given or received with respect to the Pledged Notes promptly after giving or receiving such notice.

8. Relation to Other Security Documents. The provisions of this Agreement shall be read and construed with the other Loan Documents referred to below in the manner so indicated.

(a) Credit Agreement. In the event of any conflict between any provision in this Agreement and a provision in the Credit Agreement, such provision of the Credit Agreement shall control.

(b) Patent, Trademark, Copyright Security Agreements. The provisions of the Copyright Security Agreements, Trademark Security Agreements, and Patent Security Agreements are supplemental to the provisions of this Agreement, and nothing contained in the Copyright Security Agreements, Trademark Security Agreements, or the Patent Security Agreements shall limit any of the rights or remedies of Agent hereunder. In the event of any conflict between any provision in this Agreement and a provision in a Copyright Security Agreement, Trademark Security Agreement or Patent Security Agreement, such provision of this Agreement shall control.

 

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9. Further Assurances.

(a) Each Grantor agrees that from time to time, at its own expense, such Grantor will promptly execute and deliver all further instruments and documents, and take all further action, that Agent may reasonably request, in order to perfect and protect the Security Interest granted hereby, to create, perfect or protect the Security Interest purported to be granted hereby or to enable Agent to exercise and enforce its rights and remedies hereunder with respect to any of the Collateral.

(b) Each Grantor authorizes the filing by Agent of financing or continuation statements, or amendments thereto, and such Grantor will execute and deliver to Agent such other instruments or notices, as Agent may reasonably request, in order to perfect and preserve the Security Interest granted or purported to be granted hereby.

(c) Each Grantor authorizes Agent at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments (i) describing the Collateral as “all personal property of debtor” or “all assets of debtor” or words of similar effect, (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance. Each Grantor also hereby ratifies any and all financing statements or amendments previously filed by Agent in any jurisdiction.

(d) Each Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement filed in connection with this Agreement without the prior written consent of Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the Code.

10. Agents Right to Perform Contracts, Exercise Rights, etc. Upon the occurrence and during the continuance of an Event of Default, Agent (or its designee) (a) may proceed to perform any and all of the obligations of any Grantor contained in any contract, lease, or other agreement and exercise any and all rights of any Grantor therein contained as fully as such Grantor itself could, (b) shall have the right (subject to Section 17(b)) to use any Grantor’s rights under Intellectual Property Licenses in connection with the enforcement of Agent’s rights hereunder, including the right to prepare for sale and sell any and all Inventory and Equipment now or hereafter owned by any Grantor and now or hereafter covered by such licenses, and (c) shall have the right to request that any Equity Interests that are pledged hereunder be registered in the name of Agent or any of its nominees.

11. Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints Agent its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, at such time as an Event of Default has occurred and is continuing under the Credit Agreement, to take any action and to execute any instrument which Agent may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including:

(a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Accounts or any other Collateral of such Grantor;

(b) to receive and open all mail addressed to such Grantor and to notify postal authorities to change the address for the delivery of mail to such Grantor to that of Agent;

(c) to receive, indorse, and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper;

 

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(d) to file any claims or take any action or institute any proceedings which Agent may deem necessary or desirable for the collection of any of the Collateral of such Grantor or otherwise to enforce the rights of Agent with respect to any of the Collateral;

(e) to repair, alter, or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any Person obligated to such Grantor in respect of any Account of such Grantor;

(f) to use any Intellectual Property or Intellectual Property Licenses of such Grantor, including but not limited to any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, or advertising matter, in preparing for sale, advertising for sale, or selling Inventory or other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of such Grantor; and

(g) Agent, on behalf of the Lenders, shall have the right, but shall not be obligated, to bring suit in its own name to enforce the Intellectual Property and Intellectual Property Licenses and, if Agent shall commence any such suit, the appropriate Grantor shall, at the request of Agent, do any and all lawful acts and execute any and all proper documents reasonably required by Agent in aid of such enforcement.

To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable until this Agreement is terminated.

12. Agent May Perform. If any Grantor fails to perform any agreement contained herein, Agent may itself perform, or cause performance of, such agreement, and the reasonable expenses of Agent incurred in connection therewith shall be payable, jointly and severally, by Grantors in accordance with the terms of the Credit Agreement.

13. Agent’s Duties. The powers conferred on Agent hereunder are solely to protect Agent’s interest in the Collateral, for the benefit of the Lenders, and shall not impose any duty upon Agent to exercise any such powers. Except for the safe custody of any Collateral in its actual possession and the accounting for moneys actually received by it hereunder, Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its actual possession if such Collateral is accorded treatment substantially equal to that which Agent accords its own property.

14. Collection of Accounts, General Intangibles and Negotiable Collateral. At any time upon the occurrence and during the continuance of an Event of Default, Agent or Agent’s designee may (a) make direct verification from Account Debtors with respect to any or all Accounts that are part of the Collateral, (b) notify Account Debtors of any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable Collateral of such Grantor have been assigned to Agent, for the benefit of the Lenders, or that Agent has a security interest therein, or (c) collect the Accounts, General Intangibles and Negotiable Collateral of any Grantor directly, and any collection costs and expenses shall constitute part of such Grantor’s Obligations under the Loan Documents.

15. Disposition of Pledged Interests by Agent. None of the Pledged Interests existing as of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on the date of acquisition thereof will be, registered or qualified under the various federal or state securities laws of the United States and disposition thereof after an Event of Default has occurred and is continuing may be restricted to one or more private (instead of public) sales in view of the lack of such registration. Each Grantor understands that in connection with such disposition, Agent may approach only a restricted number of potential purchasers and further understands that a sale under such circumstances may yield a lower price for the Pledged Interests than if the Pledged Interests were registered and qualified pursuant to federal and state securities laws and sold on the open market. Each Grantor, therefore, agrees that: (a) if Agent shall, pursuant to the terms of this Agreement, sell or cause the Pledged Interests or any portion thereof to be sold at a private sale, Agent shall have the right to rely upon the advice and opinion of any nationally recognized brokerage or investment firm (but shall not be obligated to seek such advice and the failure to do so shall not be considered in determining the commercial reasonableness of such action) as to the best manner in which to offer the Pledged Interest or any portion thereof for sale and as to the best price reasonably obtainable at the private sale thereof, and (b) such reliance shall be conclusive evidence that Agent has handled the disposition in a commercially reasonable manner.

 

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16. Voting and Other Rights in Respect of Pledged Interests.

(a) Upon the occurrence and during the continuation of an Event of Default, (i) Agent may, at its option, and upon written notice (which may be concurrent) to any Grantor, and in addition to all rights and remedies available to Agent under any other agreement, at law, in equity, or otherwise, exercise all voting rights, or any other ownership or consensual rights (including any dividend or distribution rights) in respect of the Pledged Interests owned by such Grantor, but under no circumstances is Agent obligated by the terms of this Agreement to exercise such rights, and (ii) if Agent duly exercises its right to vote any of such Pledged Interests, each Grantor hereby appoints Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any manner Agent deems advisable for or against all matters submitted or which may be submitted to a vote of shareholders, partners or members, as the case may be. The power-of-attorney and proxy granted hereby is coupled with an interest and shall be irrevocable.

(b) For so long as any Grantor shall have the right to vote the Pledged Interests owned by it, such Grantor covenants and agrees that it will not, without the prior written consent of Agent, vote or take any consensual action with respect to such Pledged Interests which would materially adversely affect the rights of Agent or the Lenders, or the value of the Pledged Interests.

17. Remedies. Upon the occurrence and during the continuance of an Event of Default:

(a) Agent may, and, at the instruction of the Required Lenders, shall exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other Loan Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the Code or any other applicable law. Without limiting the generality of the foregoing, each Grantor expressly agrees that, in any such event, Agent without demand of performance or other demand, advertisement or notice of any kind (except a notice specified below of time and place of public or private sale) to or upon any Grantor or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), may take immediate possession of all or any portion of the Collateral and (i) require Grantors to, and each Grantor hereby agrees that it will at its own expense and upon request of Agent forthwith, assemble all or part of the Collateral as directed by Agent and make it available to Agent at one or more locations where such Grantor regularly maintains Inventory, and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Agent’s offices or elsewhere, for cash, on credit, and upon such other terms as Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notification of sale shall be required by law, at least ten days notification by mail to the applicable Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and specifically such notification shall constitute a reasonable “authenticated notification of disposition” within the meaning of Section 9-611 of the Code. Agent shall not be obligated to make any sale of Collateral regardless of notification of sale having been given. Agent may adjourn any public sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees that (A) the internet shall constitute a “place” for purposes of Section 9-610(b) of the Code, and (B) to the extent notification of sale shall be required by law, notification by mail of the URL where a sale will occur and the time when a sale will commence at least ten days prior to the sale shall constitute a reasonable notification for purposes of Section 9-611(b) of the Code. Each Grantor agrees that any sale of Collateral to a licensor pursuant to the terms of a license agreement between such licensor and a Grantor is sufficient to constitute a commercially reasonable sale (including as to method, terms, manner, and time) within the meaning of Section 9-610 of the Code.

(b) Agent is hereby granted a license or other right to use, without liability for royalties or any other charge, each Grantor’s Intellectual Property, including but not limited to, any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, and advertising matter, whether owned by any Grantor or with respect to which any Grantor has rights under license, sublicense, or other agreements (including any Intellectual Property License), as it pertains to the Collateral, in preparing for sale, advertising for sale and selling any Collateral, and each Grantor’s rights under all licenses and all franchise agreements shall inure to the benefit of Agent.

 

19


(c) Agent may, in addition to other rights and remedies provided for herein, in the other Loan Documents, or otherwise available to it under applicable law and without the requirement of notice to or upon any Grantor or any other Person (which notice is hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), (i) with respect to any Grantor’s Deposit Accounts in which Agent’s Liens are perfected by control under Section 9-104 of the Code, instruct the bank maintaining such Deposit Account for the applicable Grantor to pay the balance of such Deposit Account to or for the benefit of Agent, and (ii) with respect to any Grantor’s Securities Accounts in which Agent’s Liens are perfected by control under Section 9-106 of the Code, instruct the securities intermediary maintaining such Securities Account for the applicable Grantor to (A) transfer any cash in such Securities Account to or for the benefit of Agent, or (B) liquidate any financial assets in such Securities Account that are customarily sold on a recognized market and transfer the cash proceeds thereof to or for the benefit of Agent.

(d) Any cash held by Agent as Collateral and all cash proceeds received by Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied against the Obligations in the order set forth in the Credit Agreement. In the event the proceeds of Collateral are insufficient to satisfy all of the Obligations in full, each Grantor shall remain jointly and severally liable for any such deficiency.

(e) Each Grantor hereby acknowledges that the Obligations arise out of a commercial transaction, and agrees that if an Event of Default shall occur and be continuing Agent shall have the right to an immediate writ of possession without notice of a hearing. Agent shall have the right to the appointment of a receiver for the properties and assets of each Grantor, and each Grantor hereby consents to such rights and such appointment and hereby waives any objection such Grantor may have thereto or the right to have a bond or other security posted by Agent.

18. Remedies Cumulative. Each right, power, and remedy of Agent or any Lender as provided for in this Agreement or the other Loan Documents now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Agreement and the other Loan Documents or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by Agent or any Lender, of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by Agent or such Lender of any or all such other rights, powers, or remedies.

19. Marshaling. Agent shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of Agent’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

20. Indemnity. Each Grantor agrees to indemnify Agent and the Lenders from and against all claims, lawsuits and liabilities (including reasonable attorneys’ fees) arising out of or resulting from this Agreement (including enforcement of this Agreement) or any other Loan Document to which such Grantor is a party in accordance with and to the extent set forth in Section 12.3 of the Credit Agreement. This provision shall survive the termination of this Agreement and the Credit Agreement and the repayment of the Obligations.

 

20


21. Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by Agent and each Grantor to which such amendment applies.

22. Addresses for Notices. All notices and other communications provided for hereunder shall be given in the form and manner and delivered to Agent at its address specified in the Credit Agreement, and to any of the Grantors at the notice address specified for Borrowers in the Credit Agreement, or as to any party, at such other address as shall be designated by such party in a written notice to the other party.

23. Continuing Security Interest: Assignments under Credit Agreement.

(a) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the Obligations have been paid in full in accordance with the provisions of the Credit Agreement and any remaining commitments to extend credit under the Credit Agreement have expired or have been terminated, (ii) be binding upon each Grantor, and their respective successors and assigns, and (iii) inure to the benefit of, and be enforceable by, Agent, and its successors, transferees and assigns. Without limiting the generality of the foregoing clause (iii), any Lender may, in accordance with the provisions of the Credit Agreement, assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise. Upon payment in full of the Obligations in accordance with the provisions of the Credit Agreement and the expiration or termination of any commitment to extend credit, the Security Interest granted hereby shall terminate and all rights to the Collateral shall revert to Grantors or any other Person entitled thereto. At such time, upon Borrowers’ request, Agent will authorize the filing of appropriate termination statements to terminate such Security Interest. No transfer or renewal, extension, assignment, or termination of this Agreement or of the Credit Agreement, any other Loan Document, or any other instrument or document executed and delivered by any Grantor to Agent nor any additional loans made by any Lender to any Borrower, nor the taking of further security, nor the retaking or re-delivery of the Collateral to Grantors, or any of them, by Agent, nor any other act of the Lenders, or any of them, shall release any Grantor from any obligation, except a release or discharge executed in writing by Agent in accordance with the provisions of the Credit Agreement. Agent shall not by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by Agent and then only to the extent therein set forth. A waiver by Agent of any right or remedy on any occasion shall not be construed as a bar to the exercise of any such right or remedy which Agent would otherwise have had on any other occasion.

(b) If any Lender repays, refunds, restores, or returns in whole or in part, any payment or property (including any proceeds of Collateral) previously paid or transferred to such Lender in full or partial satisfaction of any Obligation or on account of any other obligation of any Loan Party under any Loan Document, because the payment, transfer, or the incurrence of the obligation so satisfied is asserted or declared to be void, voidable, or otherwise recoverable under any law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent transfers, preferences, or other voidable or recoverable obligations or transfers (each, a “Voidable Transfer”), or because such Lender elects to do so on the reasonable advice of its counsel in connection with a claim that the payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to any such Voidable Transfer, or the amount thereof that such Lender elects to repay, restore, or return (including pursuant to a settlement of any claim in respect thereof), and as to all reasonable costs, expenses, and attorneys’ fees of such Lender related thereto, (i) the liability of the Loan Parties with respect to the amount or property paid, refunded, restored, or returned will automatically and immediately be revived, reinstated, and restored and will exist, and (ii) Agent’s Liens securing such liability shall be effective, revived, and remain in full force and effect, in each case, as fully as if such Voidable Transfer had never been made. If, prior to any of the foregoing, (A) Agent’s Liens shall have been released or terminated, or (B) any provision of this Agreement shall have been terminated or cancelled, Agent’s Liens, or such provision of this Agreement, shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligation of any Loan Party in respect of such liability or any Collateral securing such liability.

 

21


24. Survival. All representations and warranties made by the Grantors in this Agreement and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended under the Credit Agreement, and shall continue in full force and effect as long as the principal of or any accrued interest on any loan or any fee or any other amount payable under the Credit Agreement is outstanding and unpaid and so long as the Lenders’ commitments to extend credit under the Credit Agreement have not expired or terminated.

25. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.

(a) This Agreement and any claims, controversies or disputes arising hereunder or thereunder or related hereto or thereto, shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law. Each Loan Party hereby expressly waives any claim to assert that the laws of any other jurisdiction govern this Agreement.

(b) Each Loan Party hereby submits to the exclusive jurisdiction of the State and Federal courts in New York County, City of New York, New York; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Agent from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Agent or any Lender. Each Loan Party expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each Loan Party hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.

(c) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT OR ANYWHERE ELSE, EACH LOAN PARTY AGREES THAT IT SHALL NOT SEEK FROM AGENT OR ANY LENDER UNDER ANY THEORY OF LIABILITY (INCLUDING ANY THEORY IN TORTS), ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

(d) Each Loan Party hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to such Loan Party at the address set forth in, or subsequently provided by such Loan Party in accordance with, the Credit Agreement and that service so made shall be deemed completed upon the earlier to occur of the applicable Loan Party’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.

(e) No claim may be made by any Grantor against Agent, any Lender, or any Affiliate, director, officer, employee, counsel, representative, agent, or attorney-in-fact of any of them for any special, indirect, consequential, or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission, or event occurring in connection herewith, and each Grantor hereby waives, releases, and agrees not to sue upon any claim for such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

22


26. New Subsidiaries. Pursuant to Section 6.11 of the Credit Agreement, certain Subsidiaries (whether by acquisition or creation) of any Grantor are required to enter into this Agreement by executing and delivering in favor of Agent a Joinder to this Agreement in substantially the form of Annex 1. Upon the execution and delivery of Annex 1 by any such new Subsidiary, such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any instrument adding an additional Grantor as a party to this Agreement shall not require the consent of any Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor hereunder.

27. Agent. Each reference herein to any right granted to, benefit conferred upon or power exercisable by the “Agent” shall be a reference to Agent, for the benefit of each Lender.

28. Miscellaneous.

(a) This Agreement is a Loan Document. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.

(b) Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

(c) The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

(d) The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist.

29. Amendment and Restatement. This Agreement amends and restates the Existing Security Agreement in its entirety and, upon the Closing Date, the terms and provisions of the Existing Security Agreement shall be superseded hereby. Upon the Closing Date: (i) all terms and conditions of the Existing Security Agreement, as amended and restated by this Agreement, shall be and remain in full force and effect, as so amended, and shall constitute the legal, valid, binding and enforceable obligations of the Grantors; (ii) the terms and conditions of the Existing Security Agreement shall be amended as set forth herein and, as so amended and restated, shall be restated in their entirety, but shall be amended only with respect to the rights, duties and obligations among the Grantors accruing from and after the date hereof; (iii) this Agreement shall not in any way release or impair the rights, duties, Obligations, Liens or security interests created pursuant to the Existing Security Agreement or affect the relative priorities thereof, in each case to the extent in force and effect thereunder as of the date hereof, except as modified hereby or by documents, instruments and agreements executed and delivered in connection herewith, and all of such rights, duties, Obligations and Liens are assumed, ratified and affirmed by the Grantors; (iv) this Agreement shall not constitute a substitution or novation of any Grantor’s Obligations or any of the other rights, duties and obligations of

 

23


the parties hereunder; (v) the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of Agent or any Lender under the Existing Security Agreement, nor constitute a waiver of any covenant, agreement or obligation under the Existing Security Agreement, except to the extent that any such covenant, agreement or obligation is no longer set forth herein or is modified hereby; (vi) any and all references in the Loan Documents to the Existing Security Agreement shall, without further action of the parties, be deemed a reference to the Existing Security Agreement, as amended and restated by this Agreement, and as this Agreement shall be further amended, restated, modified, supplemented or amended and restated from time to time hereafter in accordance with the terms of this Agreement; and (vii) each Grantor represents and warrants that, as of the date hereof, there are no claims or offsets against, or defenses or counterclaims to, its obligations under the Existing Security Agreement.

[SIGNATURE PAGES FOLLOW]

 

24


[SIGNATURE PAGE TO AMENDED AND RESTATED SECURITY AGREEMENT]

IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to be executed and delivered as of the day and year first above written.

 

GRANTORS:
FISCALNOTE, INC.
By  

     

Name:  

 

Title:  

 

CQ-ROLL CALL, INC.
By  

     

Name:  

 

Title:  

 

CAPITOL ADVANTAGE LLC
By  

     

Name:  

 

Title:  

 

VOTERVOICE, L.L.C.
By  

     

Name:  

 

Title:  

 

SANDHILL STRATEGY LLC
By  

     

Name:  

 

Title:  

 

FISCALNOTE HOLDINGS, INC.
By  

     

Name:  

 

Title:  

 

FISCALNOTE HOLDINGS II, INC.
By  

     

Name:  

 

Title:  

 


[SIGNATURE PAGE TO AMENDED AND RESTATED SECURITY AGREEMENT]

 

AGENT,

RUNWAY GROWTH CREDIT FUND INC.,

a Maryland corporation

By:  

     

Name:  

 

Title:  

 


SCHEDULE 1

COMMERCIAL TORT CLAIMS

[***]


SCHEDULE 2

COPYRIGHTS

[***]


SCHEDULE 3

INTELLECTUAL PROPERTY LICENSES

[***]


SCHEDULE 4

PATENTS

[***]


SCHEDULE 5

PLEDGED COMPANIES

[***]


SCHEDULE 6

TRADEMARKS

[***]


SCHEDULE 7

NAME; CHIEF EXECUTIVE OFFICE; TAX IDENTIFICATION NUMBERS AND ORGANIZATIONAL NUMBERS

 

Name

 

Chief Executive

Office

  

Tax Identification

Number

  

Organizational
Number

FiscalNote, Inc.

 

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]

VoterVoice, L.L.C.

 

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]

CQ-Roll Call, Inc.

 

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]

Capitol Advantage LLC

 

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]

FiscalNote Holdings, Inc.

 

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]

FiscalNote Holdings II, Inc.

 

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]

Sandhill Strategy LLC

 

1201 Pennsylvania Ave NW 6th Floor

Washington, DC 20004

   [***]    [***]


SCHEDULE 8

OWNED REAL PROPERTY

[***]


SCHEDULE 9

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS

 

Credit Party

  

Depositary Bank and

Address

  

Account Number

  

Account Type

FiscalNote, Inc.   

Bank of America

100 North Tryon Street

Charlotte, NC 28255

   [***]    [***]
FiscalNote, Inc.   

Comerica

333 West Santa Clara St.

San Jose, CA 95113

   [***]    [***]
FiscalNote, Inc.   

Comerica

333 West Santa Clara St.

San Jose, CA 95113

   [***]    [***]
VoterVoice, L.L.C.   

Chase

8751 Siegen Ln Baton

Rouge, LA 70810

   [***]    [***]
VoterVoice, L.L.C.   

Chase

8751 Siegen Ln Baton

Rouge, LA 70810

   [***]    [***]
CQ-Roll Call, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
CQ-Roll Call, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
CQ-Roll Call, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
CQ-Roll Call, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
FiscalNote Holdings, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
FiscalNote, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
FiscalNote, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
FiscalNote, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
FiscalNote, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
Sandhill Strategy LLC   

Wells Fargo Bank, N.A.

420 Montgomery St.

San Francisco, CA 94104

   [***]    [***]
FiscalNote, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
FiscalNote, Inc.   

JP Morgan Chase & Co.

