0001193125-18-325576.txt : 20181113 0001193125-18-325576.hdr.sgml : 20181113 20181113165206 ACCESSION NUMBER: 0001193125-18-325576 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20181113 DATE AS OF CHANGE: 20181113 GROUP MEMBERS: DAVID P. FIALKOW GROUP MEMBERS: GC ENTREPRENEURS FUND IX, L.P. GROUP MEMBERS: GENERAL CATALYST GP IX, LLC GROUP MEMBERS: GENERAL CATALYST GROUP MANAGEMENT, LLC GROUP MEMBERS: GENERAL CATALYST PARTNERS IX, L.P. GROUP MEMBERS: HEMANT TANEJA GROUP MEMBERS: JOEL E. CUTLER GROUP MEMBERS: KENNETH I. CHENAULT SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTERSECTIONS INC CENTRAL INDEX KEY: 0001095277 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 541956515 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-80290 FILM NUMBER: 181178762 BUSINESS ADDRESS: STREET 1: 3901 STONECROFT BOULEVARD CITY: CHANTILLY STATE: VA ZIP: 20151 BUSINESS PHONE: 7034886100 MAIL ADDRESS: STREET 1: 3901 STONECROFT BOULEVARD CITY: CHANTILLY STATE: VA ZIP: 20151 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: General Catalyst Group IX, L.P. CENTRAL INDEX KEY: 0001732036 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 20 UNIVERSITY ROAD STREET 2: 4TH FLOOR CITY: CAMBRIDGE STATE: MA ZIP: 02138 BUSINESS PHONE: 617-234-7000 MAIL ADDRESS: STREET 1: 20 UNIVERSITY ROAD STREET 2: 4TH FLOOR CITY: CAMBRIDGE STATE: MA ZIP: 02138 SC 13D 1 d648681dsc13d.htm SC 13D SC 13D

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO §240.13d-1(a) AND AMENDMENTS THERETO FILED

PURSUANT TO §240.13d-2(a)

Under the Securities Exchange Act of 1934

(Amendment No.     )*

 

 

Intersections Inc.

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

460981301

(CUSIP Number)

Christopher McCain

Chief Legal Officer

General Catalyst Partners

20 University Road, 4 Floor, Cambridge, MA 02138

Telephone: (617) 234-7000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

October 31, 2018

(Date of Event Which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

 

 

 

*

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 


CUSIP No. 460981301

  13D   Page 2 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

General Catalyst Group IX, L.P.

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☒        (b)  ☐

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

WC

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

Delaware

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

PN

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 3 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

GC Entrepreneurs Fund IX, L.P.

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☒        (b)  ☐

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

WC

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

Delaware

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

PN

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 4 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

General Catalyst Partners IX, L.P.

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☐        (b)  ☒

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

AF

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

Delaware

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

HC

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 5 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

General Catalyst GP IX, LLC

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☐        (b)  ☒

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

AF

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

Delaware

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

HC

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 6 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

General Catalyst Group Management, LLC

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☐        (b)  ☒

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

AF

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

Delaware

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

HC

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 7 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

Kenneth I. Chenault

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☐        (b)  ☒

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

AF

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

USA

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

IN

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 8 of 18 Pages

 

 

 

  (1) 

 

Names of reporting persons

 

Joel E. Cutler

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☐        (b)  ☒

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

AF

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

USA

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

IN

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 9 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

David P. Fialkow

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☐        (b)  ☒

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

AF

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

USA

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

IN

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 10 of 18 Pages

 

 

 

  (1)   

Names of reporting persons

 

Hemant Taneja

  (2)  

Check the appropriate box if a member of a group (see instructions)*

(a)  ☐        (b)  ☒

 

  (3)  

SEC use only

 

    

  (4)  

Source of funds (see instructions)

 

AF

  (5)  

Check if disclosure of legal proceedings is required pursuant to items 2(d) or 2(e)  ☐

 

    

  (6)  

Citizenship or place of organization

 

USA

Number of

shares

beneficially

owned by

each

reporting

person

with

 

     (7)    

Sole voting power

 

0

     (8)   

Shared voting power

 

18,485,567 (1)

     (9)   

Sole dispositive power

 

0

   (10)   

Shared dispositive power

 

18,485,567 (1)

(11)  

Aggregate amount beneficially owned by each reporting person

 

18,485,567 (1)

(12)  

Check if the aggregate amount in Row (11) excludes certain shares (see instructions)  ☐

 

    

(13)  

Percent of class represented by amount in Row (11)

 

59.75% (2)

(14)  

Type of reporting person (see instructions)

 

IN

 

(1)

Beneficial ownership of the above referenced shares is being reported hereunder because the Reporting Person may be deemed to beneficially own (a) 13,130,620 shares of Common Stock (as defined in Item 1 below) held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements (as defined in Item 4 below), and (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note (as defined in Item 3 below) acquired by WC SACD One Parent, Inc. pursuant to the Note Purchase Agreement (as defined in Item 4 below). The number of shares over which the Reporting Person may be deemed to have beneficial ownership pursuant to the Tender and Support Agreements includes 11,973,037 shares of Common Stock that are currently issued and outstanding, 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes (as defined in Item 3 below) and 443,590 shares of Common Stock underlying stock options that are currently exercisable or exercisable within 60 days of October 31, 2018, in each case that are held by those stockholders of Intersections Inc. who have granted WC SACD One Parent, Inc. an irrevocable proxy over their record and beneficially owned shares of Common Stock pursuant to the Tender and Support Agreements.

(2)

The percentage calculation is based on 30,940,776 outstanding shares of Common Stock, which is the sum of (a) 24,428,246 shares of Common Stock issued and outstanding as of October 31, 2018 (based on the representation by Intersections Inc. in the Merger Agreement (as defined in Item 4 below)), (b) 5,354,947 shares of Common Stock that are currently issuable upon conversion of the Parent Note, (c) 713,993 shares of Common Stock that are currently issuable upon conversion of the Notes held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements, and (d) 443,590 shares of Common Stock underlying stock options which are currently exercisable or exercisable within 60 days of October 31, 2018 that are held by certain stockholders of Intersections Inc., over which WC SACD One Parent, Inc. has been granted irrevocable proxies pursuant to the Tender and Support Agreements.


CUSIP No. 460981301

  13D   Page 11 of 18 Pages

 

 

 

Item 1

Security and Issuer

This statement on Schedule 13D (this “Schedule 13D”) relates to the common stock, $0.01 par value per share (the “Common Stock”), of Intersections Inc., a Delaware corporation (the “Company”), having its principal executive office at 3901 Stonecroft Boulevard, Chantilly, VA 20151.

 

Item 2

Identity and Background.

This Schedule 13D is being filed by General Catalyst Group IX, L.P., a Delaware limited partnership (“GC IX”), GC Entrepreneurs Fund IX, L.P., a Delaware limited partnership (together with GC IX, the “GC Funds”), General Catalyst Partners IX, L.P., a Delaware limited partnership (“GC GP LP”), General Catalyst GP IX, LLC, a Delaware limited liability company (“GC GP LLC”), General Catalyst Group Management, LLC, a Delaware limited liability company (“GC Management LLC”), and the Managers (as defined below), who are collectively referred to herein as the “Reporting Persons”. GC GP LP is the sole general partner of each of the GC Funds. GC GP LLC is the sole general partner of GC GP LP. GC Management LLC is the manager of GC GP LLC. Kenneth I. Chenault, Joel E. Cutler, David P. Fialkow and Hemant Taneja (collectively, the “Managers”) are Managing Directors of GC Management LLC and the managers of the general partner of the sole and managing member of GC Management LLC. Each of the Managers is a U.S. citizen. The address of the principal business office of each of the Reporting Persons is 20 University Road, 4th Floor, Cambridge, MA 02138.

The principal business of the GC Funds, private investment limited partnerships advised by GC Management LLC, is to invest in and assist early-stage and transformational investments located principally in the United States. The principal business of GC GP LP is to act as the sole general partner of each of the GC Funds. The principal business of GC GP LLC is to act as the sole general partner of GC GP LP. The principal business of GC Management LLC is to act as the advisor to the GC Funds and a number of affiliated entities and serve as the sole manager of GC GP LLC and a number of affiliated entities. The principal business of each of the Managers is to manage GC Management LLC, GC GP LLC, GC GP LP, the GC Funds and a number of affiliated entities with similar businesses.