4 New York Plaza, Floor 15,

New York, NY 10004

   [***]    [***]
FiscalNote Holdings, Inc.    JP Morgan Chase & Co.    [***]    [***]
  

4 New York Plaza, Floor 15,

New York, NY 10004

     


SCHEDULE 10

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

[***]


ANNEX 1

FORM OF JOINDER

Joinder No. ____ (this “Joinder”), dated as of ____________ 20___, to the Amended and Restated Security Agreement, dated as of October 19, 2020 (as amended, restated, supplemented, or otherwise modified from time to time, the “Security Agreement”), by and among each of the parties listed on the signature pages thereto and those additional entities that thereafter become parties thereto (collectively, jointly and severally, “Grantors” and each, individually, a “Grantor”) and RUNWAY GROWTH CREDIT FUND INC., as administrative agent and collateral agent for the Lenders (in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated August 20, 2018 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among FISCALNOTE, INC., a Delaware corporation (“Borrower Representative”), CQ-ROLL CALL, INC., a Delaware corporation, CAPITOL ADVANTAGE LLC, a Virginia corporation, VOTERVOICE, L.L.C., a Louisiana limited liability company, SANDHILL STRATEGY LLC, a District of Columbia limited liability company, and each other Person party hereto as a borrower from time to time (collectively, jointly and severally, “Borrowers”, and each, a “Borrower”), FISCALNOTE HOLDINGS, INC., a Delaware corporation (“Parent”), FISCALNOTE HOLDINGS II, INC., a Delaware corporation (together with Parent and each other Person party thereto as a guarantor from time to time collectively, “Guarantors”, and each, a “Guarantor”), the lenders from time to time party thereto (collectively, the “Lenders”, and each, a “Lender”), and Agent, the Lenders have agreed to make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof;

WHEREAS, initially capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement or, if not defined therein, in the Credit Agreement, and this Joinder shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis;

WHEREAS, Grantors have entered into the Security Agreement in order to induce the Lenders to make certain financial accommodations to Borrowers as provided for in the Credit Agreement and the other Loan Documents;

WHEREAS, pursuant to Section 6.11 of the Credit Agreement and Section 26 of the Security Agreement, certain Subsidiaries of the Loan Parties, must execute and deliver certain Loan Documents, including the Security Agreement, and the joinder to the Security Agreement by the undersigned new Grantor or Grantors (collectively, the “New Grantors”) may be accomplished by the execution of this Joinder in favor of Agent, for the benefit of the Lenders; and

WHEREAS, each New Grantor (a) is [an Affiliate] [a Subsidiary] of Borrowers and, as such, will benefit by virtue of the financial accommodations extended to Borrowers by the Lenders, and (b) by becoming a Grantor will benefit from certain rights granted to the Grantors pursuant to the terms of the Loan Documents.

NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each New Grantor hereby agrees as follows:

1. In accordance with Section 26 of the Security Agreement, each New Grantor, by its signature below, becomes a “Grantor” under the Security Agreement with the same force and effect as if originally named therein as a “Grantor” and each New Grantor hereby (a) agrees to all of the terms and provisions of the Security Agreement applicable to it as a “Grantor” thereunder, and (b) represents and warrants that the representations and warranties made by it as a “Grantor” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof. In furtherance of the foregoing, each New Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit of the Lenders, to secure the Obligations, a continuing security interest in and to all of such New Grantor’s right, title and interest in and to the Collateral (as defined in Section 3 of the Security Agreement). Each reference to a “Grantor” in the Security Agreement shall be deemed to include each New Grantor. The Security Agreement is incorporated herein by reference.


2. Schedule 1, “Commercial Tort Claims”, Schedule 2, “Copyrights”, Schedule 3, “Intellectual Property Licenses”, Schedule 4, “Patents”, Schedule 5, “Pledged Companies”, Schedule 6, “Trademarks”, Schedule 7, Name; Chief Executive Office; Tax Identification Numbers and Organizational Numbers, Schedule 8, “Owned Real Property”, Schedule 9, “Deposit Accounts and Securities Accounts”, Schedule 10, and Schedule 10, “List of Uniform Commercial Code Filing Jurisdictions”, attached hereto supplement Schedule 1, Schedule 2, Schedule 3, Schedule 4, Schedule 5, Schedule 6, Schedule 7, Schedule 8, Schedule 9, and Schedule 10, respectively, to the Security Agreement and shall be deemed a part thereof for all purposes of the Security Agreement.

3. Each New Grantor authorizes Agent at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and amendments thereto (a) describing the Collateral as “all personal property of debtor” or “all assets of debtor” or words of similar effect, (b) describing the Collateral as being of equal or lesser scope or with greater detail, or (c) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance. Each New Grantor also hereby ratifies any and all financing statements or amendments previously filed by Agent in any jurisdiction in connection with the Loan Documents.

4. Each New Grantor represents and warrants to Agent and the Lenders that this Joinder has been duly executed and delivered by such New Grantor and constitutes its legal, valid, and binding obligation, enforceable against it in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium, or other similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

5. This Joinder is a Loan Document. This Joinder may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Joinder. Delivery of an executed counterpart of this Joinder by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Joinder. Any party delivering an executed counterpart of this Joinder by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Joinder but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Joinder.

6. The Security Agreement, as supplemented hereby, shall remain in full force and effect.

7. THIS JOINDER SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


[SIGNATURE PAGE TO JOINDER TO AMENDED AND RESTATED SECURITY AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Amended and Restated Security Agreement to be executed and delivered as of the day and year first above written.

 

NEW GRANTORS:     [NAME OF NEW GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

    [NAME OF NEW GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

AGENT:    

RUNWAY GROWTH CREDIT FUND INC.,

a Maryland corporation

    By:  

     

    Name:  

 

    Title:  

 


EXHIBIT A

COPYRIGHT SECURITY AGREEMENT

This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made this ___ day of ___________, 20__, by and among Grantors listed on the signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”), and RUNWAY GROWTH CREDIT FUND INC., as administrative agent and collateral agent for the Lenders (in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated August 28, 2018 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among FISCALNOTE, INC., a Delaware corporation (“Borrower Representative”), CQ-ROLL CALL, INC., a Delaware corporation, CAPITOL ADVANTAGE LLC, a Virginia corporation, VOTERVOICE, L.L.C., a Louisiana limited liability company, SANDHILL STRATEGY LLC, a District of Columbia limited liability company, and each other Person party hereto as a borrower from time to time (collectively, jointly and severally, “Borrowers”, and each, a “Borrower”), FISCALNOTE HOLDINGS, INC., a Delaware corporation (“Parent”), FISCALNOTE HOLDINGS II, INC., a Delaware corporation (together with Parent and each other Person party thereto as a guarantor from time to time collectively, “Guarantors”, and each, a “Guarantor”), the lenders from time to time party thereto (collectively, the “Lenders”, and each, a “Lender”), and Agent, the Lenders have agreed to make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof;

WHEREAS, the Lenders are willing to make the financial accommodations to Borrowers as provided for in the Credit Agreement, the other Loan Documents, but only upon the condition, among others, that Grantors shall have executed and delivered to Agent, for the benefit of the Lenders, that certain Amended and Restated Security Agreement, dated as of October 19, 2020 (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Security Agreement”); and

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to Agent, for the benefit of the Lenders, this Copyright Security Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:

1. DEFINED TERMS. All initially capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement or, if not defined therein, in the Credit Agreement, and this Copyright Security Agreement shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis.

2. GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL. Each Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit each Lender, to secure the Obligations, a continuing security interest (referred to in this Copyright Security Agreement as the “Security Interest”) in all of such Grantor’s right, title and interest in and to the following, whether now owned or hereafter acquired or arising (collectively, the “Copyright Collateral”):

(a) all of such Grantor’s Copyrights and Copyright Intellectual Property Licenses to which it is a party including those referred to on Schedule I;

(b) all renewals or extensions of the foregoing; and

(c) all products and proceeds of the foregoing, including any claim by such Grantor against third parties for past, present or future infringement of any Copyright or any Copyright exclusively licensed under any Intellectual Property License, including the right to receive damages, or the right to receive license fees, royalties, and other compensation under any Copyright Intellectual Property License.


3. SECURITY FOR OBLIGATIONS. This Copyright Security Agreement and the Security Interest created hereby secures the payment and performance of the Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Copyright Security Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by Grantors, or any of them, to Agent, the Lenders or any of them, whether or not they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Grantor.

4. SECURITY AGREEMENT. The Security Interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interests granted to Agent, for the benefit of the Lenders, pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and remedies of Agent with respect to the Security Interest in the Copyright Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. To the extent there is any inconsistency between this Copyright Security Agreement and the Security Agreement, the Security Agreement shall control.

5. AUTHORIZATION TO SUPPLEMENT. Grantors shall give Agent prior written notice of no less than five Business Days before filing any additional application for registration of any copyright and prompt notice in writing of any additional copyright registrations granted therefor after the date hereof. Without limiting Grantors’ obligations under this Section, Grantors hereby authorize Agent unilaterally to modify this Copyright Security Agreement by amending Schedule I to include any future United States registered copyrights or applications therefor of each Grantor. Notwithstanding the foregoing, no failure to so modify this Copyright Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent’s continuing security interest in all Collateral, whether or not listed on Schedule I.

6. COUNTERPARTS. This Copyright Security Agreement is a Loan Document. This Copyright Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Copyright Security Agreement. Delivery of an executed counterpart of this Copyright Security Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Copyright Security Agreement. Any party delivering an executed counterpart of this Copyright Security Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Copyright Security Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Copyright Security Agreement.

7. CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE PROVISION. THIS COPYRIGHT SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

[SIGNATURE PAGE FOLLOWS]


[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security Agreement to be executed and delivered as of the day and year first above written.

 

GRANTORS:     [NAME OF GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

    [NAME OF GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

AGENT:     ACCEPTED AND ACKNOWLEDGED BY:
   

RUNWAY GROWTH CREDIT FUND INC.,

a Maryland corporation

    By:  

     

    Name:  

 

    Title:  

 


SCHEDULE I

TO

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT REGISTRATIONS

 

Grantor

 

Country

 

Copyright

  

Registration No.

  

Registration Date

         
         
         
         
         
         
         

Copyright Licenses


EXHIBIT B

PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this ___ day of ___________, 20__, by and among the Grantors listed on the signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”), and RUNWAY GROWTH CREDIT FUND INC., as administrative agent and collateral agent for the Lenders (in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated August 20, 2018 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among FISCALNOTE, INC., a Delaware corporation (“Borrower Representative”), CQ-ROLL CALL, INC., a Delaware corporation, CAPITOL ADVANTAGE LLC, a Virginia corporation, VOTERVOICE, L.L.C., a Louisiana limited liability company, SANDHILL STRATEGY LLC, a District of Columbia limited liability company, and each other Person party hereto as a borrower from time to time (collectively, jointly and severally, “Borrowers”, and each, a “Borrower”), FISCALNOTE HOLDINGS, INC., a Delaware corporation (“Parent”), FISCALNOTE HOLDINGS II, INC., a Delaware corporation (together with Parent and each other Person party thereto as a guarantor from time to time collectively, “Guarantors”, and each, a “Guarantor”), the lenders from time to time party thereto (collectively, the “Lenders”, and each, a “Lender”), and Agent, the Lenders have agreed to make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof;

WHEREAS, the Lenders are willing to make the financial accommodations to Borrowers as provided for in the Credit Agreement and the other Loan Documents, but only upon the condition, among others, that the Grantors shall have executed and delivered to Agent, for the benefit of the Lenders, that certain Amended and Restated Security Agreement, dated as of October 19, 2020 (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Security Agreement”); and

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to Agent, for the benefit of the Lenders, this Patent Security Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby agrees as follows:

1. DEFINED TERMS. All initially capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement or, if not defined therein, in the Credit Agreement, and this Patent Security Agreement shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis.

2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit each Lender, to secure the Obligations, a continuing security interest (referred to in this Patent Security Agreement as the “Security Interest”) in all of such Grantor’s right, title and interest in and to the following, whether now owned or hereafter acquired or arising (collectively, the “Patent Collateral”):

(a) all of its Patents and Patent Intellectual Property Licenses to which it is a party including those referred to on Schedule I;

(b) all divisionals, continuations, continuations-in-part, reissues, reexaminations, or extensions of the foregoing; and

(c) all products and proceeds of the foregoing, including any claim by such Grantor against third parties for past, present or future infringement of any Patent or any Patent exclusively licensed under any Intellectual Property License, including the right to receive damages, or right to receive license fees, royalties, and other compensation under any Patent Intellectual Property License.


3. SECURITY FOR OBLIGATIONS. This Patent Security Agreement and the Security Interest created hereby secures the payment and performance of the Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Patent Security Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by Grantors, or any of them, to Agent, the Lenders or any of them, whether or not they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Grantor.

4. SECURITY AGREEMENT. The Security Interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interests granted to Agent, for the benefit of the Lenders, pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and remedies of Agent with respect to the Security Interest in the Patent Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. To the extent there is any inconsistency between this Patent Security Agreement and the Security Agreement, the Security Agreement shall control.

5. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new patent application or issued patent or become entitled to the benefit of any patent application or patent for any divisional, continuation, continuation-in-part, reissue, or reexamination of any existing patent or patent application, the provisions of this Patent Security Agreement shall automatically apply thereto. Grantors shall give prompt notice in writing to Agent with respect to any such new patent rights. Without limiting Grantors’ obligations under this Section, Grantors hereby authorize Agent unilaterally to modify this Patent Security Agreement by amending Schedule I to include any such new patent rights of each Grantor. Notwithstanding the foregoing, no failure to so modify this Patent Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent’s continuing security interest in all Collateral, whether or not listed on Schedule I.

6. COUNTERPARTS. This Patent Security Agreement is a Loan Document. This Patent Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Patent Security Agreement. Delivery of an executed counterpart of this Patent Security Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Patent Security Agreement. Any party delivering an executed counterpart of this Patent Security Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Patent Security Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Patent Security Agreement.

7. CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE PROVISION. THIS PATENT SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

[SIGNATURE PAGE FOLLOWS]


[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Patent Security Agreement to be executed and delivered as of the day and year first above written.

 

GRANTORS:     [NAME OF GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

    [NAME OF GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

AGENT:     ACCEPTED AND ACKNOWLEDGED BY:
   

RUNWAY GROWTH CREDIT FUND INC.,

a Maryland corporation

    By:  

     

    Name:  

 

    Title:  

 


SCHEDULE I

to

PATENT SECURITY AGREEMENT

Patents

 

Grantor

 

Country

 

Patent

  

Application/ Patent No.

  

Filing Date

         
         
         
         
         
         
         

Patent Licenses


EXHIBIT C

PLEDGED INTERESTS ADDENDUM

This Pledged Interests Addendum, dated as of _________ __, 20___ (this “Pledged Interests Addendum”), is delivered pursuant to Section 7 of the Security Agreement referred to below. The undersigned hereby agrees that this Pledged Interests Addendum may be attached to that certain Amended and Restated Security Agreement, dated as of October 19, 2020, (as amended, restated, supplemented, or otherwise modified from time to time, the “Security Agreement”), made by the undersigned, together with the other Grantors named therein, to RUNWAY GROWTH CREDIT FUND INC., as Agent. Initially capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Security Agreement or, if not defined therein, in the Credit Agreement, and this Pledged Interests Addendum shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis. The undersigned hereby agrees that the additional interests listed on Schedule I shall be and become part of the Pledged Interests pledged by the undersigned to Agent in the Security Agreement and any pledged company set forth on Schedule I shall be and become a “Pledged Company” under the Security Agreement, each with the same force and effect as if originally named therein.

This Pledged interests Addendum is a Loan Document. Delivery of an executed counterpart of this Pledged Interests Addendum by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Pledged Interests Addendum. If the undersigned delivers an executed counterpart of this Pledged Interests Addendum by telefacsimile or other electronic method of transmission, the undersigned shall also deliver an original executed counterpart of this Pledged Interests Addendum but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Pledged Interests Addendum.

The undersigned hereby certifies that the representations and warranties set forth in Section 6 of the Security Agreement of the undersigned are true and correct as to the Pledged Interests listed herein on and as of the date hereof.

THIS PLEDGED INTERESTS ADDENDUM SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

[SIGNATURE PAGE FOLLOWS]


[SIGNATURE PAGE TO PLEDGED INTERESTS ADDENDUM]

IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum to be executed and delivered as of the day and year first above written.

 

[___________________]
Name:
Title:


SCHEDULE I

TO

PLEDGED INTERESTS ADDENDUM

Pledged Interests

 

Name of Grantor

  

Name of Pledged
Company

  

Number of Shares/
Units

  

Class of Interests

  

Percentage of
Class Owned

  

Certificate Nos.

              
              


EXHIBIT D

TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made this ___ day of ___________, 20__, by and among Grantors listed on the signature pages hereof (collectively, jointly and severally, “Grantors” and each individually “Grantor”), and RUNWAY GROWTH CREDIT FUND INC., as administrative agent and collateral agent for the Lenders (in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated August 20, 2018 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among FISCALNOTE, INC., a Delaware corporation (“Borrower Representative”), CQ-ROLL CALL, INC., a Delaware corporation, CAPITOL ADVANTAGE LLC, a Virginia corporation, VOTERVOICE, L.L.C., a Louisiana limited liability company, SANDHILL STRATEGY LLC, a District of Columbia limited liability company, and each other Person party hereto as a borrower from time to time (collectively, jointly and severally, “Borrowers”, and each, a “Borrower”), FISCALNOTE HOLDINGS, INC., a Delaware corporation (“Parent”), FISCALNOTE HOLDINGS II, INC., a Delaware corporation (together with Parent and each other Person party thereto as a guarantor from time to time collectively, “Guarantors”, and each, a “Guarantor”), the lenders from time to time party thereto (collectively, the “Lenders”, and each, a “Lender”), and Agent, the Lenders have agreed to make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof;

WHEREAS, the Lenders are willing to make the financial accommodations to Borrowers as provided for in the Credit Agreement and the other Loan Documents, but only upon the condition, among others, that Grantors shall have executed and delivered to Agent, for the benefit of Lenders, that certain Amended and Restated Security Agreement, dated as of October 19, 2020 (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Security Agreement”); and

WHEREAS, pursuant to the Security Agreement, Grantors are required to execute and deliver to Agent, for the benefit of the Lenders, this Trademark Security Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Grantor hereby agrees as follows:

1. DEFINED TERMS. All initially capitalized terms used but not otherwise defined herein have the meanings given to them in the Security Agreement or, if not defined therein, in the Credit Agreement, and this Trademark Security Agreement shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis.

2. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. Each Grantor hereby unconditionally grants, assigns, and pledges to Agent, for the benefit each Lender, to secure the Obligations, a continuing security interest (referred to in this Trademark Security Agreement as the “Security Interest”) in all of such Grantor’s right, title and interest in and to the following, whether now owned or hereafter acquired or arising (collectively, the “Trademark Collateral”):

(a) all of its Trademarks and Trademark Intellectual Property Licenses to which it is a party including those referred to on Schedule I;

(b) all goodwill of the business connected with the use of, and symbolized by, each Trademark and each Trademark Intellectual Property License; and

(c) all products and proceeds (as that term is defined in the Code) of the foregoing, including any claim by such Grantor against third parties for past, present or future (i) infringement or dilution of any Trademark or any Trademarks exclusively licensed under any Intellectual Property License, including right to receive any damages, (ii) injury to the goodwill associated with any Trademark, or (iii) right to receive license fees, royalties, and other compensation under any Trademark Intellectual Property License.


3. SECURITY FOR OBLIGATIONS. This Trademark Security Agreement and the Security Interest created hereby secures the payment and performance of the Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Trademark Security Agreement secures the payment of all amounts which constitute part of the Obligations and would be owed by Grantors, or any of them, to Agent, the Lenders or any of them, whether or not they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Grantor.

4. SECURITY AGREEMENT. The Security Interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interests granted to Agent, for the benefit of the Lenders, pursuant to the Security Agreement. Each Grantor hereby acknowledges and affirms that the rights and remedies of Agent with respect to the Security Interest in the Trademark Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. To the extent there is any inconsistency between this Trademark Security Agreement and the Security Agreement, the Security Agreement shall control.

5. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any new trademarks, the provisions of this Trademark Security Agreement shall automatically apply thereto. Grantors shall give prompt notice in writing to Agent with respect to any such new trademarks or renewal or extension of any trademark registration. Without limiting Grantors’ obligations under this Section, Grantors hereby authorize Agent unilaterally to modify this Trademark Security Agreement by amending Schedule I to include any such new trademark rights of each Grantor. Notwithstanding the foregoing, no failure to so modify this Trademark Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from Agent’s continuing security interest in all Collateral, whether or not listed on Schedule I.

6. COUNTERPARTS. This Trademark Security Agreement is a Loan Document. This Trademark Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Trademark Security Agreement. Delivery of an executed counterpart of this Trademark Security Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Trademark Security Agreement. Any party delivering an executed counterpart of this Trademark Security Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Trademark Security Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Trademark Security Agreement.

7. CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE PROVISION. THIS TRADEMARK SECURITY AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

[SIGNATURE PAGE FOLLOWS]


[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]

IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security Agreement to be executed and delivered as of the day and year first above written.

 

GRANTORS:     [NAME OF GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

    [NAME OF GRANTOR]
    By:  

     

    Name:  

 

    Title:  

 

AGENT:     ACCEPTED AND ACKNOWLEDGED BY:
   

RUNWAY GROWTH CREDIT FUND INC.,

a Maryland corporation

    By:  

     

    Name:  

 

    Title:  

 


SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

Trademark Registrations/Applications

 

 

Grantor

 

Country

 

Mark

  

Application/ Registration
No.

  

App/Reg Date

         
         
         
         
         
         
         
         
         

Trade Names

Common Law Trademarks

Trademarks Not Currently In Use

Trademark Licenses

Exhibit 10.9

FISCALNOTE HOLDINGS, INC.

2022 LONG-TERM INCENTIVE PLAN

ADOPTED BY THE BOARD OF DIRECTORS: June 30, 2022

APPROVED BY THE SHAREHOLDERS: July 27, 2022

SECTION 1. PURPOSE

FiscalNote Holdings, Inc. hereby establishes this 2022 Long-Term Incentive Plan (the “Plan”). This Plan is intended to (i) attract and retain the best available personnel to ensure the success of the Company (as defined below) and its Affiliates (as defined below) and accomplish the goals of the Company and its Affiliates; (ii) to incentivize selected Eligible Persons (as defined below) with long-term incentive awards to align their interests with the interests of the Company’s stockholders; and (iii) to promote the success of the business of the Company and its Affiliates.

SECTION 2. DEFINITIONS

As used in the Plan, the following terms have the meanings set forth below:

 

  (a)

Adoption Date” means the date the Plan is first approved by the Board.

 

  (b)

Affiliate” shall mean (i) any entity that, directly or through one or more intermediaries, is controlled by the Company and (ii) any entity in which the Company has a significant equity interest, as determined by the Committee.

 

  (c)

Applicable Law” shall mean the legal requirements that apply to the Plan and Awards granted hereunder in any given circumstance as shall be in place from time to time under any statute, law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or order of any governmental authority, whether of the United States, any other country, and any provincial, state, or local subdivision, that relate to the administration of equity plans or equity awards, as well as any applicable stock exchange or automated quotation system rules or regulations.

 

  (d)

Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Award, Dividend Equivalent, Other Stock-Based Award or cash award granted under the Plan.

 

  (e)

Award Agreement” shall mean any written agreement, contract, or other instrument or document, including an electronic communication, as may from time to time be designated by the Company as evidencing any Award granted under the Plan.

 

  (f)

Beneficial Owner” shall have the meaning attributed thereto in the Exchange Act.