During the five years prior to the date hereof, none of the Reporting Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

The Reporting Persons have entered into a Joint Filing Agreement, dated as of the date hereof (the “Joint Filing Agreement”), a copy of which is filed with this Schedule 13D as Exhibit 1, pursuant to which the Reporting Persons have agreed to file this Schedule 13D jointly in accordance with the provisions of Rule 13d-1(k) under the Act.

As a result of certain agreements governing the investment of the GC Funds in WC SACD One, Inc. (“WC SACD”) and the transactions and agreements described in Item 4, certain Reporting Persons may be deemed to be members of a group that includes WndrCo Holdings, LLC (“WndrCo”), iSubscribed Inc. (“iSubscribed”), WC SACD, WC SACD One Parent, Inc. (“Parent”), WC SACD One Merger Sub, Inc. (“Merger Sub”) and the Rollover Holders (as defined in Item 4) for purposes of Section 13(d) under the Act. To the Reporting Persons’ knowledge, each of WndrCo and its applicable affiliates and iSubscribed and its applicable affiliates are filing separate statements on Schedules 13D with the Securities and Exchange Commission (the “SEC”) on or around the date hereof. Certain of the Rollover Holders have filed separate amended Schedules 13D with the SEC, including amended Schedules 13D filed by Loeb Holding Corporation with the SEC on October 31, 2018 and November 6, 2018 and amended Schedules 13D filed by Michael Stanfield with the SEC on October 31, 2018 and November 6, 2018.

 

Item 3

Source and Amount of Funds or Other Consideration.

On October 31, 2018, each of the GC Funds, iSubscribed and WndrCo (collectively, the “Sponsors”), indirectly through a newly formed joint venture, WC SACD, acquired equity interests in Parent, the proceeds of which were used by Parent to acquire a $30,000,000 aggregate principal amount senior secured convertible note of the Company (the “Parent Note” and, together with $4,000,000 aggregate principal amount of senior secured convertible notes of the Company issued to certain of the Rollover Holders (as defined in Item 4), the “Notes” and each individually, a “Note”).

Each of the GC Funds used working capital of such fund for its indirect equity investments in Parent, which funds in turn contributed to the purchase of the Parent Note.

 

Page 11 of 18


CUSIP No. 460981301

  13D   Page 12 of 18 Pages

 

 

 

Item 4

Purpose of Transaction.

Merger Agreement

On October 31, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Parent and Merger Sub, a Delaware corporation and wholly-owned subsidiary of Parent. Subject to the terms and conditions of the Merger Agreement, (i) Merger Sub is to commence a tender offer (the “Offer”) to purchase any and all of the issued and outstanding shares of Common Stock at a price of $3.68 per share (the “Offer Price”) and (ii) following consummation of the Offer, at the effective time of the Merger (the “Effective Time”), Merger Sub will merge with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent (the “Merger”), and each issued and outstanding share of Common Stock will be converted into the right to receive the Offer Price in cash, without interest and subject to deduction of any required withholding tax, except for (A) shares of Common Stock held in the treasury of the Company or owned, directly or indirectly, by Parent or Merger Sub immediately prior to the Effective Time (including certain shares of Common Stock beneficially owned by Michael Stanfield, Stanfield Family Investments LLC, Loeb Holding Corporation and David McGough (the “Rollover Shares”; such holders of Rollover Shares, the “Rollover Holders”) that will be contributed and assigned to WC SACD prior to the Effective Time pursuant to the Contribution and Assignment Agreements (as defined below), and thereafter to Parent), and (B) Dissenting Shares (as defined in the Merger Agreement). The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251(h) of the General Corporation Law of the State of Delaware, pursuant to which no stockholder vote will be required to consummate the Merger. The Offer and the Merger are subject to certain customary closing conditions, including the expiration of the applicable period under the Hart-Scott-Rodino Act and a minimum tender condition that requires the tender of both more than 50% of the Company’s outstanding shares and more than 50% of the Company’s outstanding shares held by stockholders other than directors, executive officers, and other Rollover Holders.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by the Merger Agreement, attached hereto as Exhibit 2, which is incorporated herein by reference.

Note Purchase Agreement

On October 31, 2018, the Company entered into a Note Purchase and Exchange Agreement (the “Note Purchase Agreement”) with Loeb Holding Corporation, David A. McGough and Parent (collectively, the “Investors”). Pursuant to the Note Purchase Agreement, on the date of execution of the Note Purchase Agreement (the “Closing Date”), the Company issued the Notes and (i) Parent purchased from the Company the Parent Note for cash and (ii) Loeb Holding Corporation and David A. McGough exchanged $4,000,000 aggregate principal amount of certain unsecured convertible notes previously issued by the Company to such Investors for $4,000,000 aggregate principal amount of Notes. The Notes have an interest rate of 6.0% per annum for the first 12 months following the Closing Date and an interest rate of 8.0% per annum for the remaining term of the Notes. The Notes will mature on the date that is 36 months following the Closing Date. The Notes are secured by a first-priority security interest on all of the assets of the Company and its subsidiaries, subject to certain exceptions, and the obligations of the Company under the Notes are guaranteed by its subsidiaries.

The Notes will convert automatically into Common Stock and/or Preferred Stock (as defined below) upon the earlier of (i) the time that is immediately prior to the Effective Time and (ii) the time that is immediately prior to consummation of a Superior Transaction (as defined in the Note Purchase Agreement), and each Note is convertible into Common Stock and/or Preferred Stock, as applicable, at the option of the relevant holder, at any time on or after (iii) the date on which closing of an Alternative Transaction (as defined in the Note Purchase Agreement) occurs, which encompasses, among other things, certain changes relating to the beneficial ownership, indebtedness and solvency of the Company, (iv) a determination by the Company’s Board of Directors that the Company is no longer pursuing a process to sell itself, and (v) April 30, 2019 (each of (i) through (v), a “Trigger Date”).

On or after any Trigger Date, the Notes automatically convert or at the election of the holder are convertible, as applicable, into either (i) to the extent that the Company’s Common Stock remains listed on the Nasdaq Stock Market and if such Trigger Date is prior to the date on which Company stockholder approval of the Notes becomes effective (such effectiveness date, the “Stockholder Approval Date”), an aggregate of 6,068,940 shares of Common Stock and 1,781,807 shares of Company 6.0% Series A Preferred Stock, par value $0.01 per share (“Preferred Stock”), which Preferred Stock will be convertible into shares of Common Stock following the Stockholder Approval Date, or (ii) if such Trigger Date is on or after the Stockholder Approval Date, an aggregate of 14,977,974 shares of Common Stock. Share figures are based on outstanding shares of the Company on an as-converted basis as of October 31, 2018.

 

Page 12 of 18


CUSIP No. 460981301

  13D   Page 13 of 18 Pages

 

 

 

Subject to the terms and conditions of the Note Purchase Agreement, the Notes are convertible into Common Stock at a conversion price of $2.27 per share (subject to adjustment as provided in the Notes). For so long as any Notes (or Preferred Stock issued upon conversion of the Notes) remain outstanding or any Investor holding at least 10% of the then-aggregate unpaid principal amount of the Notes owns Common Stock comprising at least 50% of the shares issuable upon conversion of its Notes, if there is a termination of the Merger Agreement by the Company other than for cause and Parent then holds at least 80% of its initial principal amount of Notes (or shares issued upon conversion), a majority of the Company’s Board of Directors will resign effective immediately and Parent will have the right to designate directors to fill such vacancies (provided that one director so appointed by Parent shall be an independent director designated by Loeb Holding Corporation) and the right to appoint the Chief Executive Officer of the Company.

The foregoing descriptions of the Note Purchase Agreement and the Notes do not purport to be complete and are qualified in their entirety by the Note Purchase Agreement (which includes the Form of Note as an exhibit thereto), attached hereto as Exhibit 3, which is incorporated herein by reference.