 

  (g)

Board” shall mean the Board of Directors of the Company.

 

  (h)

Business Combination Agreement” means the Business Combination Agreement, dated as of November 7, 2021, by and among the Company and the other parties thereto, as it may be amended and/or restated from time to time.

 

  (i)

Cause” will exist (unless another definition is provided in an applicable Option Agreement, employment agreement or other applicable written agreement that provides that such other definition applies to an Award hereunder) if the Company reasonably determines that the Participant engaged in (i) any breach by Participant of any written agreement between Participant and the Company; (ii) any failure by Participant to comply with the Company’s written policies or rules as the same may be in effect from time to time; (iii) neglect or persistent unsatisfactory performance of Participant’s duties; (iv) Participant’s repeated failure to follow reasonable and

 

1


lawful instructions from the Board or Chief Executive Officer; (v) Participant’s commission, conviction of, or plea of guilty or nolo contendere to, any felony or any crime that results in, or is reasonably expected to result in, material harm to the business or reputation of the Company; (vi) Participant’s commission of or participation in any act (A) that causes material harm to the business or reputation of the Company; or (B) of fraud against the Company; (vii) Participant’s damage to the Company’s business, property or reputation; or (viii) Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company. For purposes of clarity, a termination without “Cause” does not include any termination that occurs as a result of Participant’s death or Disability. The determination as to whether a Participant’s Continuous Service has been terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting or other service relationship at any time, and the term “Company” will be interpreted to include any subsidiary, parent, Affiliate, or any successor thereto, if appropriate. Furthermore, a Participant’s Continuous Service shall be deemed to have terminated for Cause within the meaning hereof if, at any time (whether before, on, or after termination of the Participant’s Continuous Service, regardless of whether the Participant initiated the termination of the Participant’s Continuous Service), the Company’s becomes aware of facts that would have been Cause if the Company had known of all relevant facts.

 

  (j)

Change in Control” shall mean the first of the following to occur after the Effective Date:

 

  (i)

Acquisition of Controlling Interest. Any Person becomes the Beneficial Owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities; provided that the foregoing shall exclude any bona fide sale of securities of the Company by the Company to one or more third parties for purposes of raising capital. In applying the preceding sentence, an agreement to vote securities shall be disregarded unless its ultimate purpose is to cause what would otherwise be a Change in Control, as reasonably determined by the Board.

 

  (ii)

Merger. The Company consummates a merger or consolidation of the Company with any other entity unless: (a) the voting securities of the Company outstanding immediately before the merger or consolidation would continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; and (b) no Person becomes, as a result of such merger or consolidation, the Beneficial Owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities.

 

  (iii)

Sale of Assets. The sale or disposition by the Company of all, or substantially all, of the Company’s assets.

 

  (iv)

Liquidation or Dissolution. The liquidation or dissolution of the Company.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which (I) the holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions, or (II) any Person who was a Beneficial Owner, directly or indirectly, of securities in the Company representing 50% or more acquires additional securities in the Company. In addition, a “Change in Control” shall not be deemed to have occurred by virtue of the consummation of the transactions contemplated by the Business Combination Agreement.

 

2


  (k)

Code” shall mean the Internal Revenue Code of 1986, as amended from time to time and the rules and regulations issued thereunder.

 

  (l)

Committee” shall mean a committee of the Board, acting in accordance with the provisions of Section 3, designated by the Board to administer the Plan and composed of not less than two (2) non-Employee Directors. The initial Committee shall be the Compensation Committee of the Board.

 

  (m)

Company” shall mean FiscalNote Holdings, Inc. and, to the extent determined appropriate by the Board, in its sole discretion, any Affiliate or successor thereto.

 

  (n)

Consultant” shall mean any person (other than an Employee or Director), including an advisor, who is engaged by the Company or any Affiliate to render services and is compensated for such services. A Consultant includes non-natural persons, to the extent permitted by Applicable Law.

 

  (o)

Continuous Service” shall mean a Participant’s period of service in the absence of any interruption or termination of service as an Employee, Consultant, or Director. Continuous Service as an Employee or Consultant shall not be considered interrupted or terminated in the case of: (i) Company-approved sick leave; (ii) military leave; (iii) any other bona fide leave of absence approved by the Company, provided that, if an Employee is holding an Incentive Stock Option and such leave exceeds three (3) months then, for purposes of Incentive Stock Option status only, such Employee’s service as an Employee shall be deemed terminated on the first day following such three (3) month period and the Incentive Stock Option shall thereafter automatically become a Non-Qualified Stock Option in accordance with Applicable Laws, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy. Also, Continuous Service as an Employee or Consultant shall not be considered interrupted or terminated in the case of a transfer between locations of the Company or between the Company, its parents, subsidiaries or Affiliates, or their respective successors, or a change in status from an Employee to a Consultant or Director or from a Consultant or Director to an Employee.

 

  (p)

Director” shall mean a member of the Board, or a member of the board of directors of an Affiliate.

 

  (q)

Disability” shall mean “disability” within the meaning of Section 22(e)(3) of the Code.

 

  (r)

Dividend Equivalent” shall mean any right granted under Section 6(e) of the Plan.

 

  (s)

Effective Date” means the later of (i) the date on which the Plan is approved by the stockholders of the Company, and (ii) the day that is one day prior to the date of the closing of the transactions contemplated by the Business Combination Agreement.

 

  (t)

Eligible Person” shall mean (i) an Employee, Consultant, or Director, or (ii) a non-Employee, non-Consultant, or non-Director to whom an offer of a service relationship as an Employee, Consultant, or Director has been extended.

 

  (u)

Employee” shall mean any person whom the Company or any Affiliate classifies as an employee (including an officer) for employment tax purposes or, if in a jurisdiction that does not have employment taxes, any person whom the Company or any Affiliate classifies as an employee (including an officer), in either case whether or not that classification is correct. The payment by the Company of director’s fees to a Director shall not constitute “employment” of such Director by the Company.

 

3


  (v)

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

  (w)

Fair Market Value” shall mean, with respect to any Shares or other securities, the closing price of a Share or other security on the date as of which the determination is being made or as otherwise determined in a manner specified by the Committee.

 

  (x)

Grant Date” shall mean the later of (i) the date designated as the “Grant Date” within an Award Agreement and (ii) the date on which the Committee determines the key terms of an Award, provided that as soon as reasonably practicable thereafter the Company both notifies the Eligible Person of the Award and issues an Award Agreement to the Eligible Person.

 

  (y)

Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that is intended to meet the requirements of Section 422 of the Code, or any successor provision thereto.

 

  (z)

Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.

 

  (aa)

“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

 

  (bb)

Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

 

  (cc)

Other Stock-Based Award” shall mean any right granted under Section 6(f) of the Plan.

 

  (dd)

Participant” shall mean an Eligible Person designated to be granted an Award under the Plan.

 

  (ee)

Performance Award” shall mean any right granted under Section 6(d) of the Plan.

 

  (ff)

Performance Criteria” shall mean any quantitative and/or qualitative measures, as determined by the Committee, which may be used to measure the level of performance of the Company or any individual Participant during a Performance Period.

 

  (gg)

Performance Period” shall mean any period as determined by the Committee in its sole discretion.

 

  (hh)

Person” shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization, or government or political subdivision thereof.

 

  (ii)

Restricted Stock” shall mean any Award of Shares granted under Section 6(c) of the Plan.

 

  (jj)

Restricted Stock Unit” shall mean any restricted stock unit granted under Section 6(c) of the Plan that is denominated in Shares.

 

  (kk)

Shares” shall mean the Class A common stock of the Company, and such other securities as may become the subject of Awards, or become subject to Awards, pursuant to an adjustment made under Section 4(b) of the Plan.

 

  (ll)

Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.

 

  (mm)

10% Stockholder” means a Person who, as of a relevant date, owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company.

 

4


SECTION 3. ADMINISTRATION

Except as otherwise provided herein, the Plan shall be administered by the Committee, which shall have the power to interpret the Plan and to adopt such rules and guidelines for implementing the terms of the Plan as it may deem appropriate; provided, however, that the Board may act in lieu of the Committee on any matter. The Committee shall have the ability to modify the Plan provisions, to the extent necessary, or delegate such authority, to accommodate any changes in Applicable Law.

 

  (a)

Subject to the terms of the Plan and Applicable Law, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to each Participant under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which payments, rights, or other matters are to be calculated in connection with) Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, or other Awards, or terminated, forfeited, cancelled or suspended, and the method or methods by which Awards may be settled, exercised, terminated, forfeited, cancelled or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (viii) establish, amend, suspend, or waive such rules and guidelines; (ix) appoint such agents as it shall deem appropriate for the proper administration of the Plan; (x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan; and (xi) correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it deems desirable.

 

  (b)

Without limiting the foregoing, the Committee shall have the discretion to interpret or construe ambiguous, unclear, or implied (but omitted) terms as it deems to be appropriate in its sole discretion and to make any findings of fact needed in the administration of this Plan or Award Agreements. The Committee’s prior exercise of its discretionary authority shall not obligate it to exercise its authority in a like fashion thereafter. The Committee’s interpretation and construction of any provision of this Plan, or of any Award or Award Agreement, and all determinations the Committee or the Company makes pursuant to this Plan shall be final, binding, and conclusive (subject only to the Committee’s or the Company’s inherent authority to change their determinations). The validity of any such interpretation, construction, decision or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and shall be upheld unless clearly affected by fraud.

 

  (c)

Any determination made by the Committee or the Company with respect to any provisions of this Plan may be made on an Award-by-Award basis. The Committee and the Company have no obligation to be uniform, consistent, or nondiscriminatory between classes of similarly situated Eligible Persons, Participants, Awards or Award Agreements, except as required by Applicable Law.

 

  (d)

The Board or any Committee may delegate to one or more Officers the authority to do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and Stock Appreciation Rights (and, to the extent permitted by Applicable Law, other types of Awards) and, to the extent permitted by Applicable Law, the terms thereof, and (ii) determine the number of Shares to be subject to such Awards granted to such Employees; provided, however, that the resolutions or charter adopted by the Board or any Committee evidencing such delegation will specify the total number of Shares that may be subject to the Awards granted by such Officer and that such Officer may not grant an Award to himself or herself. Any such Awards will be granted on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, unless otherwise provided in the resolutions approving the delegation authority. Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) the authority to determine the Fair Market Value

 

5


  (e)

CLAIMS LIMITATION PERIOD. Any Participant who believes he or she is being denied any benefit or right under this Plan or under any Award or Award Agreement may file a written claim with the Committee. Any claim must be delivered to the Committee within six (6) months of the specific event giving rise to the claim. Untimely claims generally will not be processed and shall be deemed denied. The Committee, or its designee, generally will notify the Participant of its decision in writing as soon as administratively practicable. Claims shall be deemed denied if the Committee does not respond in writing within one-hundred eighty (180) days of the date the written claim is delivered to the Committee. The Committee’s decision (or deemed decision) is final and conclusive and binding on all Persons. No lawsuit or arbitration relating to this Plan may be filed or commenced before a written claim is filed with the Committee and is denied or deemed denied, and any lawsuit must be filed within one (1) year of such denial or deemed denial or be forever barred.

 

  (f)

NO LIABILITY; INDEMNIFICATION. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board or the Committee, shall be liable for any act, omission, interpretation, construction, or determination made in good faith with respect to this Plan, any Award, or any Award Agreement. The Company shall pay or reimburse any Director, Employee, or Consultant who in good faith takes action on behalf of this Plan, for all expenses incurred with respect to this Plan, and to the full extent allowable under Applicable Law shall indemnify each and every one of them for any claims, liabilities, and costs (including reasonable attorneys’ fees) arising out of their good faith performance of duties on behalf of this Plan. The Company may, but shall not be required to, obtain liability insurance for this purpose.

 

  (g)

EXPENSES. The Company shall bear the expenses of administering this Plan.

 

SECTION

4. SHARES AVAILABLE FOR AWARDS AND NON-EMPLOYEE DIRECTOR COMPENSATION LIMITS

 

  (a)

SHARES AVAILABLE. Subject to adjustment as provided in this Section 4:

 

  (i)

The aggregate number of Shares that may be issued pursuant to Awards is 20,285,600 Shares, plus a number of Shares that will automatically be increased on January 1 of each year for a period of five years commencing on January 1, 2023 and ending on (and including) January 1, 2027, in an amount equal to the lesser of (i) 3% of the total number of Shares outstanding on December 31 of the preceding year, or (ii) 13,523,734 Shares; provided, however, that the Board may act prior to January 1st of a given year to provide that the increase for such year will be a lesser number of Shares. This is the “Share Reserve.” No more than 100% of the Shares in the Share Reserve shall be available for delivery pursuant to the exercise of Incentive Stock Options.

 

  (ii)

If any Shares issued to a Participant under the Plan are subject to an Award that is terminated, forfeited or cancelled (e.g., unvested Awards of Restricted Stock), or settled in cash the Share Reserve shall be increased by the number of Shares underlying such Award. If Shares are withheld in satisfaction of withholding taxes or payment of exercise price then the Shares so withheld or used in payment shall be available for Awards under the Plan and the Share Reserve shall be increased by the same number of Shares as the Share Reserve was decreased on account of such Shares, if any.

 

  (iii)

ACCOUNTING FOR AWARDS. For purposes of this Section 4, unless the Committee determines otherwise:

 

  (A)

if an Award (other than a Dividend Equivalent) is denominated in Shares, the number of Shares covered by such Award, or to which such Award relates, shall be counted on the date of grant of such Award against the aggregate number of Shares available for granting Awards under the Plan;

 

6


  (B)

Dividend Equivalents denominated in Shares and Awards not denominated, but potentially payable, in Shares shall be counted against the aggregate number of Shares available for granting Awards under the Plan in such amount and at such time as the Dividend Equivalents and such Awards are settled in Shares. Any Shares that are delivered by the Company, and any Awards that are granted by, or become obligations of, the Company through the assumption by the Company or an Affiliate of, or in substitution for, outstanding awards previously granted by an acquired company, whether through an asset or equity transaction, shall not be counted against the Shares available for granting Awards under this Plan; and

 

  (C)

Shares subject to Awards that qualify as inducement grants under NYSE Listing Rule 303A.08 or its successor shall not be counted against the Share Reserve.

 

  (iv)

SOURCES OF SHARES DELIVERABLE UNDER AWARDS. The Shares to be issued, transferred, and/or sold under the Plan shall be made available from authorized and unissued Shares or from the Company’s treasury shares.

 

  (b)

ADJUSTMENTS.

 

  (i)

In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Shares, or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event constitutes an equity restructuring, or otherwise affects the Shares, then the Committee will adjust the following in a manner that is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan:

 

  (A)

the number and type of Shares or other securities which thereafter may be made the subject of Awards including the limit specified in the Share Reserve;

 

  (B)

the number and type of Shares or other securities subject to outstanding Awards;

 

  (C)

the grant, purchase, or exercise price with respect to any Award, or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; and

 

  (D)

other value determinations applicable to outstanding Awards.

provided, however, that the number of Shares subject to any Award denominated in Shares shall always be a whole number.

 

  (ii)

ADJUSTMENTS OF AWARDS ON CERTAIN ACQUISITIONS. In the event that a company acquired by the Company or any Affiliate, or with which the Company or any Affiliate combines, has shares available under a pre-existing plan approved by its stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other formula used in such transaction to determine the consideration payable to the holders of common stock of such acquired company) may be used for similar Awards under the Plan and shall not reduce the Share Reserve; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed, immediately before such acquisition or combination, by the post-transaction listed company or entities that were its subsidiaries immediately before the transaction.

 

7


  (iii)

ADJUSTMENTS OF AWARDS ON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING EVENTS. The Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or of changes in Applicable Law or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits to be made available under the Plan.

 

  (iv)

DISSOLUTION OR LIQUIDATION. Except as otherwise provided in an Award Agreement, in the event of the dissolution or liquidation of the Company other than as part of a Change in Control, each Award will terminate immediately prior to the consummation of such dissolution or liquidation, subject to the ability of the Committee to exercise any discretion authorized in the case of a Change in Control.

 

  (v)

CHANGE IN CONTROL. In the event of a Change in Control but subject to the terms of any Award Agreements or employment-related agreements between the Company or any Affiliates and any Participant, each outstanding Award may be assumed or a substantially equivalent award may be substituted by the surviving or successor company or a parent or subsidiary of such successor company (in each case, the “Successor Company”) upon consummation of the transaction. Notwithstanding the foregoing, instead of having outstanding Awards be assumed or substituted with equivalent awards by the Successor Company, the Committee may in its sole and absolute discretion and authority, without obtaining the approval or consent of the Company’s stockholders or any or all Participant(s), take one or more of the following actions:

 

  (A)

accelerate the vesting of Awards so that some or all Awards shall vest (and, to the extent applicable, become exercisable) as to some or all of the Shares that otherwise would have been unvested and/or provide that repurchase rights of the Company, if any, with respect to Shares issued pursuant to an Award shall lapse;

 

  (B)

arrange or otherwise provide for the payment of cash or other consideration to Participants in exchange for the satisfaction and cancellation of all or some outstanding Awards (based on the Fair Market Value, on the date of the Change in Control, of the Award being cancelled, based on any reasonable valuation method selected by the Committee); provided that the Committee shall have full discretion to unilaterally cancel (A) either all Awards or only select Awards (such as only those that have vested on or before the Change in Control), and (B) any Options or Stock Appreciation Rights whose exercise price is equal to or greater than the Fair Market Value of the Shares, as of the date of the Change in Control, with such cancellation being without the payment of any consideration whatsoever to those Participants whose Options and Stock Appreciation Rights are being cancelled;

 

  (C)

terminate all or some Awards upon the consummation of the transaction without payment of any consideration, subject to the notice requirements of Section 8(o); or

 

  (D)

make such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary or appropriate.

 

8


SECTION 5. ELIGIBILITY

Any Eligible Person is eligible to be designated a Participant. The Committee shall determine which Eligible Persons may receive Awards. If the Committee does not determine that an Eligible Person is to receive a specific Award, he or she shall not be entitled to any such Award. Each Award shall be evidenced by an Award Agreement that: sets forth the Grant Date and all other terms and conditions of the Award; is signed on behalf of the Company (unless the Committee determines otherwise); and (unless waived by the Committee) is signed by the Eligible Person in acceptance of the Award. The grant of an Award shall not obligate the Company or any Affiliate to continue the employment or service of any Eligible Person, or to provide any future Awards or other remuneration at any time thereafter.

SECTION 6. AWARDS

 

  (a)

OPTIONS. The Committee is authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan, as the Committee shall determine:

 

  (i)

EXERCISE PRICE. The purchase price per Share purchasable under an Option shall be determined by the Committee; provided, however, and except as provided in Section 4(b), that such purchase price shall not be less than (A) 100% of the Fair Market Value of a Share on the date of grant of such Option or (B) if the Person to whom an Incentive Stock Option is granted is a 10% Stockholder on the date of grant, the exercise price shall be not less than 110% of the Fair Market Value on the date the Incentive Stock Option is granted. However, an Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424 of the Code or Treasury Regulation Section 1.409A-1(b)(5)(v)(D).

 

  (ii)

OPTION TERM. The term of each Option shall not exceed ten (10) years from the date of grant; provided, however, that with respect to Incentive Stock Options issued to 10% Stockholders, the term of each such Option shall not exceed five (5) years from the date it is granted.

 

  (iii)

TIME AND METHOD OF EXERCISE. The Committee shall establish in the applicable Award Agreement the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms, including, without limitation, cash, Shares, or other Awards, “net exercise”, broker-assisted cashless exercise, or any combination thereof, having a Fair Market Value on the exercise date equal to the relevant exercise price, in which, payment of the exercise price with respect thereto may be made or deemed to have been made. The Company shall not be required to deliver Shares pursuant to the exercise of an Option and the Option will be deemed unexercised until the Company has received sufficient funds or value to cover the full exercise price due and all applicable withholding obligations. The Committee may in its sole discretion set forth in an Award Agreement that a Participant may exercise an unvested Option, in which case the Shares then issued shall be restricted Shares having the same vesting restrictions as the unvested Option.

 

  (iv)

TERMINATION OF CONTINUOUS SERVICE. The Committee may set forth in the applicable Award Agreement, or a severance agreement, employment agreement, service agreement or severance plan, the terms and conditions by which an Option is exercisable, if at all, after the date of a Participant’s termination of Continuous Service. The Committee may waive or modify these provisions at any time. To the extent that a Participant is not entitled to exercise an Option on the date of a Participant’s termination of Continuous Service, or if the Participant (or other Person entitled to exercise the Option) does not exercise the Option within the time and as specified in the Award Agreement or below (as applicable), the Option shall terminate. Notwithstanding the

 

9


  foregoing, if the Company has a contingent contractual obligation to provide for accelerated vesting or extended exercisability after termination of a Participant’s Continuous Service, such Options shall not terminate at the time they otherwise would terminate but instead shall remain outstanding, but unexercisable, until the maximum contractual time for determining whether such contingency will occur, and terminate at such time if the contingency has not then occurred; provided that no such extension shall cause an Option to be exercisable after the ten (10) year anniversary of its Grant Date or the date such Option otherwise would have terminated had the Participant remained in Continuous Service.

Subject to the preceding paragraph and Section 6(a)(vi) and to the extent an Award Agreement, or a severance agreement, employment agreement, service agreement or severance plan, does not otherwise specify the terms and conditions on which an Option shall terminate when a Participant terminates Continuous Service, the following provisions apply:

 

Reason for Terminating Continuous Service    Option Termination Date
(I) By the Company for Cause, or what would have been Cause if the Company had known all of the relevant facts, or due to Participant’s material breach of his or her unexpired employment agreement or independent contractor agreement with the Company.    All Options, whether or not vested, shall immediately expire effective on the date of termination of the Participant’s Continuous Service, or when Cause first existed if earlier.
(II) Disability or death of the Participant during Continuous Service (in either case unless Reason I applies).    All unvested Options shall immediately expire effective as of the date of termination of the Participant’s Continuous Service, and all vested and unexercised Options shall expire twelve (12) months after such termination.
(III) Any other reason.    All unvested Options shall immediately expire effective on the date of termination of the Participant’s Continuous Service. All vested and unexercised Options, to the extent unexercised, shall expire effective ninety (90) days after the date of termination of the Participant’s Continuous Service.

 

  (v)

BLACKOUT PERIODS. If there is a blackout period (whether under the Company’s insider trading policy, Applicable Law, or a Committee-imposed blackout period) that prohibits buying or selling Shares during any part of the ten (10) day period before an Option expires (as described above), the Option exercise period shall be extended until ten (10) days beyond the end of the blackout period. Notwithstanding anything to the contrary in this Plan or any Award Agreement, no Option can be exercised beyond the latest date its original term expires as set forth in the Award Agreement

 

  (vi)

COMPANY CANCELLATION RIGHT. Subject to Applicable Law, if the Fair Market Value for Shares subject to any Option is more than 33% below the Option’s exercise price for more than ninety (90) consecutive business days, the Committee unilaterally may declare the Option terminated, effective on the date the Committee provides written notice to the Option holder. The Committee may take such action with respect to any or all Options granted under the Plan and with respect to any individual Option holder or class(es) of Option holders.

 

10


  (vii)

NON-EXEMPT EMPLOYEES. An Option granted to an Employee who is non-exempt for purposes of the Fair Labor Standards Act of 1938, as amended, will not be first exercisable for any Shares until at least six (6) months after the Grant Date of the Option (although the Award may vest prior to such date). Notwithstanding the foregoing, consistent with the provisions of the Worker Economic Opportunity Act, the vested portion of any Options may be exercised earlier than six (6) months after the Grant Date: (A) if the non-exempt Employee dies or suffers a Disability; (B) in connection with a corporate transaction in which the Option is not assumed, continued, or substituted; (C) on a Change in Control; or (D) on the Participant’s retirement (as may be defined in the Participant’s Award Agreement or other agreement with the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines). The foregoing provision is intended to operate so that any income derived by a non-exempt Employee in connection with the exercise or vesting of an Option will be exempt from his or her regular rate of pay.

 

  (viii)

INCENTIVE STOCK OPTIONS. By law, only Employees are eligible to receive Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall be designed to comply in all respects with the provisions of Section 422 of the Code, or any successor provision thereto, and any regulations promulgated thereunder. Notwithstanding anything in this Section 6(a) to the contrary, Options designated as Incentive Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and will be deemed to be Non-Qualified Stock Options) to the extent that either (A) the aggregate Fair Market Value of Shares (determined as of the time of grant) with respect to which such Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any subsidiary) exceeds $100,000, taking Options into account in the order in which they were granted, or (B) such Options otherwise remain exercisable but are not exercised within three (3) months of termination of Continuous Service (or such other period of time provided in Section 422 of the Code).

 

  (b)

STOCK APPRECIATION RIGHTS. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants. Subject to the terms of the Plan and any applicable Award Agreement, a Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, on exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the grant price of the right as specified by the Committee.

 

  (i)

GRANT PRICE. The grant price shall be determined by the Committee, provided, however, and except as provided in Section 4(b), that such price shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right, except that if a Stock Appreciation Right is at any time granted in tandem with an Option, the grant price of the Stock Appreciation Right shall not be less than the exercise price of such Option.

 

  (ii)

TERM. The term of each Stock Appreciation Right shall not exceed ten (10) years from the date of grant.

 

  (iii)

OTHER RULES. The rules of Sections 6(a)(iii) – 6(a)(viii) shall apply to Stock Appreciation Rights as if the Award were an Option.

 

  (c)

RESTRICTED STOCK AND RESTRICTED STOCK UNITS.

 

  (i)

ISSUANCE. The Committee is hereby authorized to grant Awards of Restricted Stock and Restricted Stock Units to Participants. Restricted Stock Units represent a Participant’s right to be issued Shares on a future date. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any Restricted Stock Unit unless and until Shares are actually issued in settlement of the Restricted Stock Unit.

 

11


  (ii)

RESTRICTIONS. Shares of Restricted Stock and Restricted Stock Units shall be subject to such restrictions as the Committee may establish in the applicable Award Agreement (including, without limitation, any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. Subject to Applicable Law, the Committee may make Awards of Restricted Stock and Restricted Stock Units with or without the requirement for payment of cash or other consideration.

 

  (iii)

REGISTRATION. Any Restricted Stock or Restricted Stock Units granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including, without limitation, book-entry registration or issuance of a stock certificate or certificates in the case of Restricted Stock. In the event any stock certificate is issued in respect of Shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock. Unrestricted Shares, evidenced in such manner as the Committee shall deem appropriate, shall be delivered to the holder of Restricted Stock promptly after such restrictions have lapsed.

 

  (iv)

FORFEITURE. On termination of Continuous Service during the applicable vesting period, except as otherwise determined by the Committee, all Shares of Restricted Stock and all Restricted Stock Units still, in either case, subject to restriction or vesting, as applicable, shall be forfeited and, to the extent applicable, reacquired by the Company. However, if the Participant paid cash or other consideration for Restricted Stock that is so forfeited, the Company shall return to the Participant the lower of the Fair Market Value of the Shares on the date of forfeiture or their original purchase price, to the extent set forth in an Award Agreement or required by Applicable Law.

 

  (d)

PERFORMANCE AWARDS. The Committee is hereby authorized to grant Performance Awards to Participants. Performance Awards include arrangements under which the grant, issuance, retention, vesting and/or transferability of any Award are subject to Performance Criteria and such additional conditions or terms as the Committee may designate. Subject to the terms of the Plan and any applicable Award Agreement, a Performance Award granted under the Plan:

 

  (i)

may be denominated or payable in cash, Shares (including, without limitation, Restricted Stock), other securities, or other Awards; and

 

  (ii)

shall confer on the holder thereof rights valued as determined by the Committee and payable to, or exercisable by, the holder of the Performance Award, in whole or in part, on the achievement of such performance goals during such Performance Periods as the Committee shall establish.

 

  (iii)

AMENDMENT OF PERFORMANCE CRITERIA. After a Performance Award has been granted, the Committee may, if it determines appropriate, amend any Performance Criteria, at its sole and absolute discretion.

 

  (iv)

SATISFACTION OF PERFORMANCE CRITERIA. If, as a result of the applicable Performance Criteria being met, a Performance Award becomes vested and/or exercisable in respect of some, but not all of the number of Shares underlying such Award, which did not become vested and exercisable by the end of the Performance Period, such Performance Award shall thereupon lapse and cease to be exercisable in respect of the balance of the Shares which did not vest and/or become exercisable by the end of the Performance Period.

 

12


  (e)

DIVIDEND EQUIVALENTS. The Committee is hereby authorized to grant to Participants Awards (other than Options and Stock Appreciation Rights) under which the holders thereof shall be entitled to receive payments equivalent to dividends or interest with respect to a number of Shares determined by the Committee, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested. Subject to the terms of the Plan and any applicable Award Agreement, such Awards may have such terms and conditions as the Committee shall determine.

 

  (f)

OTHER STOCK-BASED AWARDS. The Committee is authorized to grant to Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as are deemed by the Committee to be consistent with the purposes of the Plan, provided, however, that such grants must comply with Applicable Law. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of such Awards. Shares or other securities delivered pursuant to a purchase right granted under this Section 6(f) shall be purchased for such consideration, as the Committee shall determine, the value of which consideration, as established by the Committee, and except as provided in Section 4(b), shall not be less than the Fair Market Value of such Shares or other securities as of the date such purchase right is granted.

 

  (g)

GENERAL.

 

  (i)

CASH CONSIDERATION FOR AWARDS. Awards may be granted for no cash consideration or for such cash consideration as may be required by Applicable Law or determined by the Committee; however, Participants may be required to pay any amount the Committee determines in connection with Awards not inconsistent with the terms of this Plan.

 

  (ii)

AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award or any award granted under any other plan of the Company or any Affiliate.

 

  (iii)

FORMS OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan and of any applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate on the grant, exercise, or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, rights in or to Shares issuable under the Award or other Awards, other securities, or other Awards, or any combination thereof, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of installment or deferred payments.

 

  (iv)

LIMITS ON TRANSFER OF AWARDS. Except as provided by the Committee, no Award and no right under any such Award shall be assignable, alienable, saleable, or transferable by a Participant otherwise than by will or by the laws of descent and distribution provided, however, that, if so determined by the Committee, a Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Participant with respect to any Award on the death of the Participant. Each Award, and each right under any Award, shall be exercisable, during the Participant’s lifetime, only by the Participant or, if permissible under Applicable Law, by the Participant’s guardian or legal representative. No Award and no right under any such Award, may be pledged, alienated, attached, or otherwise encumbered, and any purported pledge, alienation, attachment, or encumbrance thereof shall be void and unenforceable against the Company or any Affiliate.

 

13


  (v)

CONDITIONS AND RESTRICTIONS ON SECURITIES SUBJECT TO AWARDS. The Committee may provide that the Shares issued on exercise of an Option or Stock Appreciation Right or otherwise subject to or issued under an Award shall be subject to such further agreements, restrictions, conditions or limitations as the Committee in its discretion may specify prior to the exercise of such Option or Stock Appreciation Right or the grant, vesting or settlement of such Award, including, without limitation, conditions on vesting or transferability and forfeiture or repurchase provisions or provisions on payment of taxes arising in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any re-sales by the Participant or other subsequent transfers by the Participant of any Shares issued under an Award, including without limitation: (A) restrictions under an insider trading policy or pursuant to Applicable Law, (B) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and holders of other Company equity compensation arrangements, (C) restrictions as to the use of a specified brokerage firm for such re-sales or other transfers and (D) provisions requiring Shares to be sold on the open market or to the Company in order to satisfy tax withholding or other obligations. The Committee shall include in any Award Agreement any claw back or forfeiture provisions required by Applicable Law. The Committee also may include in any Award Agreement provisions providing for forfeiture of the Award or requiring the Participant to return the Shares underlying the Award to the Company in the event the Participant engages in specified behavior that is adverse to the Company’s interests, including after termination of his or her service relationship with the Company, such as for competing with the Company, soliciting its Employees, or breaching a written agreement with the Company.

 

  (vi)

RECOUPMENT OF AWARDS. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law and any clawback policy that the Company otherwise adopts, to the extent applicable and permissible under Applicable Law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Committee determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired Shares or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right to voluntarily terminate employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company.

 

  (vii)

ELECTRONIC DELIVERY AND PARTICIPATION. Any reference herein or in an Award Agreement to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award the Participant consents to receive documents by electronic delivery and to participate in the Plan through any on-line electronic system established and maintained by the Company or another third party selected by the Company. The form of delivery of any Shares (e.g., a stock certificate or electronic entry evidencing such Shares) shall be determined by the Company.

 

  (viii)

SHARE CERTIFICATES. All Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange on which such Shares or other securities are then listed, and any applicable federal, state, or local securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

14


SECTION 7. AMENDMENT AND TERMINATION

The Plan shall terminate on the ten (10) year anniversary of its approval by the Board, but no such termination shall affect any outstanding grants under the Plan. Except to the extent prohibited by Applicable Law and unless otherwise expressly provided in an Award Agreement or in the Plan:

 

  (a)

AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend, discontinue, or terminate the Plan, in whole or in part; provided, however, that without the prior approval of the Company’s stockholders, no material amendment shall be made if stockholder approval is required by Applicable Law; and provided, further, that, notwithstanding any other provision of the Plan or any Award Agreement, no such amendment, alteration, suspension, discontinuation, or termination shall be made without the approval of the stockholders of the Company that would:

 

  (i)

increase the total number of Shares available for Awards under the Plan, except as provided in Section 4 hereof;

 

  (ii)

materially expand the class of Eligible Persons under the Plan, materially increase the benefits accruing to Participants under the Plan, materially extend the term of the Plan with respect to Share-based Awards, or expand the types of Share-based Awards available for issuance under the Plan; or

 

  (iii)

except as provided in Section 4(b), permit Options, Stock Appreciation Rights, or Other Stock-Based Awards encompassing rights to purchase Shares to be repriced, replaced, or regranted through cancellation, or by lowering the exercise price of a previously granted Option or the grant price of a previously granted Stock Appreciation Right, or the purchase price of a previously granted Other Stock-Based Award.

 

  (b)

AMENDMENTS TO AWARDS. The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue, or terminate, any Awards theretofore granted, prospectively or retroactively. No such action shall be taken that would impair the rights of any Participant, without such Participant’s consent, under any Award theretofore granted, provided that no such consent shall be required with respect to any such action if such action is taken under Section 6(a)(vi) hereof or if the Committee determines in its sole discretion that such amendment or alteration either (i) is required or advisable in order for the Company, the Plan or the Award to satisfy or conform to Applicable Law or to meet the requirements of any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits provided under such Award. Notwithstanding the foregoing, subject to the limitations of Applicable Law, if any, and without the affected Participant’s consent, the Board may amend the terms of any one or more Awards if necessary to maintain the qualified status of the Award as an ISO or to bring the Award into compliance with Section 409A of the Code.

SECTION 8. GENERAL PROVISIONS

 

  (a)

NO RIGHTS TO AWARDS. No Eligible Person, Participant or other Person shall have any claim to be granted any Award under the Plan, or, having been selected to receive an Award under this Plan, to be selected to receive a future Award, and further there is no obligation for uniformity of treatment of Eligible Persons, Participants, or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient.

 

15


  (b)

WITHHOLDING. The Company or any Affiliate shall be authorized to withhold from any Award granted or any payment due or transfer made under any Award or under the Plan the amount (in cash, Shares, other securities, or other Awards) of withholding taxes due in respect of an Award, its exercise, or any payment or transfer under such Award or under the Plan and to take such other action as may be necessary in the opinion of the Company or Affiliate to satisfy statutory withholding obligations for the payment of such taxes. Notwithstanding any provision of this Plan or an Award Agreement to the contrary, Participants are solely responsible and liable for the satisfaction of all taxes and penalties that may arise in connection with Awards, and neither the Company, nor any Affiliate, nor any of their employees, directors, or agents, shall have any duty or obligation to mitigate, minimize, indemnify, or to otherwise hold any Participant harmless from any or all of such tax consequences. The Company’s obligation to deliver Shares (or to pay cash or other consideration) to Participants pursuant to Awards is at all times subject to such Participant’s prior or coincident satisfaction of all withholding taxes.

 

  (c)

NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in the Plan shall prevent the Company or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.

 

  (d)

NO RIGHT TO EMPLOYMENT OR CONTINUED SERVICE. The grant of an Award shall not constitute an employment or services contract nor be construed as giving a Participant the right to be retained in the employ or services of the Company or any Affiliate. Further, the Company or an Affiliate may at any time dismiss a Participant from employment or services, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.

 

  (e)

GOVERNING LAW AND VENUE. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware and applicable Federal law without regard to conflict of law. For purposes of litigating any dispute that arises directly or indirectly under the Plan, the parties to any Award Agreement agree to submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the state courts of Delaware or the federal courts for the United States for Delaware, and no other courts.

 

  (f)

SEVERABILITY. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to Applicable Law, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

 

  (g)

NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.

 

  (h)

NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be cancelled, terminated, or otherwise eliminated.

 

  (i)

HEADINGS. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.

 

16


  (j)

COMPLIANCE WITH THE CODE. Except to the extent specifically provided otherwise by the Committee, Awards under the Plan are intended to satisfy the requirements of Section 409A of the Code so as to avoid the imposition of any additional taxes or penalties under Section 409A of the Code. If the Committee determines that an Award, Award Agreement, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section 409A of the Code, or adverse tax consequences under another Code provision, then unless the Committee specifically provides otherwise, such Award, Award Agreement, payment, distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A of the Code or another Code provision to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Participant. Notwithstanding the foregoing or any provision of the Plan or an Award Agreement to the contrary, Participants shall be solely responsible for the satisfaction of any taxes or interest or other consequence that may arise pursuant to Awards (including taxes arising under Code Section 409A), and neither the Company nor the Committee nor anyone other than the Participant, his or her estate or beneficiaries shall have any obligation whatsoever to pay such taxes or interest or to otherwise indemnify or hold any Participant harmless from any or all of such taxes.

 

  (k)

CODE SECTIONS 280G AND 4999. Notwithstanding anything else contained in the Plan or any other document to the contrary, in no event shall the vesting of any Award or payment be accelerated to an extent or in a manner so that such Award or payment, together with any other compensation and benefits provided to, or for the benefit of, a Participant under any other plan or agreement of the Company or its Affiliates, would not be fully deductible by the Company or one of its Affiliates for U.S. federal income tax purposes because of Section 280G of the Code, unless the Participant would be better off on an after tax basis after paying applicable income and excise taxes as determined by the Committee in its sole discretion (“Better Off”). If a holder of an Award would be entitled to benefits or payments hereunder or under any other plan or program that would constitute “parachute payments” as defined in Section 280G of the Code, then, unless the Participant would be Better Off not having such benefits or payments reduced, the Company shall reduce or eliminate such parachute payments in the following order so that the Company or one of its Affiliates is not denied federal income tax deductions because of Section 280G of the Code: cash severance benefits shall be reduced or eliminated first, then any accelerated vesting of Awards shall be reduced or eliminated, and finally any other benefits to which the Participant is or may be entitled shall be reduced or eliminated. Notwithstanding the foregoing, if a Participant is a party to a written agreement with the Company or one of its Affiliates, or is a participant in a severance program sponsored by the Company or one of its Affiliates that contains express provisions regarding Section 280G and/or Section 4999 of the Code (or any similar successor provision), or the applicable Award Agreement includes such provisions, the Section 280G and/or Section 4999 provisions of such other agreement or plan, as applicable, shall control as to the Awards held by that Participant.

 

  (l)

NO REPRESENTATIONS OR COVENANTS WITH RESPECT TO TAX QUALIFICATION. Although the Company may endeavor to (i) qualify an Award for favorable U.S. or foreign tax treatment or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on holders of Awards under the Plan.

 

  (m)

AWARDS TO NON-U.S. EMPLOYEES AND OTHER SERVICE PROVIDERS. The Committee shall have the power and authority to determine which Affiliates shall be covered by this Plan and which employees or other service providers outside the U.S. shall be eligible to participate in the Plan. The Committee may adopt, amend or rescind rules, procedures or sub-plans relating to the operation and administration of the Plan to accommodate the specific requirements of local laws, procedures, and practices. Without limiting the generality of the

 

17


  foregoing, the Committee is specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify rights on death, Disability or on termination of Continuous Service; available methods of exercise or settlement of an Award; payment of income, social insurance contributions and payroll taxes; and the withholding procedures and handling of any stock certificates or other indicia of ownership which vary with local requirements. The Committee may also adopt rules, procedures or sub-plans applicable to particular Affiliates or locations.

 

  (n)

DATA PRIVACY. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of personal data as described in this section by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering, and managing this Plan and Awards and the Participant’s participation in this Plan. In furtherance of such implementation, administration, and management, the Company and its Affiliates may hold certain personal information about a Participant with respect to one or more Awards under the Plan, including, but not limited to, the Participant’s name, home address, telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), information regarding any securities of the Company or any of its Affiliates, and details of all Awards (the “Data”). In addition to transferring the Data amongst themselves as necessary for the purpose of implementation, administration, and management of this Plan and Awards and the Participant’s participation in this Plan, the Company and its Affiliates each may transfer the Data to any third parties assisting the Company in the implementation, administration, and management of this Plan and Awards and the Participant’s participation in this Plan. Recipients of the Data may be located in the Participant’s country or elsewhere, and the Participant’s country and any given recipient’s country may have different data privacy laws and protections. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of assisting the Company in the implementation, administration, and management of this Plan and Awards and the Participant’s participation in this Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. A Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant, or refuse or withdraw the consents herein in writing, in any case without cost, by contacting such Participant’s local human resources representative. The Company may cancel the Participant’s eligibility to participate in this Plan, and in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents described herein. For more information on the consequences of refusal to consent or withdrawal of consent, Participants may contact their local human resources representative.

 

  (o)

NO DUTY TO NOTIFY. The Company shall have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising an Award. Furthermore, the Company shall have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised.

Notwithstanding the foregoing to the contrary, the Company shall take reasonable steps to notify Participants holding then outstanding Awards regarding the occurrence of a Change in Control; provided, further, that if pursuant to the Change in Control outstanding Awards shall be cancelled for no consideration, such notice shall be provided at least five (5) business days prior to the occurrence of the Change in Control (or such shorter period as the Committee may determine is reasonable in its sole discretion taking into account the potential need for confidentiality with respect to a Change in Control). For purposes of the foregoing, the Company providing notice via email to (i) a Participant’s Company email address for Participants who are then in Continuous Service, or (ii) the personal email address in the Company’s personnel records for a Participant no longer in Continuous Service shall be deemed to be reasonable steps to notify a Participant on the part of the Company.

 

18


  (p)

NO STOCKHOLDER RIGHTS. Neither a Participant nor any transferee or beneficiary of a Participant shall have any rights or status as a stockholder of the Company with respect to any Shares underlying any Award until the date of issuance of a stock certificate to such Participant, transferee, or beneficiary for such Shares in accordance with the Company’s governing instruments and Applicable Law, and if Shares are not certificated, the date the Company’s records are updated to reflect the Participant’s (or transferee’s or beneficiary’s) status as a stockholder with respect to the Shares in accordance with the Company’s governing instruments and Applicable Law. Prior to the issuance of Shares or Restricted Stock pursuant to an Award, a Participant shall not have the right to vote or to receive dividends or any other rights as a stockholder with respect to the Shares underlying the Award (unless otherwise provided in the Award Agreement for Restricted Stock), notwithstanding its exercise in the case of Options and Stock Appreciation Rights. No adjustment will be made for a dividend or other right that is determined based on a record date prior to the date the share certificate is issued, except as otherwise specifically provided for in this Plan or an Award Agreement.

 

  (q)

COMPLIANCE WITH LAWS. The granting of Awards and the issuance of Shares under the Plan shall be subject to all Applicable Law. The Company shall have no obligation to issue or deliver evidence of title for Shares issued under the Plan prior to:

 

  (i)

obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and

 

  (ii)

completion of any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable or at a time when any such registration or qualification is not current, has been suspended or otherwise has ceased to be effective.

The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. Notwithstanding anything to the contrary herein or in any Award Agreement, the Committee shall have the absolute discretion to impose a “blackout” period on the exercise of any Option or Stock Appreciation Right, as well as the settlement of any Award, with respect to any or all Participants to the extent the Committee determines that doing so is desirable or required to comply with applicable securities laws.

SECTION 9. ADOPTION DATE; EFFECTIVE DATE

The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the Effective Date.

 

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Exhibit 10.10

FISCALNOTE HOLDINGS, INC.

2022 EMPLOYEE STOCK PURCHASE PLAN

ADOPTED BY THE BOARD OF DIRECTORS: June 30, 2022

APPROVED BY THE SHAREHOLDERS: July 27, 2022

1. GENERAL; PURPOSE.

(a) The Plan provides a means by which Eligible Employees of the Company and certain Designated Companies may be given an opportunity to purchase shares of Common Stock. The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan. In addition, the Plan permits the Company to grant a series of Purchase Rights to Eligible Employees that do not meet the requirements of an Employee Stock Purchase Plan.

(b) The Plan includes two components: a 423 Component and a Non-423 Component. The Company intends (but makes no undertaking or representation to maintain) the 423 Component to qualify as an Employee Stock Purchase Plan. The provisions of the 423 Component, accordingly, will be administered, interpreted and construed in a manner that is consistent with the requirements of Section 423 of the Code. Except as otherwise provided in the Plan or determined by the Board, the Non-423 Component will operate and be administered in the same manner as the 423 Component.

(c) The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations.

2. ADMINISTRATION.

(a) The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c). References herein to the Board shall be deemed to refer to the Committee where such administration has been delegated.

(b) The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) to determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical);

(ii) to designate from time to time (A) which Related Corporations will be eligible to participate in the Plan as Designated 423 Corporations, (B) which Related Corporations or Affiliates will be eligible to participate in the Plan as Designated Non-423 Corporations, (C) which Designated Companies will participate in each separate Offering (to the extent that the Company makes separate Offerings).