Rollover and Tender and Support Agreements

Concurrently with the execution of the Merger Agreement, the Notes and the Note Purchase Agreement, WC SACD entered into Contribution and Assignment Agreements (the “Contribution and Assignment Agreements”), dated as of the date of the Merger Agreement, with the Rollover Holders, pursuant to which the Rollover Holders will contribute, immediately following the consummation of the Offer, the Rollover Shares to Parent in exchange for equity interests in WC SACD. During the period prior to consummation of the Offer (or an earlier stockholder vote in respect of the Merger Agreement), the Rollover Holders, on the one hand, and WC SACD, on the other hand, have agreed to work in good faith to, among other things, (i) finalize a stockholder’s agreement for WC SACD (with rollover terms materially consistent with those attached to the Contribution and Assignment Agreements) and (ii) finalize an amended and restated certificate of incorporation and bylaws for WC SACD. As set forth in Schedule I to each Rollover Holder’s Contribution and Assignment Agreement, (i) Loeb Holding Corporation has agreed to roll 8,801,702 shares of Common Stock (which assumes conversion of the Note held by Loeb Holding Corporation into 1,321,586 shares of Common Stock), (ii) David A. McGough has agreed to roll 800,000 shares of Common Stock (which assumes conversion of the Note held by David A. McGough into 440,529 shares of Common Stock), (iii) Michael R. Stanfield has agreed to roll 922,154 shares of Common Stock, and (iv) Stanfield Family Investments LLC has agreed to roll 577,846 shares of Common Stock.

Concurrently with the execution of the Merger Agreement and the Contribution and Assignment Agreements, Parent also entered into Tender and Support Agreements (the “Tender and Support Agreements”), dated as of the date of the Merger Agreement and the Note Purchase Agreement, with the Rollover Holders, pursuant to which each of the Rollover Holders has agreed, among other things, subject to the terms and conditions set forth therein, to (i) tender in the Offer all of the Rollover Holder’s beneficially owned outstanding shares of Common Stock that are not Rollover Shares and (ii) vote or consent in favor of (a) authorization and approval of the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, (b) a proposal to permit the conversion of Notes into shares of Common Stock and Preferred Stock, and (c) any proposal to increase the number of shares of Common Stock and Preferred Stock authorized pursuant to the Company’s Certificate of Incorporation to permit such conversion and permit the exercise of certain preemptive rights to the Investors, in each case as contemplated by the terms of the Note Purchase Agreement. Pursuant to the Tender and Support Agreements, the Rollover Holders have also granted to Parent, its executive officers and any other designee of Parent power to act as its proxy and attorney-in-fact to vote such Rollover Holder’s shares of Common Stock owned of record or beneficially by such Rollover Holder in favor of certain matters relating to the transactions contemplated by the Merger Agreement, including, without limitation, those matters described in clause (ii) of the immediately preceding sentence.

The foregoing descriptions of the Contribution and Assignment Agreements and the Tender and Support Agreements do not purport to be complete and are qualified in their entirety by the Contribution and Assignment Agreements, attached hereto as Exhibits 4, 5, 6 and 7, respectively, and the Tender and Support Agreements attached hereto as 8, 9, 10 and 11, respectively, which are incorporated herein by reference.

 

Page 13 of 18


CUSIP No. 460981301

  13D   Page 14 of 18 Pages

 

 

 

Registration Rights Agreement

In connection with the Note Purchase Agreement, on October 31, 2018, the Investors entered into a Registration Rights Agreement with the Company (the “Registration Rights Agreement”). The Registration Rights Agreement provides the Investors with certain demand registration rights in respect of the shares of Common Stock issued to such Investors upon conversion of the Notes or the shares of Preferred Stock into which the Notes may be converted pursuant to the Note Purchase Agreement, subject to certain conditions. In the event that the Company registers additional shares of Common Stock for sale to the public, it will be required to give notice of such registration to the Investors, and, subject to certain limitations, include the shares of Common Stock held by them in such registration. The Registration Rights Agreement includes customary indemnification provisions in favor of the Investors against certain losses and liabilities arising out of or based upon any filing or other disclosure made by the Company in connection with such registration.

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the Registration Rights Agreement, attached hereto as Exhibit 12, which is incorporated herein by reference.