 

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(iii) to construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it deems necessary or expedient to make the Plan fully effective;

(iv) to settle all controversies regarding the Plan and Purchase Rights granted under the Plan;

(v) to suspend or terminate the Plan at any time as provided in Section 12(b);

(vi) to amend the Plan at any time as provided in Section 12(a);

(vii) generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan with respect to the 423 Component; and

(viii) to adopt such rules, procedures and sub-plans as are necessary or appropriate to permit or facilitate participation in the Plan by Employees who are foreign nationals or employed or located outside the United States. Without limiting the foregoing, the Board specifically is authorized to adopt rules, procedures, and sub-plans regarding, without limitation, eligibility to participate in the Plan, the definition of Compensation, handling and making of Contributions, establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share issuances, any of which may vary according to applicable requirements, and which, if applicable to a Designated Non-423 Corporation, do not have to comply with the requirements of Section 423 of the Code.

(c) The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. Whether or not the Board has delegated administration of the Plan to a Committee, the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.

(d) All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

 

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3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

(a) Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the maximum number of shares of Common Stock that may be issued under the Plan will not exceed 3,267,750 shares of Common Stock, plus the number of shares of Common Stock that are automatically added on January 1st of each year for a period of up to five years, commencing on the first January 1st following the year in which the Plan is adopted and ending on (and including) January 1, 2027, in an amount equal to the lesser of (i) one percent (1%) of the total number of shares of Capital Stock outstanding on December 31st of the preceding calendar year, and (ii) 3,267,750 shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year to provide that there will be no January 1st increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For the avoidance of doubt, up to the maximum number of shares of Common Stock reserved under this Section 3(a) may be used to satisfy purchases of Common Stock under the 423 Component and any remaining portion of such maximum number of shares may be used to satisfy purchases of Common Stock under the Non-423 Component.

(b) If any Purchase Right granted under the Plan terminates without having been exercised in full, the shares of Common Stock not purchased under such Purchase Right will again become available for issuance under the Plan.

(c) The shares purchasable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market.

4. GRANT OF PURCHASE RIGHTS; OFFERING.

(a) The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and, in the case of the 423 Component, will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges, except for differences that are mandated by local law and consistent with Section 423(b)(5) of the Code; provided, however, that Employees participating in a sub-plan that is not designed to qualify under Section 423 of the Code need not have the same rights and privileges as other Employees participating in the Plan. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive. The Company may impose restrictions on eligibility and participation of Eligible Employees who are officers and directors to facilitate compliance with federal or state securities laws or foreign laws.

 

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(b) If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in forms delivered to the Company: (i) each form will apply to all of his or her Purchase Rights under the Plan (and, if there is more than one such form, the latest filed form will apply unless otherwise indicated), and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.

(c) The Board will have the discretion to structure an Offering so that if the Fair Market Value of a share of Common Stock on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of a share of Common Stock on the Offering Date for that Offering, then (i) that Offering will terminate immediately as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.

5. ELIGIBILITY.

(a) Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation. Except as provided in Section 5(b) or as required by applicable law, an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company or the Related Corporation, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event will the required period of continuous employment be two years or longer. In addition, the Board may (unless prohibited by law) provide that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company or the Related Corporation or the Affiliate is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code with respect to the 423 Component. The Board may also exclude from participation in the Plan or any Offering Employees who are “highly compensated employees” (within the meaning of Section 423(b)(4)(D) of the Code) of the Company or a Related Corporation or a subset of such highly compensated employees.

(b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering that coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering. Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:

(i) the date on which such Purchase Right is granted will be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;

(ii) the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and

 

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(iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Purchase Right under that Offering.

(c) No Employee will be eligible for the grant of any Purchase Rights if, immediately after any such Purchase Rights are granted, such Employee owns shares possessing five percent or more of the total combined voting power or value of all classes of Capital Stock of the Company or of any Related Corporation. For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the stock ownership of any Employee, and shares that such Employee may purchase under all outstanding Purchase Rights and options will be treated as shares owned by such Employee.

(d) As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations, do not permit such Eligible Employee’s rights to purchase shares of the Company or any Related Corporation to accrue at a rate that, when aggregated, exceeds US $25,000 of Fair Market Value of such shares (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time.

(e) Officers of the Company and any Designated Company, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may (unless prohibited by applicable law) provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.

(f) Notwithstanding anything in this Section 5 to the contrary, in the case of an Offering under the Non-423 Component, an Eligible Employee (or group of Eligible Employees) may be excluded from participation in the Plan or an Offering if the Board has determined, in its sole discretion, that participation of such Eligible Employee(s) is not advisable or practical for any reason.

6. PURCHASE RIGHTS; PURCHASE PRICE.

(a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to 25,000 shares of Common Stock (or such lesser number of shares determined by the Board prior to the commencement of the Offering), but not exceeding 15% (or such lesser percentage determined by the Board prior to the commencement of an Offering) of such Employee’s Compensation during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.

(b) The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and shares of Common Stock will be purchased in accordance with such Offering. Unless the Board determines otherwise, Offerings and Purchase Periods shall be concurrent six-month periods, commencing on January 1 and July 1 of each year, with the first such Offering and Purchase Period commencing on January 1, 2022.

 

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(c) In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of shares of Common Stock that may be purchased by any Participant on any Purchase Date during such Offering, (ii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants pursuant to such Offering and/or (iii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. Unless the Board determines otherwise, the maximum number of shares that all Participants may purchase in the aggregate on any Purchase Date is ten percent (10%) of the available share reserve under this Plan as of the date of the commencement of the Offering. If the aggregate purchase of shares of Common Stock issuable on exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participant’s accumulated Contributions) allocation of the shares of Common Stock (rounded down to the nearest whole share) available will be made in as nearly a uniform manner as will be practicable and equitable.

(d) The purchase price of shares of Common Stock acquired pursuant to Purchase Rights will not be less than the lesser of:

(i) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the Offering Date; or

(ii) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date.

7. PARTICIPATION; WITHDRAWAL; TERMINATION.

(a) An Eligible Employee may elect to participate in an Offering and authorize payroll deductions as the means of making Contributions by completing and delivering to the Company, within the time specified in the Offering, an enrollment form provided by the Company. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participant’s Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where applicable law or regulations requires that Contributions be deposited with a third party. If permitted in the Offering, a Participant may begin such Contributions with the first payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering). If permitted in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. Except as otherwise determined by the Board, a Participant only will be permitted to increase or reduce his or her Contributions once per Offering. If required under applicable law or regulations or if specifically provided in the Offering, in addition to or instead of making Contributions by payroll deductions, a Participant may make Contributions through payment by cash, check or wire transfer prior to a Purchase Date.

 

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(b) During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company a withdrawal form provided by the Company. The Company may impose a deadline before a Purchase Date for withdrawing. On such withdrawal, such Participant’s Purchase Right in that Offering will immediately terminate, and the Company will distribute as soon as practicable to such Participant all of his or her accumulated but unused Contributions, without interest or earnings (unless otherwise required by applicable law) and such Participant’s Purchase Right in that Offering shall thereupon terminate. A Participant’s withdrawal from that Offering will have no effect on his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.

(c) Unless otherwise required by applicable law or regulations, Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason (subject to any post-employment participation period required by applicable law) or (ii) is otherwise no longer eligible to participate. The Company will distribute as soon as practicable to such individual all of his or her accumulated but unused Contributions without interest or earnings (unless otherwise required by applicable law).

(d) Unless otherwise determined by the Board, a Participant whose employment transfers or whose employment terminates with an immediate rehire (with no break in service) by or between the Company and a Designated Company or between Designated Companies will not be treated as having terminated employment for purposes of participating in the Plan or an Offering; however, if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s Purchase Right will be qualified under the 423 Component only to the extent such exercise complies with Section 423 of the Code. If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the Purchase Right will remain non-qualified under the Non-423 Component. The Board may establish different and additional rules governing transfers between separate Offerings within the 423 Component and between Offerings under the 423 Component and Offerings under the Non-423 Component.

(e) During a Participant’s lifetime, Purchase Rights will be exercisable only by such Participant. Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution or, if permitted by the Company, by a beneficiary designation as described in Section 10.

(f) Unless otherwise specified in the Offering or required by applicable law or regulations, the Company will have no obligation to pay interest on Contributions.

8. EXERCISE OF PURCHASE RIGHTS.

(a) On each Purchase Date, each Participant’s accumulated Contributions will be applied to the purchase of shares of Common Stock, up to the maximum number of shares of Common Stock permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares will be issued unless specifically provided for in the Offering. Unless the Board determines otherwise, shares will be deposited directly with a Plan

 

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Broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. Unless the Board determines otherwise, a Participant must retain such shares with the Plan Broker until the later of the two-year anniversary of the date of grant of the associated Purchase Rights or the one-year anniversary of the exercise date of the associated Purchase Rights, but unless the Board elects to restrict dispositions during such period, a Participant may sell the shares at any time after the shares are deposited with a Plan Broker.

(b) Unless otherwise provided in the Offering, if any amount of accumulated Contributions remains in a Participant’s account after the purchase of shares of Common Stock on the final Purchase Date of an Offering, then such remaining amount will not roll over to the next Offering and will instead be distributed in full to such Participant after the final Purchase Date of such Offering without interest or earnings (unless otherwise required by applicable law or regulations).

(c) No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued on such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act, and the Plan is in material compliance with all applicable U.S. federal, state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and the Purchase Date will be delayed until the shares of Common Stock are subject to such an effective registration statement, and the Plan is in material compliance, except that the Purchase Date will in no event be more than 27 months from the Offering Date. If, on the Purchase Date, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in material compliance with all applicable laws and regulations, as determined by the Company in its sole discretion, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed to the Participants without interest.

9. COVENANTS OF THE COMPANY.

The Company will seek to obtain from each U.S. federal, state, foreign or other regulatory commission or agency or governmental body having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell shares of Common Stock thereunder unless the Company determines, in its sole discretion, that doing so is not practical or would cause the Company to incur costs that are unreasonable. If, after commercially reasonable efforts, the Company is unable to obtain the authority that counsel for the Company deems necessary for the grant of Purchase Rights or the lawful issuance and sale of Common Stock under the Plan, and at a commercially reasonable cost, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Common Stock on exercise of such Purchase Rights.

10. DESIGNATION OF BENEFICIARY.

(a) The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any shares of Common Stock and/or Contributions from the Participant’s account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant. The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company.

 

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(b) If a Participant dies, and in the absence of a valid beneficiary designation, the Company will deliver any shares of Common Stock and/or Contributions to the executor or administrator of the estate of the Participant. If no executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Common Stock and/or Contributions, without interest, to the Participant’s spouse, dependents or relatives, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

11. ADJUSTMENTS ON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.

(a) In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering. The Board will make these adjustments, and its determination will be final, binding and conclusive.

(b) In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the shareholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the Participants’ accumulated Contributions will be used to purchase shares of Common Stock (rounded down to the nearest whole share) within ten business days prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.

12. AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.

(a) The Board may amend the Plan at any time in any respect the Board deems necessary or advisable. However, except as provided in Section 11(a) relating to Capitalization Adjustments, shareholder approval will be required for any amendment of the Plan for which shareholder approval is required by applicable law, regulations or listing requirements.

(b) The Board may suspend or terminate the Plan at any time. No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.

 

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(c) Any benefits, privileges, entitlements and obligations under any outstanding Purchase Rights granted before an amendment, suspension or termination of the Plan will not be materially impaired by any such amendment, suspension or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to comply with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Stock Purchase Plans) including without limitation any such regulations or other guidance that may be issued or amended after the date the Plan is adopted by the Board, or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment. To be clear, the Board may amend outstanding Purchase Rights without a Participant’s consent if such amendment is necessary to ensure that the Purchase Right and/or the Plan complies with the requirements of Section 423 of the Code with respect to the 423 Component or with respect to other applicable laws. Notwithstanding anything in the Plan or any Offering Document to the contrary, the Board will be entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars; (ii) permit Contributions in excess of the amount designated by a Participant in order to adjust for mistakes in the Company’s processing of properly completed Contribution elections; (iii) establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Contributions; (iv) amend any outstanding Purchase Rights or clarify any ambiguities regarding the terms of any Offering to enable the Purchase Rights to qualify under and/or comply with Section 423 of the Code with respect to the 423 Component; and (v) establish other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan. The actions of the Board pursuant to this paragraph will not be considered to alter or impair any Purchase Rights granted under an Offering as they are part of the initial terms of each Offering and the Purchase Rights granted under each Offering.

13. TAX QUALIFICATION; TAX WITHHOLDING.

(a) Although the Company may endeavor to (i) qualify a Purchase Right for special tax treatment under the laws of the United States or jurisdictions outside of the United States or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain special or to avoid unfavorable tax treatment, notwithstanding anything to the contrary in this Plan. The Company will be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants.

(b) Each Participant will make arrangements, satisfactory to the Company and any applicable Related Corporation, to enable the Company or the Related Corporation to fulfill any withholding obligation for Tax-Related Items. Without limitation to the foregoing, in the Company’s sole discretion and subject to applicable law, such withholding obligation may be satisfied in whole or in part by (i) withholding from the Participant’s salary or any other cash payment due to the Participant from the Company or a Related Corporation; (ii) withholding from the proceeds of the sale of shares of Common Stock acquired under the Plan, either through a voluntary sale or a mandatory sale arranged by the Company; or (iii) any other method deemed acceptable by the Board. The Company shall not be required to issue any shares of Common Stock under the Plan until such obligations are satisfied

 

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14. EFFECTIVE DATE OF PLAN.

The Plan will become effective immediately prior to and contingent on the occurrence of the Closing Date. No Purchase Rights will be exercised unless and until the Plan has been approved by the shareholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.

15. MISCELLANEOUS PROVISIONS.

(a) Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights will constitute general funds of the Company.

(b) A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock subject to Purchase Rights unless and until the Participant’s shares of Common Stock acquired on exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).

(c) The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering will in any way alter the at-will nature of a Participant’s employment, if applicable, or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company, a Related Corporation or an Affiliate, or on the part of the Company, a Related Corporation or an Affiliate to continue the employment of a Participant.

(d) To the extent that United States federal laws do not otherwise control, this Plan and all determinations made and actions taken pursuant to this Plan shall be governed by the internal laws of the State of Delaware, without giving effect to principles of conflicts of laws, and construed accordingly.

(e) If any particular provision of the Plan is found to be invalid or otherwise unenforceable, such provision will not affect the other provisions of the Plan, but the Plan will be construed in all respects as if such invalid provision was omitted.

(f) If any provision of the Plan does not comply with applicable law or regulations, such provision shall be construed in such a manner as to comply with applicable law or regulations.

16. DEFINITIONS.

As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

(a) “423 Component” means the part of the Plan, which excludes the Non-423 Component, pursuant to which Purchase Rights that satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.

 

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(b) “Affiliate” means any entity, other than a Related Corporation, whether now or subsequently established, which is at the time of determination, a “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

(c) “Board means the Board of Directors of the Company.

(d) [Reserved].

(e) “Capital Stock means each and every class of common stock of the Company, regardless of the number of votes per share.

(f) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

(g) “Closing Date” means the date of the closing of the transactions contemplated by that certain Business Combination Agreement, dated as of November 7, 2021, by and among the Company and the other parties thereto, as it may be amended and/or restated from time to time.

(h) “Code means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

(i) “Committee means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).

(j) “Common Stock” means the Class A common stock of the Company.

(k) “Company” means FiscalNote Holdings, Inc., a Delaware corporation, or any successor to all or substantially all of its businesses by merger, amalgamation, consolidation, purchase of assets or otherwise.

(l) “Compensation” means an Eligible Employee’s cash compensation, including, without limitation, regular and recurring straight time gross earnings, payments for overtime and shift premium, as well as cash payments for incentive compensation, bonuses and other similar compensation. The Board or the Committee, may, on a uniform and nondiscriminatory basis, establish a different definition of Compensation for an Offering prior to the commencement of such Offering.

 

12


(m) “Contributions” means the payroll deductions and other additional payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions.

(n) “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its subsidiaries;

(ii) a sale or other disposition of the outstanding voting securities of the Company representing 50% or more of the combined voting power of the outstanding voting securities of the Company;

(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

(o) Designated 423 Corporation” means any Related Corporation selected by the Board to participate in the 423 Component.

(p) “Designated Company” means any Designated Non-423 Corporation or Designated 423 Corporation, provided, however, that at any given time, a Related Corporation participating in the 423 Component shall not be a Related Corporation participating in the Non-423 Component.

(q) “Designated Non-423 Corporation” means any Related Corporation or Affiliate selected by the Board to participate in the Non-423 Component.

(r) “Director means a member of the Board.

(s) “Eligible Employee means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.

(t) “Employee means any person who is the Company’s (or a Related Corporation’s) Code Section 3401(c) employee. Notwithstanding anything to the contrary in this Plan, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan. For purposes of an individual’s participation in, or other rights under the Plan, all determinations by the Company shall be final, binding and conclusive, notwithstanding that any court of law or governmental agency

 

13


subsequently makes a contrary determination. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company or Related Corporation and meeting the requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the first day immediately following such three (3) month period.”

(u) “Employee Stock Purchase Plan means a plan that grants Purchase Rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code.

(v) “Exchange Act means the U.S. Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.

(w) “Fair Market Value” means, as of any date, the value of the Common Stock is determined as follows:

(i) if the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be the closing sales price for such shares as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in such source as the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists; and

(ii) in the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith in compliance with applicable laws and regulations and in a manner that is intended to comply with Section 409A of the Code.

(x) “Non-423 Component” means the part of the Plan, which excludes the 423 Component, pursuant to which Purchase Rights that are not intended to satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.

(y) “Offering means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the “Offering Document” approved by the Board for that Offering.

(z) “Offering Date” means a date selected by the Board for an Offering to commence.

(aa) “Officer” means a person who is an officer of the Company or a Related Corporation within the meaning of Section 16 of the Exchange Act.

(bb) “Participant means an Eligible Employee who holds an outstanding Purchase Right.

 

14


(cc) “Plan means this FiscalNote Holdings, Inc. 2022 Employee Stock Purchase Plan.

(dd) “Plan Broker” means a broker designated by the Company.

(ee) “Purchase Date means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of shares of Common Stock will be carried out in accordance with such Offering.

(ff) “Purchase Period” means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods.

(gg) “Purchase Right means an option to purchase shares of Common Stock granted pursuant to the Plan.

(hh) “Related Corporation means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

(ii) “Securities Act means the U.S. Securities Act of 1933, as amended.

(jj) “Tax-Related Items” means any income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items arising out of or in relation to a Participant’s participation in the Plan, including, but not limited to, the exercise of a Purchase Right and the receipt of shares of Common Stock or the sale or other disposition of shares of Common Stock acquired under the Plan.

(kk) “Trading Day” means any day on which the exchange(s) or market(s) on which shares of Common Stock are listed, including but not limited to the New York Stock Exchange, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.

 

15

Exhibit 10.11

FiscalNote Holdings, Inc.

2022 Long-Term Incentive Plan

NOTICE OF PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD

FiscalNote Holdings, Inc. (“Company”) has awarded to you (“Participant”) performance-based restricted stock units (“PSUs”) covering the number of Shares set forth below (the “PSU Award”) under the FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan (the “Plan”). Your “Award Agreement” applicable to the PSUs consists of (a) this Notice of Performance-Based Stock Unit Award (this “Notice”), and (b) the attached Standard Terms and Conditions for Performance-Based Restricted Stock Units (PSUs) (the “PSU Terms and Conditions”), including the Performance Vesting Terms. Capitalized terms used but not defined in this Award Agreement will have the same meanings specified in the Plan.

 

Name of Participant:   

 

  
Grant Date:   

 

  
Grant ID:   

 

  
[Target/Maximum] Number of PSUs:   

 

  
Country at Grant:    United States   

Vesting Commencement

Date:

  

 

  
Vesting Schedule:    As provided in Exhibit A to this Notice (the “Performance Vesting Terms”)

By accepting (whether electronically or otherwise) the PSU Award, you acknowledge and agree to the following:

 

1.

The PSU Award is governed by the terms and conditions of this Award Agreement and the Plan. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.

 

2.

You have received a copy of the Plan, this Award Agreement, the Plan prospectus, and the FiscalNote Holdings, Inc. Insider Trading Policy (“Trading Policy”), and represent that you have read these documents and are familiar with their terms. You further agree to accept as binding, conclusive, and final all decisions and interpretations of the Committee regarding any questions relating to the PSU Award and the Plan.

 

3.

Vesting of the PSUs is subject to your Continuous Service as an Employee, Director, or Consultant (except as provided in the Performance Vesting Terms), which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement or the Plan changes the nature of that relationship.

 

4.

The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. You should consult with your own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.

 

5.

If you do not accept or decline this PSU Award within 90 days of the Grant Date or by such other date that may be communicated to you by the Company, the Company will accept this PSU Award on your behalf and you will be deemed to have accepted the terms and conditions of the PSUs set forth in the Plan and this Award Agreement and you must sign any future agreements related to this PSU Award as and when requested by the Company or this PSU Award will be forfeited without

 

1


  consideration. If you wish to decline this PSU Award, you should promptly notify the Company at its principal place of business, Attention: Stock Administration, or by electronic mail to benefits@fiscalnote.com. If you decline this PSU Award, the PSUs will be cancelled and no benefits from the PSUs nor any compensation or benefits in lieu of the PSUs will be provided to you.

IN WITNESS WHEREOF, the Company has caused this Notice to be executed by its duly authorized officer.

 

FISCALNOTE HOLDINGS, INC

 

Name
Title

[Participant Signature page follows on the reverse side of this Notice]

 

2


PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing PSU Award and agrees to the terms and conditions of the Award Agreement and the Plan. The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s internal SharePoint website.

 

PARTICIPANT

 

Signature

 

3


Exhibit A

Performance Vesting Terms

 

1


FiscalNote Holdings, Inc.

2022 Long-Term Incentive Plan

STANDARD TERMS AND CONDITIONS FOR

PERFORMANCE-BASED RESTRICTED STOCK UNITS (PSUs)

1. GRANT OF PERFORMANCE-BASED RESTRICTED STOCK UNITS

(a) A performance-based restricted stock unit (“PSU”) is a non-voting unit of measurement that is deemed solely for bookkeeping purposes to be equivalent to one outstanding Share. The PSUs are used solely as a device to determine the number of Shares to eventually be issued to Participant if such PSUs vest. The PSUs shall not be treated as property or as a trust fund of any kind.

2. SETTLEMENT

(a) The number of PSUs that Participant actually earns will be determined by the level of achievement of the performance goal(s) in accordance with Exhibit A to the Notice. As soon as administratively practical during calendar year [] (and within ninety (90) days) following the vesting date (“Vesting Date”), and subject to the Participant remaining in Continuous Service through the Vesting Date, the Company will deliver to Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its discretion) equal to the number of PSUs subject to the PSU Award that vest on the applicable Vesting Date, subject to the satisfaction of any applicable withholding obligations for Tax-Related Items (defined below)No fractional PSUs or rights for fractional Shares shall be created pursuant to this Agreement.

(b) The Company reserves the right to issue to Participant the cash equivalent of Shares, in part or in full satisfaction of the delivery of Shares, upon vesting of the PSUs, and to the extent applicable, references in this Award Agreement to Shares issuable in connection with the PSUs will include the potential issuance of its cash equivalent pursuant to such right.

3. DIVIDEND AND VOTING RIGHTS

Unless and until such time as Shares are issued in settlement of vested PSUs, Participant will have no ownership of the Shares allocated to the PSUs, and will have no rights to vote such Shares and no rights to dividends nor any payment, payment-in-kind or any equivalent with regard to any cash or other dividends that are declared and paid on Shares.

4. LIMITEDTRANSFERABILITY OF PSUs

Except as provided in this Agreement, the PSUs and any interest therein will not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order, and any permitted transferee shall be bound by all of the terms and conditions of the Plan and this Award Agreement. In accordance with procedures established by the Committee, the Participant may make gratuitous transfers of the PSUs to trusts or other entities for estate planning purpose where Family Members (defined below) have more than fifty percent of the beneficial or voting interests of such trusts or entities. “Family Member” means the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships, and any person sharing the Participant’s household (other than a tenant or employee). The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs, successors, and assigns of Participant.

 

2


5. TERMINATION

Unless otherwise set forth in Exhibit A to the Notice, the following default provisions shall apply. The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of his or her PSU Award (including whether Participant may still be considered to be providing services while on a leave of absence).

(a) Cause. In the event that Participant’s Continuous Service is terminated for Cause, as of the date of such termination all PSUs shall cease to vest and any outstanding PSUs and vested PSUs that have yet to settle (pursuant to Section 2 of these PSU Terms and Conditions) shall immediately be forfeited to the Company, and all rights of Participant to such PSUs will immediately terminate without payment of consideration by the Company.

(b) Other. Unless the Committee determines otherwise, in the event that Participant’s Continuous Service terminates for any reason other than for Cause, as of the date of such termination all PSUs shall cease to vest and (except for any vested PSUs that have yet to settle, pursuant to Section 2 of these PSU Terms and Conditions) shall immediately be forfeited to the Company and all rights of Participant to such PSUs will immediately terminate without payment of consideration by the Company.

6. TAXES

(a) Responsibility for Taxes. By accepting this PSU Award, Participant acknowledges that, regardless of any action taken by the Company or, if different, any Affiliate that employs Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant, including any employer liability for which the Participant is liable (the “Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSU Award, including, but not limited to, the grant, vesting, or settlement of the PSU Award, the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the PSU Award to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver the Shares, or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

(b) Withholding. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.

Withholding for Tax-Related Items will be made in accordance with Section 8 of the Plan and such rules and procedures as may be established by the Committee, and in compliance with the Trading Policy, if applicable. In the event the Company or the Employer withholds more than the Tax-Related Items using one of the methods described above, Participant may receive a refund of any over-withheld amount in cash but will have no entitlement to the Shares sold or withheld. If the withholding obligation is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of vested Shares underlying the PSUs, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items. No fractional Shares will be withheld or issued pursuant to the settlement of the PSUs and the Tax-Related Items thereunder.

7. CODE SECTION 409A

It is intended that the terms of the PSU Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Payments pursuant to this PSU Award are intended to constitute separate payments for purposes of Section 409A of the Code.

 

3


8. GOVERNING LAW AND VENUE

This Award Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of Delaware, or the federal courts for the United States for Delaware, and no other courts, where this grant is made and/or to be performed.

9. ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS

This Award Agreement, together with the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior discussions, agreements, commitments, or negotiations between the parties. Except as otherwise permitted by the Plan, no modification of, or amendment to, this Award Agreement, nor any waiver of any rights under this Award Agreement, will be effective unless in writing and signed by the parties to this Award Agreement (which may be electronic). The failure by either party to enforce any rights under this Award Agreement will not be construed as a waiver of any rights of such party.

10. SEVERABILITY

If one or more provisions of this Award Agreement are held to be unenforceable under Applicable Law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement, (b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.

11. CONSENT TO ELECTRONIC DELIVERY AND PARTICIPATION

By accepting this PSU Award, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, Plan prospectuses, and all other documents, communications, or information related to the PSU Award and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company’s internal SharePoint website or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail, or such other delivery determined at the Company’s discretion. Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to Stock Administration.

12. LANGUAGE

Participant acknowledges that Participant is proficient in the English language and, accordingly, understands the provisions of this Award Agreement and the Plan. If Participant has received this Award Agreement, or any other document related to the PSU Award and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

13. IMPOSITION OF OTHER REQUIREMENTS

The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the PSU Award, and on any cash payment delivered upon exercise of the PSU Award, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

4


14. INSIDER TRADING/MARKET ABUSE LAWS

Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including, but not limited to, the United States, which may affect Participant’s ability to accept, acquire, sell, or otherwise dispose of Shares, rights to Shares (e.g., PSUs), or rights linked to the value of Shares under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Trading Policy. Neither the Company nor any of its Subsidiaries or Affiliates will be responsible for such restrictions or liable for the failure on Participant’s part to know and abide by such restrictions. Participant should consult with his or her own personal legal advisers to ensure compliance with local laws.

15. NO EMPLOYMENT RIGHT

Nothing in the Plan, in the Award Agreement or any other instrument executed pursuant to the Plan shall confer upon Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason.

 

5

Exhibit 10.12

FiscalNote Holdings, Inc.

2022 Long-Term Incentive Plan

NOTICE OF RESTRICTED STOCK UNIT AWARD

FiscalNote Holdings, Inc. (“Company”) has awarded to you (“Participant”) restricted stock units (“RSUs”) covering the number of Shares set forth below (the “RSU Award”) under the FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan (the “Plan”). Your “Award Agreement” applicable to the RSUs consists of (a) this Notice of Restricted Stock Unit Award (this “Notice”), and (b) the attached Standard Terms and Conditions for Restricted Stock Units (RSUs) (the “RSU Terms and Conditions”). Capitalized terms used but not defined in this Award Agreement will have the same meanings specified in the Plan.

 

Name of Participant:   

 

Grant Date:   

 

Grant ID:   

 

Number of RSUs:   

 

Country at Grant:    United States
Vesting Commencement Date:   

 

Vesting Schedule:    .

By accepting (whether electronically or otherwise) the RSU Award, you acknowledge and agree to the following:

 

1.

The RSU Award is governed by the terms and conditions of this Award Agreement and the Plan. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.

 

2.

You have received a copy of the Plan, this Award Agreement, the Plan prospectus, and the FiscalNote Holdings, Inc.Insider Trading Policy (“Trading Policy”), and represent that you have read these documents and are familiar with their terms. You further agree to accept as binding, conclusive, and final all decisions and interpretations of the Committee regarding any questions relating to the RSU Award and the Plan.

 

3.

Vesting of the RSUs is subject to your Continuous Service as an Employee, Director, or Consultant, which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement or the Plan changes the nature of that relationship.

 

4.

The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. You should consult with your own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.

 

5.

If you do not accept or decline this RSU Award within 90 days of the Grant Date or by such other date that may be communicated to you by the Company, the Company will accept this RSU Award on your behalf and you will be deemed to have accepted the terms and conditions of the RSUs set forth in the Plan and this Award Agreement and you must sign any future agreements related to this RSU Award as and when requested by the Company or this RSU Award will be forfeited without consideration. If you wish to decline this RSU Award, you should promptly notify the Company at its principal place of business, Attention: Stock Administration, or by electronic mail benefits@fiscalnote.com. If you decline this RSU Award, the RSUs will be cancelled and no benefits from the RSUs nor any compensation or benefits in lieu of the RSUs will be provided to you.

 

1


IN WITNESS WHEREOF, the Company has caused this Notice to be executed by its duly authorized officer.

 

FISCALNOTE HOLDINGS, INC.

 

Name
Title

[Participant Signature page follows on the reverse side of this Notice]

 

2


PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing RSU Award and agrees to the terms and conditions of the Award Agreement and the Plan. The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s internal SharePoint website.

 

PARTICIPANT

 

Signature

 

3


FiscalNote Holdings, Inc.

2022 Long-Term Incentive Plan

STANDARD TERMS AND CONDITIONS FOR

RESTRICTED STOCK UNITS (RSUs)

 

1.

GRANT OF RESTRICTED STOCK UNITS

A restricted stock unit (“RSU”) is a non-voting unit of measurement that is deemed solely for bookkeeping purposes to be equivalent to one outstanding Share. The RSUs are used solely as a device to determine the number of Shares to eventually be issued to Participant if such RSUs vest. The RSUs shall not be treated as property or as a trust fund of any kind.

 

2.

SETTLEMENT

(a) On or as soon as administratively practical (and within thirty (30) days) following the applicable date of vesting under the Vesting Schedule set forth in the Notice (a “Vesting Date”), and subject to the Participant remaining in Continuous Service through the applicable Vesting Date, the Company will deliver to Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its discretion) equal to the number of RSUs subject to the RSU Award that vest on the applicable Vesting Date, subject to the satisfaction of any applicable withholding obligations for Tax-Related Items (defined below). No fractional RSUs or rights for fractional Shares shall be created pursuant to this Agreement.

(b) The Company reserves the right to issue to Participant the cash equivalent of Shares, in part or in full satisfaction of the delivery of Shares, upon vesting of the RSUs, and to the extent applicable, references in this Award Agreement to Shares issuable in connection with the RSUs will include the potential issuance of its cash equivalent pursuant to such right.

 

3.

DIVIDEND AND VOTING RIGHTS

Unless and until such time as Shares are issued in settlement of vested RSUs, Participant will have no ownership of the Shares allocated to the RSUs, and will have no rights to vote such Shares and no rights to dividends nor any payment, payment-in-kind or any equivalent with regard to any cash or other dividends that are declared and paid on Shares.

 

4.

LIMITED TRANSFERABILITY OF RSUs

Except as provided in this Agreement, the RSUs and any interest therein may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order, and any permitted transferee shall be bound by all of the terms and conditions of the Plan and this Award Agreement. In accordance with procedures established by the Committee, the Participant may make gratuitous transfers of the RSUs to trusts or other entities for estate planning purpose where Family Members (defined below) have more than fifty percent of the beneficial or voting interests of such trusts or entities. “Family Member” means the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships, and any person sharing the Participant’s household (other than a tenant or employee). The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs, successors, and assigns of Participant.    

 

5.

TERMINATION

The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of his or her RSU Award (including whether Participant may still be considered to be providing services while on a leave of absence).

 

4


(a) Cause. In the event that Participant’s Continuous Service is terminated for Cause, as of the date of such termination all RSUs shall cease to vest and any outstanding RSUs and vested RSUs that have yet to settle (pursuant to Section 2 of these RSU Terms and Conditions) shall immediately be forfeited to the Company, and all rights of Participant to such RSUs will immediately terminate without payment of consideration by the Company.

(b) Other. Unless the Committee determines otherwise, in the event that Participant’s Continuous Service terminates for any reason other than for Cause, as of the date of such termination all RSUs shall cease to vest and (except for any vested RSUs that have yet to settle, pursuant to Section 2 of these RSU Terms and Conditions) shall immediately be forfeited to the Company and all rights of Participant to such RSUs will immediately terminate without payment of consideration by the Company.

 

6.

TAXES

(a) Responsibility for Taxes. By accepting this RSU Award, Participant acknowledges that, regardless of any action taken by the Company or, if different, any Affiliate that employs Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant, including any employer liability for which the Participant is liable (the “Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSU Award, including, but not limited to, the grant, vesting, or settlement of the RSU Award, the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSU Award to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver the Shares, or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

(b) Withholding. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.

Withholding for Tax-Related Items will be made in accordance with Section 8 of the Plan and such rules and procedures as may be established by the Committee, and in compliance with the Trading Policy, if applicable. In the event the Company or the Employer withholds more than the Tax-Related Items using one of the methods described above, Participant may receive a refund of any over-withheld amount in cash but will have no entitlement to the Shares sold or withheld. If the withholding obligation is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of vested Shares underlying the RSUs, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items. No fractional Shares will be withheld or issued pursuant to the settlement of the RSUs and the Tax-Related Items thereunder.

 

7.

CODE SECTION 409A

It is intended that the terms of the RSU Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Payments pursuant to this RSU Award are intended to constitute separate payments for purposes of Section 409A of the Code.

 

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8.

GOVERNING LAW AND VENUE

This Award Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of Delaware, or the federal courts for the United States for Delaware, and no other courts, where this grant is made and/or to be performed.

 

9.

ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS

This Award Agreement, together with the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior discussions, agreements, commitments, or negotiations between the parties. Except as otherwise permitted by the Plan, no modification of, or amendment to, this Award Agreement, nor any waiver of any rights under this Award Agreement, will be effective unless in writing and signed by the parties to this Award Agreement (which may be electronic). The failure by either party to enforce any rights under this Award Agreement will not be construed as a waiver of any rights of such party.

 

10.

SEVERABILITY

If one or more provisions of this Award Agreement are held to be unenforceable under Applicable Law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement, (b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.

 

11.

CONSENT TO ELECTRONIC DELIVERY AND PARTICIPATION

By accepting this RSU Award, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, Plan prospectuses, and all other documents, communications, or information related to the RSU Award and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company’s internal SharePoint website or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail, or such other delivery determined at the Company’s discretion. Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to Stock Administration.

 

12.

LANGUAGE

Participant acknowledges that Participant is proficient in the English language and, accordingly, understands the provisions of this Award Agreement and the Plan. If Participant has received this Award Agreement, or any other document related to the RSU Award and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

 

13.

IMPOSITION OF OTHER REQUIREMENTS

The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the RSU Award, and on any cash payment delivered upon exercise of the RSU Award, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional agreements or undertakings that may be necessary to accomplish the foregoing.

 

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14.

INSIDER TRADING/MARKET ABUSE LAWS

Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including, but not limited to, the United States, which may affect Participant’s ability to accept, acquire, sell, or otherwise dispose of Shares, rights to Shares (e.g., RSUs), or rights linked to the value of Shares under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Trading Policy. Neither the Company nor any of its Subsidiaries, or Affiliates will be responsible for such restrictions or liable for the failure on Participant’s part to know and abide by such restrictions. Participant should consult with his or her own personal legal advisers to ensure compliance with local laws.

 

15.

NO EMPLOYMENT RIGHT

Nothing in the Plan, in the Award Agreement or any other instrument executed pursuant to the Plan shall confer upon Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason.

 

7

Exhibit 10.13

FiscalNote Holdings, Inc.

2022 Long-Term Incentive Plan

NOTICE OF STOCK OPTION AWARD

FiscalNote Holdings, Inc. (“Company”) has awarded to you (“Participant”) an option to purchase the number of shares of Common Stock set forth below (the “Option”) under the FiscalNote Holdings, Inc. 2022 Long-Term Incentive Plan (the “Plan”). Your “Award Agreement” applicable to the Option consists of (a) this Notice of Stock Option Award (this “Notice”), and (b) the attached Standard Terms and Conditions for Stock Options (the “Option Terms and Conditions”). Capitalized terms used but not defined in this Award Agreement will have the same meanings specified in the Plan.

 

Name of Participant:

  

 

  

Grant Date:

  

 

  

Grant ID:

  

 

  

Number of Shares

Subject to Option:

  

 

  
Exercise Price (Per Share):      

Expiration Date:

     

Type of Grant:

     

Country at Grant:

     

Vesting Commencement

Date:

  

 

  

Vesting Schedule:

   .   

By accepting (whether electronically or otherwise) the Option, you acknowledge and agree to the following:

 

1.

The Option is governed by the terms and conditions of this Award Agreement and the Plan. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.

 

2.

You have received a copy of the Plan, this Award Agreement, the Plan prospectus, and the FiscalNote Holdings, Inc. InsiderTrading Policy (“Trading Policy”), and represent that you have read these documents and are familiar with their terms. You further agree to accept as binding, conclusive, and final all decisions and interpretations of the Committee regarding any questions relating to the Option and the Plan.

 

3.

Vesting of the Option is subject to your Continuous Service as an Employee, Director, or Consultant, which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement or the Plan changes the nature of that relationship.

 

4.

If the Option is an incentive stock option (“ISO”), it (plus other outstanding ISOs granted to you) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a nonqualified stock option (“Non-ISO”).

 

5.

The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. You should consult with your own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.

 

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6.

If you do not accept or decline this Option within 90 days of the Grant Date or by such other date that may be communicated to you by the Company, the Company will accept this Option on your behalf and you will be deemed to have accepted the terms and conditions of the Option set forth in the Plan and this Award Agreement and you must sign any future agreements related to this Option as and when requested by the Company or this Option will be forfeited without consideration. If you wish to decline this Option, you should promptly notify the Company at its principal place of business, Attention: Stock Administration, or by electronic mail to benefits@fiscalnote.com. If you decline this Option, the Option will be cancelled and no benefits from the Option nor any compensation or benefits in lieu of the Option will be provided to you.

IN WITNESS WHEREOF, the Company has caused this Notice to be executed by its duly authorized officer.

 

FISCALNOTE HOLDINGS, INC.

 

Name
Title

[Participant Signature page follows on the reverse side of this Notice]

 

2


PARTICIPANT’S ACCEPTANCE

The undersigned hereby accepts the foregoing Option and agrees to the terms and conditions of the Award Agreement and the Plan. The undersigned hereby acknowledges receipt of the attached Standard Terms and Conditions and that a copy of the Plan is available on the Company’s internal SharePoint website.

 

PARTICIPANT

 

Signature

 

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FiscalNote Holdings, Inc.

2022 Long-Term Incentive Plan

STANDARD TERMS AND CONDITIONS FOR

STOCK OPTIONS

1. EXERCISE.

(a) The Participant may generally exercise the vested portion of his or her Option for whole shares of Common Stock at any time during its term by delivery of payment of the exercise price and applicable withholding taxes and other required documentation to the Company in accordance with the exercise procedures established by the Committee, which may include an electronic submission. Please review the Plan, which may restrict or prohibit he Participant’s ability to exercise the Option during certain periods.

(b) To the extent permitted by Applicable Law, Participant may pay the Option exercise price as follows:

(i) cash or check payable to the Company (in U.S. dollars);

(ii) subject to Company and/or Committee consent at the time of exercise, pursuant to a “cashless exercise” program as further described in the Plan, if at the time of exercise the Common Stock is publicly traded;

(iii) subject to Company and/or Committee consent at the time of exercise, pursuant to a “net exercise” program whereby shares of Common Stock subject to the Option being exercised and having a Fair Market Value equal to the exercise price are withheld from issuance; or

(iv) subject to Company and/or Committee consent at the time of exercise, by delivery of previously owned shares of Common Stock (which may be done through attestation) , which have a Fair Market Value equal to the exercise price and have been owned by the Participant for at least six months.

2. TERM. Participant may not exercise the Option before the commencement of its term or after its term expires. The term of the Option commences on the Date of Grant and expires upon the earliest of the following:

(a) immediately upon the termination of Participant’s Continuous Service for Cause;

(b) 90 days after the termination of Participant’s Continuous Service for any reason other than Cause, Participant becomes Disabled or dies;

(c) 12 months after the termination of your Continuous Service if Participant becomes Disabled;

(d) 12 months after Participant’s death if Participant dies during Continuous Service;

(e) immediately upon a Change in Control if the Board has determined that the Option will terminate in connection with a Change in Control;

(f) the Expiration Date indicated in the Grant Notice; or

(g) the day before the 10th anniversary of the Date of Grant.

To obtain the federal income tax advantages associated with an ISO, the Code requires that at all times beginning on the date of grant of the Option, and ending on the day three months before the date of the Option’s exercise, Participant must be an employee of the Company or an Affiliate, except in the event of Participant’s death or if Participant becomes Disabled.

 

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3. DIVIDEND AND VOTING RIGHTS

Unless and until such time as Shares are issued in settlement of an exercised Option, Participant will have no ownership of the Shares allocated to the Option, and will have no rights to vote such Shares and no rights to dividends nor any payment, payment-in-kind or any equivalent with regard to any cash or other dividends that are declared and paid on Shares.

4. LIMITED TRANSFERABILITY OF OPTION

The Option and any interest therein will not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order, and any permitted transferee shall be bound by all of the terms and conditions of the Plan and this Award Agreement. Notwithstanding the foregoing, if this Option is a Non-Qualified Stock Option, then in accordance with procedures established by the Committee, the Participant may make gratuitous transfers of the Option to trusts or other entities for estate planning purpose where Family Members (defined below) have more than fifty percent of the beneficial or voting interests of such trusts or entities. “Family Member” means the Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, including adoptive relationships, and any person sharing the Participant’s household (other than a tenant or employee). Lifetime transfers are not permitted for Incentive Stock Options. The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs, successors, and assigns of Participant.

5. TERMINATION

The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of his or her Option (including whether Participant may still be considered to be providing services while on a leave of absence).

(a) Cause. In the event that Participant’s Continuous Service is terminated for Cause, as of the date of such termination the entire Option (whether or not vested) shall immediately be forfeited to the Company, and all rights of Participant to such Option will immediately terminate without payment of consideration by the Company.

(b) Other. Unless the Committee determines otherwise, in the event that Participant’s Continuous Service terminates for any reason other than for Cause, as of the date of such termination the Option shall cease to vest and the portion of the Option that is unvested shall immediately be forfeited to the Company and all rights of Participant to such portion of the Option that is unvested will immediately terminate without payment of consideration by the Company.

6. TAXES

(a) Responsibility for Taxes. By accepting this Option, Participant acknowledges that, regardless of any action taken by the Company or, if different, any Affiliate that employs Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax or other tax-related items related to the Participant’s participation in the Plan and legally applicable to the Participant, including any employer liability for which the Participant is liable (the “Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting, or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise, and the receipt of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver the Shares, or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

 

5


(b) Withholding. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.

Withholding for Tax-Related Items will be made in accordance with Section 8 of the Plan and such rules and procedures as may be established by the Committee, and in compliance with the Trading Policy, if applicable. In the event the Company or the Employer withholds more than the Tax-Related Items using one of the methods described above, Participant may receive a refund of any over-withheld amount in cash but will have no entitlement to the Shares sold or withheld. If the withholding obligation is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of vested Shares underlying the Option, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items. No fractional Shares will be withheld or issued pursuant to the exercise of the Option and the Tax-Related Items thereunder.

(c) If the Participant’s Option is an ISO, the Participant must notify the Company in writing within fifteen (15) days after the date of any disposition of the any shares of Common Stock issued upon exercise of the Option within two years after the Grant Date or one year after exercise of the Option.

7. CODE SECTION 409A

It is intended that the terms of the Option will not result in the imposition of any tax liability pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Payments pursuant to this Option are intended to constitute separate payments for purposes of Section 409A of the Code.

8. GOVERNING LAW AND VENUE

This Award Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of Delaware, or the federal courts for the United States for Delaware, and no other courts, where this grant is made and/or to be performed.

9. ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS

This Award Agreement, together with the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior discussions, agreements, commitments, or negotiations between the parties. Except as otherwise permitted by the Plan, no modification of, or amendment to, this Award Agreement, nor any waiver of any rights under this Award Agreement, will be effective unless in writing and signed by the parties to this Award Agreement (which may be electronic). The failure by either party to enforce any rights under this Award Agreement will not be construed as a waiver of any rights of such party.

10. SEVERABILITY

If one or more provisions of this Award Agreement are held to be unenforceable under Applicable Law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement, (b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.

 

6


11. CONSENT TO ELECTRONIC DELIVERY AND PARTICIPATION

By accepting this Option, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, Plan prospectuses, and all other documents, communications, or information related to the Option and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company’s internal SharePoint website or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail, or such other delivery determined at the Company’s discretion. Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to Stock Administration.

12. LANGUAGE

Participant acknowledges that Participant is proficient in the English language and, accordingly, understands the provisions of this Award Agreement and the Plan. If Participant has received this Award Agreement, or any other document related to the Option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

13. IMPOSITION OF OTHER REQUIREMENTS

The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Option, and on any cash payment delivered upon exercise of the Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional agreements or undertakings that may be necessary to accomplish the foregoing.

14. INSIDER TRADING/MARKET ABUSE LAWS

Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including, but not limited to, the United States, which may affect Participant’s ability to accept, acquire, sell, or otherwise dispose of Shares, rights to Shares (e.g., Option), or rights linked to the value of Shares under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in the applicable jurisdictions). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Trading Policy. Neither the Company nor any of its Subsidiaries, or Affiliates will be responsible for such restrictions or liable for the failure on Participant’s part to know and abide by such restrictions. Participant should consult with his or her own personal legal advisers to ensure compliance with local laws.

15. NO EMPLOYMENT RIGHT

Nothing in the Plan, in the Award Agreement or any other instrument executed pursuant to the Plan shall confer upon Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate Participant’s Continuous Service at any time for any reason.

 

7

Exhibit 21.1

FiscalNote Holdings, Inc. Subsidiaries

 

Subsidiaries    Jurisdiction of Organization
VoterVoice, L.L.C.    Louisiana
FiscalNote Intermediate Holdco, Inc.    Delaware
CQ-Roll Call, Inc.    Delaware
Capitol Advantage LLC    Virginia
FiscalNote Holdings II, Inc.    Delaware
FiscalNote, Inc.    Delaware
Sandhill Strategy, LLC    District of Columbia
FactSquared, LLC    Delaware
Fireside 21, LLC    Delaware
The Oxford Analytica International Group, LLC    Delaware
Oxford Analytica Inc.    New York
Oxford Analytica Europe SAS    France
Oxford Analytica Ltd.    United Kingdom
TimeBase Pty. Ltd.    Australia
FiscalNote Europe Ltd.    Ireland
Shungham Information SPRL    Belgium
DataHunt, Co., Ltd.    South Korea
FiscalNote India Private Limited    India
FiscalNote Asia Limited    Hong Kong
FiscalNote Boards LLC    Texas
Predata, Inc.    Delaware
Equilibrium World Pte., Ltd.    Singapore
The Orange Polar Bear Co. Ltd.    Taiwan
Curate Solutions, Inc.    Delaware
Forge.AI, Inc.    Delaware
Frontier Strategy Group LLC    Delaware
Frontier Strategy UK Limited    United Kingdom
Frontier Strategy Group Asia Pacific Pte. Ltd.    Singapore
Aicel Technologies, Inc.    South Korea

Duddell Street Acquisition Corp. and FiscalNote

Complete Business Combination

FiscalNote to Begin Trading on the New York Stock Exchange on Monday, August 1, 2022

Under the Ticker Symbol “NOTE”

Long-Term Growth Plan Funded by $425 Million in Capital

Co-Founder, Chairman & CEO Tim Hwang Will Join Senior Leadership and Company

Employees at the New York Stock Exchange to Ring Opening Bell

on Thursday, August 4, 2022

HONG KONG and WASHINGTON, D.C. – Friday, July 29, 2022—Duddell Street Acquisition Corp. (Nasdaq: DSAC) (“Duddell Street”), a publicly-traded special purpose acquisition company, today announced the completion of its business combination (the “Business Combination”) with FiscalNote Holdings, Inc. (“FiscalNote”), a leading AI-driven enterprise SaaS company that delivers legal and regulatory data and insights.

In connection with the completion of the Business Combination, FiscalNote’s Class A common stock and warrants are expected to commence trading on the New York Stock Exchange on Monday, August 1, 2022 under the ticker symbols “NOTE” and “NOTE WS,” respectively. Subsequently, FiscalNote’s Co-Founder, Chairman and CEO, Tim Hwang, will ring the NYSE Opening Bell at 9:30 a.m. ET, Thursday, August 4, 2022 alongside senior leaders and employees of the company in a celebration of FiscalNote’s public trading debut. A live feed of the Bell Opening can be found at www.nyse.com/bell.

“We are excited to enter the public markets following the successful conclusion of this transaction. A new chapter for FiscalNote is about to begin, and we could not be more enthusiastic about what’s to come,” said Tim Hwang, Co-Founder, Chairman and CEO of FiscalNote. “Becoming a public company will enhance and accelerate our growth strategy which super-serves our global customers with excellence through our world-class suite of results-oriented solutions. We remain focused on strengthening our ability to execute on near-and long-term organic and inorganic growth opportunities—with a special emphasis on the rapidly-expanding market of regulated industries of the future. Our success will be guided by mission, purpose, and continued innovation, while the essential nature of what FiscalNote offers will remain steadfastly durable and essential in a world where change and uncertainty are the only constant. We are more committed than ever to providing lasting value to our customers, our partners, and our shareholders.”

“We are pleased to complete our Business Combination with FiscalNote, and we are very excited about FiscalNote’s future as both a market leader and category creator,” said Manoj Jain, CEO of Duddell Street, and Co-Chief Investment Officer of Maso Capital. “FiscalNote’s exceptional track record of organic and inorganic growth—powered by its product innovation and strategic M&A plan—will enable the company to further disrupt and revolutionize the marketplace with its strategy of turning data and advisory-driven insights into action. There was no question of FiscalNote’s essential value to companies and organizations


around the world when we first announced our agreement in November last year. Now, in a climate of increasing geopolitical uncertainty and market volatility, its mission and purpose are needed more than ever, and continues to deliver tremendous value and positive results for thousands of global customers. We are confident that the company’s strong business fundamentals and go-forward strategy provide excellent prospects for continued growth. We look forward to partnering with FiscalNote and its experienced management team as they officially enter the public markets.”

Advisors

J.P. Morgan acted as financial advisor to FiscalNote. Citi, BTIG, LLC, Chardan, Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, D.A. Davidson & Co., EF Hutton, division of Benchmark Investments, LLC, and Northland Securities, Inc., acted as capital markets advisors to Duddell Street. Davis Polk & Wardwell LLP served as legal advisor to Duddell Street, and Paul Hastings LLP served as legal advisor to FiscalNote. Shearman & Sterling LLP served as legal advisor to Citi and J.P. Morgan.

Note: “Long-Term Growth Plan Funded by $425 Million in Capital”: consists of $175 million in proceeds from the business combination and a 5-year senior secured term loan of up to $250 million, including $150 million of committed financing at closing with an additional accordion facility for $100 million, subject to certain conditions.

About FiscalNote

FiscalNote is a leading technology provider of global policy and market intelligence. By uniquely combining AI technology, actionable data, and expert and peer insights, FiscalNote empowers customers to manage policy, address regulatory developments, and mitigate global risk. Since 2013, FiscalNote has pioneered technology that delivers mission-critical insights and the tools to turn them into action. Home to CQ, Equilibrium, FrontierView, Oxford Analytica, VoterVoice, and many other industry-leading brands, FiscalNote serves more than 5,000 customers worldwide with global offices in North America, Europe, Asia, and Australia. To learn more about FiscalNote and its family of brands, visit FiscalNote.com and follow @FiscalNote.

About Duddell Street Acquisition Corp.

Duddell Street Acquisition Corp. was formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses. Duddell Street is sponsored by Hong Kong-based hedge fund Maso Capital. Since inception, Maso Capital has invested in more than one thousand companies and situations across multiple sectors and geographies. Leveraging its stature and reputation in Hong Kong and its experienced investment team, Maso Capital has had investments in a number of TMT, healthcare, fintech and consumer companies in the region. For more information, please visit DSAC.co.

Additional Information and Where to Find It In connection with the Business Combination, Duddell Street has filed relevant materials with the SEC, including a registration statement on Form S-4, which includes a proxy statement/prospectus of Duddell Street, which was declared effective by the SEC on July 1, 2022, and will file other documents regarding the Business Combination with the SEC. Duddell Street’s shareholders and other interested persons are advised to read the definitive proxy statement and documents incorporated by reference therein filed in connection with the Business Combination, as these materials contain important information about FiscalNote, Duddell Street and the Business Combination. The documents filed by Duddell Street with the SEC may be obtained free of charge at the SEC’s website at www.sec.gov.


No Offer or Solicitation

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Caution Concerning Forward-Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about future financial and operating results, plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will,” “are expected to,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “pro forma,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding FiscalNote’s industry and market sizes, future opportunities for FiscalNote and Duddell Street, FiscalNote’s estimated future results and the proposed business combination between Duddell Street and FiscalNote, including pro forma market capitalization, pro forma revenue, the expected transaction and ownership structure and the likelihood, timing and ability of the parties to successfully consummate the proposed transaction. Such forward-looking statements are based upon the current beliefs and expectations of Duddell Street’s and FiscalNote’s managements and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond Duddell Street’s or FiscalNote’s control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements. Except as required by law, Duddell Street and FiscalNote do not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Contacts:

Media

Nicholas Graham

FiscalNote

press@fiscalnote.com

Investors

ICR, Inc. for FiscalNote

Sean Hannan

IR@fiscalnote.com

Duddell Street Acquisition Corp.

Sam Joshi

IR@masocapital.com

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K and, if not defined in the Form 8-K, the Registration Statement on Form S-4 (File No. 333-261483) (the “Registration Statement”). Unless the context otherwise requires, the “Company” or “New FiscalNote” refers to FiscalNote Holdings, Inc. after the Closing, “DSAC” refers to Duddell Street Acquisition Corp. prior to the Closing, and “FiscalNote” refers to FiscalNote Holdings, Inc. prior to the Closing.

The following unaudited pro forma condensed combined balance sheet as of March 31, 2022 and the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2022 and the year ended December 31, 2021 present the combination of the financial information of DSAC and FiscalNote after giving effect to the Business Combination, Debt Financing and related adjustments described in the accompanying notes. DSAC and FiscalNote are collectively referred to herein as the “Companies,” and the Companies, subsequent to the Business Combination and the Debt Financing, are referred to herein as “New FiscalNote.”

The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2022 and the year ended December 31, 2021 gives pro forma effect to the Business Combination and Debt Financing as if they had occurred on January 1, 2021. The unaudited pro forma condensed combined balance sheet as of March 31, 2022 gives pro forma effect to the Business Combination and Debt Financing as if they were completed on March 31, 2022.

The unaudited pro forma condensed combined financial information is based on, and should be read in conjunction with, the audited historical financial statements of each of DSAC and FiscalNote and the notes thereto, as well as the disclosures contained in the sections titled “DSAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “FiscalNote’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained elsewhere in the proxy statement/ prospectus.

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily reflect what New FiscalNote’s financial condition or results of operations would have been had the Business Combination and Debt Financing occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of New FiscalNote. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of this proxy statement/prospectus and are subject to change as additional information becomes available and analyses are performed.

The following describes the above entities:

FiscalNote

FiscalNote is a technology and data company delivering critical legal data and insights in a rapidly evolving economic, political and regulatory world. By combining AI, machine learning and other technologies with analytics, workflow tools, and expert research, FiscalNote seeks to reinvent the way that organizations minimize risks and capitalize on opportunities associated with rapidly changing legal and policy environments. Through a number of our products, FiscalNote ingests unstructured legislative and regulatory data, and employs AI and data science to deliver structured, relevant and actionable information that facilitates key operational and strategic decisions by global enterprises, midsized and smaller businesses, government institutions, trade groups, and nonprofits. FiscalNote delivers that intelligence through its suite of public policy and issues management products, coupled with expert research and analysis of markets and geopolitical events, as well as powerful tools to manage workflows, advocacy campaigns and constituent relationships.

Duddell

Duddell Street Acquisition Corp. (“DSAC”) is a blank check company incorporated as a Cayman Islands exempted company on August 28, 2020. DSAC was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.

 

1


As of March 31, 2022, DSAC had not yet commenced operations. All activity for the period from August 28, 2020 (inception) through March 31, 2022 relates to DSAC’s formation and the initial public offering (the “Initial Public Offering”) and its search for an initial business combination, which is described below.

 

2


Description of the Business Combination

On November 7, 2021, DSAC entered into the Business Combination Agreement with FiscalNote. Pursuant to the Business Combination Agreement, DSAC changed its jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and redomesticating as a company under the laws of the State of Delaware. Immediately prior to the Closing, each share of FiscalNote preferred stock outstanding immediately prior to Recapitalization was converted into, exchanged for or otherwise replaced with a number of shares of FiscalNote Class A common stock equal to the number of shares of FiscalNote common stock into which such shares of FiscalNote Preferred Stock would have been convertible immediately prior to the Recapitalization. Further, all of the FiscalNote Convertible Notes outstanding and unexercised immediately prior to the Effective Time were assumed by DSAC and were converted into a convertible note issued by New FiscalNote, with a right of conversion into shares of New FiscalNote Class A common stock. On the Closing Date, (i) DSAC acquired all of the issued and outstanding shares of FiscalNote common stock by effecting a merger of a wholly owned subsidiary with and into FiscalNote; (ii) the shareholders of FiscalNote received, in exchange for each share of FiscalNote common stock, an aggregate of (a) 96.0 million shares of New FiscalNote common stock and (b) 17.3 million FiscalNote Earnout Shares dependent upon the occurrence of the Triggering Events based upon the trading price of New FiscalNote Common Stock after the Closing Date; (iii) the holders of unexercised FiscalNote options received (a) 10.4 million options to acquire New FiscalNote common stock and (b) 1.0 million FiscalNote Earnout RSUs for Unvested FiscalNote Options and 0.9 million Earnout Shares for Vested FiscalNote Options, which will be subject to forfeiture and settle upon the occurrence of the Triggering Events based upon the trading price of New FiscalNote common stock (such FiscalNote Earnout RSUs to be subject to the same vesting criteria as the underlying options); and (iv) Merger Sub merged with and into FiscalNote, whereupon the separate existence of Merger Sub ceased, with FiscalNote as the surviving corporation and a wholly owned subsidiary of DSAC.

Pursuant to the terms of the Business Combination Agreement, DSAC acquired all of the equity interests from FiscalNote for $1.0 billion plus the aggregate exercise price payable with respect to each Vested FiscalNote Option and each FiscalNote Warrant totaling $11.2 million. Consideration consisted of 86.5 million shares of New FiscalNote Class A common stock, 8.3 million shares of New FiscalNote Class B common stock and 4.8 million shares reserved for Vested FiscalNote Options and Unvested FiscalNote Options. Each share of New FiscalNote Class A common stock will carry one vote per share while each share of New FiscalNote Class B common stock issued to FiscalNote Co-Founders Timothy Hwang and Gerald Yao will carry twenty-five (25) votes per share, giving them approximately 63.1% of the outstanding voting power of New FiscalNote. The New FiscalNote Class A common stock and New FiscalNote Class B common stock have identical economic rights to earnings.

Concurrent with the Closing, FiscalNote, Inc. (the “Borrower Representative”), a wholly owned indirect subsidiary of FiscalNote, entered into a new senior term loan facility with Runway Growth Finance Corp., ORIX Growth Capital, LLC, Clover Orochi LLC and ACM ASOF VIII SaaS FinCo LLC (together, the “New Senior Lenders”), pursuant to which the New Senior Lenders provided a senior secured term loan facility consisting of a fully funded principal amount of $150.0 million (including the First Out Term Loans under FiscalNote, Inc.’s then-existing senior credit facility, which were refinanced under the new facility on amended terms) (the “New Senior Term Loan”) and an uncommitted incremental loan facility totaling $100.0 million available upon notice by the Borrower Representative if the Borrower Representative meets certain financial growth criteria and other customary requirements (the “New Incremental Term Facility”) (collectively the “New Senior Credit Facility”). The annual interest of the New Senior Term Loan consists of two components: a cash interest component of (a) the greater of (i) Prime Rate plus 5.0% per annum and (ii) 9.0% payable monthly in cash, and (b) interest payable in kind component of 1.00% per annum, payable in kind monthly. The New Senior Credit Facility will mature on July 29, 2027, the five-year anniversary of the Closing Date.

 

3


The historical financial information of DSAC and FiscalNote have been adjusted in the unaudited pro forma condensed combined financial information to give effect to events that are (1) directly attributable to the Business Combination and the New Senior Credit Facility and (2) factually supportable. The pro forma adjustments are prepared to illustrate the estimated effect of the Business Combination, the New Senior Credit Facility and certain other transaction adjustments such as the uses of proceeds.

The Business Combination will be accounted for as a reverse recapitalization in accordance with US GAAP because FiscalNote has been determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The determination is primarily based on the evaluation of the following facts:

 

   

the pre-combination equity holders of FiscalNote hold the majority of voting rights in New FiscalNote;

 

   

the pre-combination equity holders of FiscalNote have the right to appoint the majority of the directors on the New FiscalNote Board;

 

   

FiscalNote management continuing to hold executive management roles for the post-combination company and being responsible for the day-to-day operations of New FiscalNote;

 

   

the post-combination company assuming the FiscalNote name;

 

   

New FiscalNote maintaining the pre-existing FiscalNote headquarters; and

 

   

the operations of FiscalNote comprising the ongoing operations of New FiscalNote.

Under the reverse recapitalization model, for accounting purposes the Business Combination will be treated as FiscalNote issuing equity for the net assets of DSAC, accompanied by a recapitalization with no goodwill or intangible assets recorded and the financial statements of New FiscalNote will represent a continuation of the financial statements of FiscalNote.

Prior to the consummation of the Business Combination, DSAC’s shareholders could elect to redeem their shares even if they approved the Business Combination. While the DSAC shareholders had the right to redeem their shares for cash, DSAC entered into an agreement to backstop up to $175.0 million in proceeds from the sale of up to 17.5 million shares of New DSAC Class A common stock at a price per share equal to $10.00 immediately prior to (and contingent upon) the Closing (the “Backstop Agreement”). The following summarizes the pro forma New FiscalNote common stock outstanding after considering redemptions of DSAC shareholders and the effect of the purchases pursuant to the Backstop Agreement:

 

    

Share ownership in the Post-

Combination Company

    Voting power in the Post-
Combination Company
 
     Shares      %     Vote      %  

DSAC Shareholders

          

Public shares owned by public shareholders

     2,091,686        1.6     2,091,686        0.6

Bonus Shares owned by public shareholders

     1,195,249        0.9     1,195,249        0.4

Public shares owned by the Sponsor

     15,408,314        11.9     15,408,314        4.7

Bonus Shares owned by the Sponsor

     8,804,751        6.8     8,804,751        2.7

Initial shares

     4,375,000        3.4     4,375,000        1.3

Other shares held by Sponsor(1)

     375,665        0.3     375,665        0.1

FiscalNote Stockholders

          

Class A Shares(2) (3)

     89,198,738        68.8     89,198,738        27.1

Class B Shares

     8,290,921        6.4     207,237,025        63.1
  

 

 

    

 

 

   

 

 

    

 

 

 

Total

     129,740,324        100     328,722,428        100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Funds affiliated with the Sponsor hold a convertible note in FiscalNote that converted into 316,482 shares of FiscalNote Class A common stock immediately prior to the Closing and further converted into 375,665 shares of New FiscalNote Class A common stock in connection with the Closing.

(2)

Amount (i) includes 2,700,000 FiscalNote Class A common stock issued to the holders of the FrontierView Convertible Notes that converted into New FiscalNote Class A common stock immediately subsequent to the Closing and which were not subject to the BCA Exchange Ratio and (ii) excludes (a) 9,636,145 of New FiscalNote Warrants and New FiscalNote Options outstanding as of the Closing Date, (b) 930,731 New FiscalNote restricted shares issued to certain sellers and subject to certain performance conditions, (c) 18,170,145 Earnout Shares, and (d) 1,023,973 Earnout RSUs. Below is a summary of the shares of FiscalNote common stock outstanding immediately prior to Closing and the number of shares of New FiscalNote common stock exchanged at Closing:

 

4


     Shares of
FiscalNote
     Exchange
Ratio
     Shares of New
FiscalNote*
 

FiscalNote Class A common stock converted to New FiscalNote Class A common stock

     8,997,504        1.187        10,680,037  

Preferred stock

     39,846,982        1.187        47,301,940  

Options and RSUs

     4,103,776        1.187        4,871,182  

Warrants

     365,002        1.187        433,259  

Class A common stock from convertible debt(a)

     23,973,395        1.187        28,459,167  
  

 

 

    

 

 

    

 

 

 

Fully diluted Class A common stock outstanding at Closing

     77,286,659        1.187        91,745,585  

Less: Options and RSUs outstanding

     (4,103,776      1.187        (4,871,182
  

 

 

    

 

 

    

 

 

 

New FiscalNote Class A common stock issued to Old FiscalNote Stockholders

     73,182,883        1.187        86,874,403  

New FiscalNote Class B common stock issued to FiscalNote Co-Founders

     6,984,768        1.187        8,290,921  

 

*

Share amounts may not sum due to rounding.

(a)

Consists of approximately 17.4 million shares of FiscalNote Class A common stock issued to holders of convertible notes, 6.6 million shares of FiscalNote Class A common stock issued to the holder of the unpaid promissory note and 2.0 million shares of FiscalNote Class A common stock issued to the holders of convertible notes related to acquisitions as discussed in Notes 3g, 3h and 3j to the pro forma information below. Excludes 2.7 million shares of New FiscalNote Class A common stock issued to the holders of the FrontierView Convertible Notes that converted into shares of New FiscalNote Class A common stock immediately subsequent to the Closing

 

5


(3)

The New FiscalNote Class B common stock issued to Tim Hwang and Gerald Yao entitle the holders to twenty-five (25) votes per share until the earlier of (a) transfer by the holders of New FiscalNote Class B common stock to any other person, except for specified trusts, retirement accounts, corporations or similar entities formed for financial or estate planning purposes and beneficially owned by the holders of New FiscalNote Class B common stock, (b) the death or incapacity of such holder of New FiscalNote Class B common stock, (c) the date specified by an affirmative vote of a majority of the outstanding New FiscalNote Class B common stock, voting as a single class, (d) the date on which the outstanding shares of New FiscalNote Class B common stock represent less than 50% of the shares of New FiscalNote Class B common stock that were outstanding as of the Closing Date, or (e) the seven-year anniversary of the Closing Date.

The following unaudited pro forma condensed combined balance sheet as of March 31, 2022 and the unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2022 and the year ended December 31, 2021 are derived from, and should be read in conjunction with, the following historical financial statements of DSAC and FiscalNote and the accompanying notes thereof, which are included in the proxy statement/prospectus:

 

   

DSAC’s unaudited financial statements and related notes as of and for the three months ended March 31, 2022.

 

   

DSAC’s audited financial statements and related notes for the year ended December 31, 2021.

 

   

FiscalNote’s audited consolidated financial statements and related notes for the year ended December 31, 2021.

 

   

FiscalNote’s unaudited consolidated financial statements and related notes as of and for the three months ended March 31, 2022.

 

   

DSAC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

   

FiscalNote’s Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information. The pro forma adjustments do not consider borrowings and financings that may have occurred subsequent to March 31, 2022, nor do they reflect anticipated financings that may occur in the normal course of business.

 

6


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of March 31, 2022

(Amounts in thousands of U.S. dollars, except per share data)

 

                   Pro Forma
Transaction
Adjustments
           Combined
Pro Forma
 
     Duddell      FiscalNote                      
     (Historical)      (Historical)            Note         

Current Assets

             

Cash and cash equivalents

   $ 213      $ 39,684      $ 175,124       3a      $ 110,835  
           75,000       3b     
           (50,000     3h     
           (55,420     3i     
           (7,410     3k     
           (15,000     3n     
           (51,356     3l     

Restricted cash

     —          840        —            840  

Accounts receivable, net

     —          14,818        —            14,818  

Costs capitalized to obtain revenue contracts, net

     —          2,262        —            2,262  

Deferred costs

     —          4,067        (4,067     3l        —    

Prepaid expenses and other current assets

     354        6,705        —            7,059  
  

 

 

    

 

 

    

 

 

      

 

 

 

Total current assets

     567        68,376        66,871          135,814  

Property and equipment, net

     —          7,462        —            7,462  

Capitalized software costs, net

     —          8,841        —            8,841  

Noncurrent costs capitalized to obtain revenue contracts, net

     —          3,814        —            3,814  

Operating lease assets

     —          24,155        —            24,155  

Goodwill

     —          188,707        —            188,707  

Customer relationships, net

     —          59,939        —            59,939  

Database, net

     —          21,838        —            21,838  

Intangible assets, net

     —          32,211        —            32,211  

Investments and cash held in Trust Account

     175,124        —          (175,124     3a        —    
  

 

 

    

 

 

    

 

 

      

 

 

 

Total assets

   $ 175,691      $ 415,343      $ (108,253      $ 482,781  
  

 

 

    

 

 

    

 

 

      

 

 

 

Liabilities, temporary equity and stockholders’ equity (deficit)

             

Short-term debt and current maturities of long-term debt

   $ —        $ 18,067      $ (18,067     3b      $ —    

Accounts payable

     1,811        1,970        —            3,781  

Accrued payroll

     —          4,860        —            4,860  

Accrued expenses

     3,973        6,886        —            10,859  

Deferred revenue, current portion

     —          40,700        —            40,700  

Customer deposits

     —          1,720        —            1,720  

Contingent liabilities from acquisitions, current portion

     —          1,118        —            1,118  

Operating lease liabilities, current portion

     —          10,455        —            10,455  

Other current liabilities

     302        4,297        —            4,599  
  

 

 

    

 

 

    

 

 

      

 

 

 

Total current liabilities

     6,086        90,073        (18,067        78,092  

Long-term debt

     —          328,709        (92,316     3g        155,074  
           (85,587     3h     
           (55,324     3i     
           (9,450     3j     
           (5,732     3k     
           (14,173     3n     
           (57,603     3b     
           146,250       3b     

Convertible notes – related parties

     —          18,945        (18,945     3o        —    

Deferred tax liabilities

     —          3,118        —            3,118  

Deferred revenue, net of current portion

     —          902        —            902  

 

7


                 Pro Forma
Transaction
Adjustments
           Combined
Pro Forma
 
     Duddell     FiscalNote                     
     (Historical)     (Historical)           Note         

Deferred rent

     —         —         —            —    

Contingent liabilities from acquisitions, net of current portion

     —         2,666       —            2,666  

Sublease loss liability, noncurrent portion

     —         —         —            —    

Lease incentive liability, net of current portion

     —         —         —            —    

Operating lease liabilities, net of current portion

     —         30,101       —            30,101  

Deferred underwriting commissions

     6,125       —         (6,125     3l        —    

Derivative warrant liabilities

     10,553       —         —            10,553  

Other noncurrent liabilities

     —         1,449       —            1,449  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total liabilities

     22,764       475,963       (216,772        281,955  

Commitments and Contingencies

           

Class A ordinary shares; 17,500,000 shares subject to possible redemption at $10.00 per share at September 30, 2021

     175,000       —         (175,000     3d        —    

Redeemable, convertible preferred stock

     —         440,821       (440,821     3f        —    

Stockholders’ equity (deficit)

           

Common stock

     —         —         —            —    

Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at September 30, 2021

     —         —         —            —    

Class A ordinary shares, $0.0001 par value; 180,000,000 shares authorized; none issued and outstanding at September 30, 2021

     —         —         —         3b        12  
         —         3c     
         3       3d     
         9       3m     

Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 4,375,000 shares issued and outstanding at September 30, 2021

     —         —         —         3c        1  
         1       3m     

Additional paid-in capital

     —         —         174,997       3d      $ 737,949  
         (22,073     3e     
         440,821       3f     
         117,250       3g     
         41,899       3h     
         9,531       3j     
         18,945       3o     
         (48,319     3l     
         (10     3m     

Accumulated other comprehensive loss

     —         (546     —            (546

Accumulated deficit

     (22,073     (500,895     22,073       3e        (536,590
         (24,934     3g     
         (6,312     3h     
         (96     3i     
         (81     3j     
         (1,678     3k     
         (827     3n     
         670       3b     
         (2,437     3l     
  

 

 

   

 

 

   

 

 

      

 

 

 

Total Stockholders’ equity (deficit)

     (22,073     (501,441   $ 724,340          200,826  
  

 

 

   

 

 

   

 

 

      

 

 

 

Liabilities, temporary equity and stockholders’ equity (deficit)

   $ 175,691     $ 415,343     $ (108,253      $ 482,781  
  

 

 

   

 

 

   

 

 

      

 

 

 

 

8


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2022

(Amounts in thousands of U.S. dollars, except per share data)

 

                 Pro Forma
Adjustments
           Combined Pro
Forma
 
     Duddell
(Historical)
    FiscalNote
(Historical)
    Note               

Revenues

           

Subscription

   $ —       $ 22,779     $ —          $ 22,779  

Advisory, advertising, and other

     —         3,292       —            3,292  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total revenues

     —         26,071       —            26,071  

Operating expenses:

           

Cost of revenues

     —         7,170       —            7,170  

Research and development

     —         6,018       —            6,018  

Sales and marketing

     —         9,497       —            9,497  

Editorial

     —         3,676       —            3,676  

General and administrative

     1,922       10,557       506       4d        12,985  

Amortization of intangible assets

     —         2,608       —            2,608  

Transaction gains

     —         (1,045     —            (1,045
  

 

 

   

 

 

   

 

 

      

 

 

 

Total operating expenses

     1,922       38,481       506          40,909  
  

 

 

   

 

 

   

 

 

      

 

 

 

Operating loss

     (1,922     (12,410     (506        (14,838

Interest expense, net

     —         (22,523     22,122       4b        (4,151
         (3,750     4h     

Change in fair value of warrant and derivative liabilities

     9,135       (1,338     1,338       4c        9,135  

Gain on PPP loan upon extinguishment

     —         7,667       —            7,667  

Other expense

     —         (121     —            (121

Interest earned on investments held in Trust Account

     23       —         (23     4a        —    
  

 

 

   

 

 

   

 

 

      

 

 

 

Net loss before income taxes and loss on equity method investment

     7,236       (28,725     19,181          (2,308

Benefit for income taxes

     —         374       —         4g        374  
  

 

 

   

 

 

   

 

 

      

 

 

 

Net loss

     7,236       (28,351     19,181          (1,934

Other comprehensive loss, net of tax

     —         85       —            85  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total comprehensive loss

   $ 7,236     $ (28,266)     $ 19,181        $ (1,849)  
  

 

 

   

 

 

   

 

 

      

 

 

 

Weighted average shares outstanding of ordinary shares subject to redemption, basic and diluted

     17,500,000           

Basic and diluted net income per share, ordinary shares subject to redemption

   $ 0.33           

Weighted average shares outstanding of ordinary shares, basic and diluted

     4,375,000       15,802,078            129,740,324  

Basic and diluted net loss per share, ordinary shares

   $ 0.33 $        (1.26        $ (0.01)  

 

9


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2021

(Amounts in thousands of U.S. dollars, except per share data)

 

                 Pro Forma
Adjustments
          

Combined

Pro Forma

 
     Duddell
(Historical)
    FiscalNote
(Historical)
    Note               

Revenues:

           

Subscription

   $ —       $ 74,002     $ —          $ 74,002  

Advisory, advertising, and other

     —         8,910       —            8,910  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total revenues

     —         82,912       —            82,912  

Operating expenses:

           

Cost of revenues

     —         21,802       —            21,802  

Research and development

     —         24,017       —            24,017  

Sales and marketing

     —         29,676       —            29,676  

Editorial

     —         14,634       —            14,634  

General and administrative

     5,940       32,491       6,723       4d        47,592  
         2437       4f     

Amortization of intangible assets

     —         9,359       —            9,359  

Loss on sublease

     —         1,817       —            1,817  

Transaction costs

     —         4,698       —            4,698  
  

 

 

   

 

 

   

 

 

      

 

 

 

Total operating expenses

     5,940       138,494       9,160          153,594  
  

 

 

   

 

 

   

 

 

      

 

 

 

Operating loss

     (5,940     (55,582     (9.160        (72,346

Interest expense, net

     —         (64,800     63,194       4b        (49,864
         (33,258     4e     
         (15,000     4h     

Change in fair value of warrant and derivative liabilities

     2,213       3,405       (3,405     4c        2,213  

Financing cost – derivative warrant liabilities

     —         —         —            —    

Other expense, net

     —         (333     —            (333

Interest earned on investments held in Trust Account

     71       —         (71     4a        —    
  

 

 

   

 

 

   

 

 

      

 

 

 

Net loss before income taxes

     (3,656     (117,310     2,300          (118,666

Benefit for income taxes

     —         (7,889     —         4g        (7,889
  

 

 

   

 

 

   

 

 

      

 

 

 

Net loss

     (3,656     (109,421     2,300          (110,777

Other comprehensive loss, net of tax

     —         (568     —            (568
  

 

 

   

 

 

   

 

 

      

 

 

 

Total comprehensive loss

   $ (3,656)     $ (109,989)     $ 2,300        $ (111,345)  
  

 

 

   

 

 

   

 

 

      

 

 

 

Weighted average shares outstanding of ordinary shares subject to redemption, basic and diluted

     17,500,000           

Basic and diluted net income per share, ordinary shares subject to redemption

   $ (0.17         

Weighted average shares outstanding of ordinary shares, basic and diluted

     4,375,000       13,061,380            129,740,324  

Basic and diluted net loss per share, ordinary shares

   $ (0.17)     $ (23.50)          $ (0.85)  

 

10


Note 1. Basis of Pro Forma Presentation

The Business Combination is expected to be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under the guidance in ASC 805, DSAC is expected to be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of New FiscalNote issuing stock for the net assets of DSAC, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of FiscalNote.

The unaudited pro forma condensed combined balance sheet as of March 31, 2022 assumes that the Business Combination and related transactions occurred on March 31, 2022. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2022 and the year ended December 31, 2021 reflects the pro forma effect of the Business Combination and related transactions as if they had been completed on January 1, 2021. These periods are presented on the basis of FiscalNote as the accounting acquirer.

The pro forma adjustments reflecting the consummation of the Business Combination are based on certain currently available information and certain assumptions and methodologies that DSAC believes are reasonable under the circumstances. The unaudited pro forma adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material. DSAC believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the business combination.

The unaudited pro forma condensed combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination and related transactions taken place on the dates indicated, nor do they purport to project the future consolidated results of operations or financial position of the combined company. They should be read in conjunction with the unaudited and audited consolidated financial statements and notes thereto of each of DSAC and FiscalNote as of and for the three months ended March 31, 2022 and the year ended December 31, 2021, respectively, and included in the proxy statement/prospectus.

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”), operations and financial position of the registrant as an autonomous entity (“Autonomous Entity Adjustments”) and option to present the reasonably estimable synergies and dissynergies and other transaction effects that have occurred or are reasonably expected to occur (“Management’s Adjustments”). DSAC has elected not to present Management’s Adjustments in the unaudited pro forma condensed combined financial information.

There were no intercompany balances or transactions between DSAC and FiscalNote as of the date and for the periods of these unaudited pro forma condensed combined financial statements.

Note 2. Accounting Policies

Upon consummation of the Business Combination, management will perform a comprehensive review of the two entities’ accounting policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of the post-combination company. Based on its initial analysis, management has not identified differences that would have an impact on the unaudited pro forma condensed combined financial information.

 

11


The income tax effects of any pro forma adjustments do not appear within the unaudited pro forma condensed combined financial statements as any change in the tax benefit would have a corresponding impact on the deferred tax balance, which would be offset by an increase in the valuation allowance given that FiscalNote incurred significant losses during the historical periods presented.

The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had the post-combination company filed consolidated income tax returns during the periods presented.

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of operations are based upon the number of DSAC’s ordinary shares outstanding, assuming the Business Combination, and related transactions occurred on January 1, 2021.

Note 3. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2022 are as follows:

 

  a)

Reflects the reclassification of cash and cash equivalents held in DSAC’s Trust Account that becomes available for transaction expenses, redemption of public shares, and the operating activities following the Business Combination.

 

  b)

Reflects net proceeds from the Debt Financing (based on debt outstanding as of March 31, 2022 under the First Out Term Loan) of $75.0 million as well as the corresponding modification of the existing $75.7 million of current notes held by FiscalNote. $18.1 million of short-term debt and $57.6 million of long-term debt were treated as extinguished with $0.7 million of deferred financing costs being expensed and $3.5 million being deferred and amortized over the life of the debt.

 

  c)

Represents the conversion of DSAC Class B ordinary shares to DSAC Class A ordinary shares immediately prior to the Business Combination.

 

  d)

Represents the reclassification of DSAC Class A ordinary shares previously subject to possible redemption and presented as temporary equity to permanent equity.

 

  e)

Reflects the elimination of DSAC’s accumulated deficit.

 

  f)

Reflects the conversion of $440.8 million of FiscalNote redeemable, convertible preferred stock (Series A through Series G) into approximately 39.8 million shares of FiscalNote Class A common stock immediately prior to the Business Combination.

 

  g)

Reflects the conversion of $117.3 million in aggregate outstanding principal amount of FiscalNote convertible notes into approximately 15.3 million shares of FiscalNote Class A common stock immediately prior to the Business Combination as well as the settlement of the related embedded derivatives and discounts in the amount of $24.9 million. $10.4 million of convertible notes were not converted to shares of New FiscalNote Class A common stock and will remain outstanding until the earlier of the optional conversion of the holder or the maturity dates in 2025.

 

12


  h)

Reflects $50.0 million payment to the holder of FiscalNote’s senior secured promissory note with the remaining $41.9 million of principal converted into approximately 6.6 million shares of FiscalNote Class A common stock immediately prior to the Business Combination and further convert into approximately 7.8 million shares of New FiscalNote Class A common stock in connection with the Closing, as well as the elimination of the related embedded derivatives and discounts.

 

  i)

Reflects the full paydown of $55.4 million of FiscalNote’s Last out term loan immediately prior to the Business Combination. FiscalNote’s First Out Term Loan was amended pursuant to the terms of the New Senior Credit Facility.

 

  j)

Reflects the conversion of $9.5 million in aggregate outstanding principal amount of convertible notes related to acquisitions made by FiscalNote during 2021 into approximately 2.0 million shares of FiscalNote Class A common stock immediately prior to the Business Combination as well as the elimination of the related embedded derivatives and premiums.

 

  k)

Reflects paydown of $7.4 million of FiscalNote’s term loans related to acquisitions made during 2021.

 

  l)

Reflects the payment and reclassification of DSAC and FiscalNote transaction and debt prepayment costs of approximately $51.3 million, expected to be incurred related to the closing of the Business Combination. Of that amount, $6.1 million relates to the cash settlement of deferred underwriter compensation incurred as part of DSAC’s IPO to be paid upon the consummation of a Business Combination. The remaining transaction costs of $45.2 million include direct and incremental costs, such as legal, third party advisory, investment banking, debt costs and other miscellaneous fees. Does not include $4.1 million of costs capitalized by FiscalNote within its historical financial statements. Transaction costs not determined to be direct and incremental have been recorded through Accumulated Deficit and will be expensed as incurred.

 

  m)

Reflects the issuance of 86.8 million shares of New FiscalNote Class A common stock to FiscalNote stockholders and 8.3 million shares of New FiscalNote Class B common stock to FiscalNote Co-Founders Timothy Hwang and Gerald Yao as consideration for the Business Combination. The New FiscalNote Class B common stock entitles holders to twenty-five (25) votes per share and will allow such holders to exercise control over New FiscalNote with approximately 63.1% of the outstanding voting power.

 

  n)

Reflects the paydown of $15.0 million of FiscalNote’s subordinated promissory notes.

 

  o)

Reflects the conversion of $18.9 million in aggregate outstanding principal amount of convertible notes — related party into 2.7 million shares of FiscalNote Class A common stock as well as the elimination of the related embedded derivatives and premiums. Pursuant to the terms of the convertible notes this conversion will occur immediately subsequent to the closing of the Transactions.

Note 4. Unaudited Pro Forma Condensed Combined Statements of Operations

The pro forma adjustments included in the unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2022 and the year ended December 31, 2021, are as follows:

 

  a)

Represents the elimination of interest income on DSAC’s Trust Account for the three months ended March 31, 2022 and the year ended December 31, 2021.

 

  b)

Represents the elimination of the historical interest expense associated with FiscalNote’s convertible notes, senior secured notes, and certain term loans which will either convert to shares of FiscalNote Class A common stock or be paid down immediately prior to the closing of the Business Combination. Refer to Notes 3f through 3l for more information.

 

13


  c)

Represents the elimination of the income statement impact of the change in the fair value of the embedded derivatives related to the FiscalNote convertible notes and senior secured promissory note as discussed further in Notes 3g and 3h.

 

  d)

Reflects $0.5 and $6.7 million of compensation cost related to certain performance-based stock options that vested immediately upon the successful listing of FiscalNote shares as well as compensation expense associated with the Earnout RSUs that could be earned by holders of Unvested FiscalNote Options as of the date of the Business Combination for the three months ended March 31, 2022 and the year ended December 31, 2021, respectively. The Earnout RSUs will be treated as new market-based stock option awards that are based upon the Triggering Event prices and will be accounted for under ASC 718 — Share Based Payments. These awards result in an expense as the vesting conditions will require future service through the Triggering Event for all Unvested FiscalNote Options and the later of the Triggering Event or the service vesting requirements of the underlying Unvested FiscalNote Options for issuance of the Earnout RSUs.

 

  e)

Reflects the immediate expense of FiscalNote’s deferred financing costs and premium/discount related to debt that was paid down and/or converted to shares of New FiscalNote Class A common stock. All such costs are one time and as such are only attributed to the year ended December 31, 2021.

 

  f)

Reflects transaction costs that were expensed on the Closing Date as they are not considered to be direct and incremental to the Transaction. All such costs are one time and as such are only attributed to the year ended December 31, 2021.

 

  g)

Does not reflect an adjustment to income tax expense as a result of the pro forma adjustments as FiscalNote has historically been in a net loss position. Any tax benefit in the period would have a corresponding deferred tax impact to the period which would offset and therefore has recorded no net income tax expense.

 

  h)

Reflects the incremental expense from the aggregate principal amount of up to $150.0 million (including the First Out Term Loans under FiscalNote’s existing senior credit facility, which was refinanced under the new facility on amended terms) from the Debt Financing referenced in Note 3b. The annual interest consists of the greater of (a) Prime Rate plus 5.0% and (b) 9.0% and PIK interest of 1.00%. A one-eighth percent change in the assumed interest rate associated with the Debt Financing would result in additional annual interest expense (if the interest rate increases) or a reduction (if the interest rate decreases) to annual interest expense of approximately $0.6 million or a quarterly interest expense of approximately $0.2 million.

Note 5. Loss Per Share

Pro Forma Weighted Average Shares (Basic and Diluted)

The following pro forma weighted average share calculation has been prepared for the three months ended March 31, 2022 and the year ended December 31, 2021. The unaudited condensed combined pro forma loss per share (“LPS”), basic and diluted, are computed by dividing loss by the weighted-average number of shares of common stock outstanding during the period.

Prior to the Business Combination, DSAC had two classes of shares: Class A Ordinary Shares and Class B Ordinary Shares. The Class B Ordinary Shares were held by the Sponsor and directors. Prior to the Closing of the Business Combination and in connection with the redomestication of DSAC, DSAC adopted a new charter whereby each issued and outstanding DSAC Class B Ordinary Share automatically converted on a one-for-one basis into DSAC Class A Ordinary Shares. Each issued and outstanding DSAC Class A ordinary share was renamed, and has the same rights and

 

14


restrictions attached to the shares of New FiscalNote Class A common stock. New FiscalNote issued shares of New FiscalNote Class B common stock to FiscalNote Co-Founders Timothy Hwang and Gerald Yao in exchange for their shares of FiscalNote Class A common stock, which carry a 25:1 voting right. Both classes of New FiscalNote common stock have the same interest in the earnings of New FiscalNote. As such, they have been considered together for purposes of the per share calculations below.

As of March 31, 2022, DSAC has 8.8 million outstanding public warrants sold during its initial public offering and 7.0 million warrants sold in two private placements, resulting in warrants to purchase an aggregate of 15.8 million DSAC Class A Ordinary Shares following the initial public offering. The warrants are exercisable at $11.50 per share which exceeds the current market price of DSAC’s Class A Ordinary Shares. These warrants are considered anti-dilutive and excluded from the loss per share calculation when the exercise price exceeds the average market value of the ordinary share price during the applicable period. Additionally, FiscalNote has potentially dilutive securities in the form of options, earnout shares and RSUs which are considered antidilutive due to losses of FiscalNote. As a result, pro forma diluted LPS is the same as pro forma basic LPS for the periods presented.

 

15


     For the three months
ended March 31, 2022
     For the year ended
December 31, 2021
 

Pro forma net loss attributable to common shareholders – basic and diluted

   $ (1,934)      $ (110,777)  

Weighted average shares outstanding – basic and diluted

     129,740,324        129,740,324  

Pro Forma Loss Per Share – basic and diluted

   $ (0.01)      $ (0.85)  

Pro Forma Weighted Average Shares – Basic and Diluted

     

Public shares

     27,875,665        27,875,665  

Initial shares

     4,375,000        4,375,000  

Class A Shares

     89,198,738        89,198,738  

Class B Shares

     8,290,921        8,290,921  
  

 

 

    

 

 

 

Total Pro Forma Weighted Average Shares – basic and diluted

     129,740,324        129,740,324  

 

16