Binding Term Sheet

On October 31, 2018, the Sponsors entered into a Binding Term Sheet (the “Binding Term Sheet”) with WC SACD, pursuant to which WC SACD and each Sponsor agreed to negotiate in good faith definitive agreements consistent with the terms set forth in the Binding Term Sheet to govern WC SACD, the joint venture. Until definitive agreements are executed by and among WC SACD and the Sponsors, the rights and obligations set forth in the Binding Term Sheet are binding and enforceable against WC SACD and each of the Sponsors, respectively. The Binding Term Sheet contemplates that WC SACD will be governed by a board of directors comprised of at least seven members, with the Sponsors having certain designation rights as specified therein. Subject to the terms and conditions of the Binding Term Sheet, (i) certain enumerated actions of the Company require special board approval or stockholder approval, (ii) each holder of voting interests in WC SACD has customary preemptive rights that will terminate upon an initial public offering, (iii) equityholders of WC SACD have customary tag-along rights and are subject to customary transfer restrictions, (iv) WndrCo has certain drag-along rights and registration rights, and (v) the Rollover Holders are subject to certain put and call rights, as described further in the Binding Term Sheet.

The Binding Term Sheet also provides that following the Merger, WndrCo may cause the Sponsors (other than iSubscribed) and the Rollover Holders to contribute all of their interests in WC SACD into a newly formed Delaware holding corporation (“NewCo”). No later than 30 days after the contribution by the Sponsors, WndrCo and iSubscribed shall cause, subject to certain conditions, (i) iSubscribed to become a direct or indirect subsidiary of NewCo, (ii) the stockholders of iSubscribed to become equityholders of NewCo for aggregate consideration based on a $50,000,000 valuation of iSubscribed, as adjusted reasonably and in good faith for net cash (or net debt) then held by iSubscribed (sub-clauses (i) and (ii) are referred to as the “iSub Contribution”), and (iii) Hari Ravichandran to become the Chief Executive Officer of NewCo. Pursuant to the Binding Term Sheet, the rights and terms related to NewCo immediately prior to the iSub Contribution will remain the same following the iSub Contribution. As a result of the iSub Contribution, the Company will be an indirect subsidiary of NewCo and iSubscribed.

The foregoing description of the Binding Term Sheet does not purport to be complete and is qualified in its entirety by the Binding Term Sheet, attached hereto as Exhibit 13, which is incorporated herein by reference.

The purpose of the Offer and the Merger is to acquire all of the outstanding shares of Common Stock (other than the Rollover Shares). The Offer, the Merger and the transactions under the Note Purchase Agreement may result in one or more of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, including, without limitation, the acquisition of additional securities of the Company, a merger or other extraordinary transaction involving the Company, a change to the Board of Directors or management of the Company (as the surviving company in the Merger), the delisting of the Common Stock from Nasdaq, and/or the Common Stock becoming eligible for termination of registration pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Act”). If the Merger is consummated, the Company will become a privately held subsidiary of Parent, and Parent will have the ability to amend or replace the constitutive documents of the Company and to control all other actions of the Company.

The Reporting Persons reserve the right to change their intention with respect to any or all of the matters referred to in this Item 4.

 

Page 14 of 18


CUSIP No. 460981301

  13D   Page 15 of 18 Pages

 

 

 

Item 5

Interest in Securities of the Issuer.

(a) – (b)

Items 7 through 11 and 13 of the cover page of this Schedule 13D and the footnotes thereto are incorporated herein by reference. As a result of the transactions described in Item 4, as of the date of this Schedule 13D, certain Reporting Persons may be deemed to be a group for purposes of Section 13(d) of the Act and, as a member of a group, the Reporting Persons may be deemed to have beneficial ownership of securities beneficially owned by WndrCo, iSubscribed, WC SACD, Parent, Merger Sub and the Rollover Holders included in Items 7 through 11 of the applicable cover page of this Schedule 13D and the footnotes thereto.

As described in Item 4, on and after the Stockholder Approval Date, subject to certain contingencies, the Notes may be convertible into 14,977,974 shares of Common Stock, rather than 6,068,940 shares of Common Stock and 1,781,807 shares of Preferred Stock. Upon the fulfillment of such contingencies, certain of the Reporting Persons may be deemed to beneficially own an additional 8,909,034 shares of Common Stock (or an additional 9% of the Company’s outstanding Common Stock), representing an additional 7,860,912 shares of Common Stock in respect of the Parent Note and an additional 1,048,122 shares of Common Stock issuable upon the conversion of the Notes held by Loeb Holding Corporation and David A. McGough over which Parent will hold an irrevocable proxy pursuant to the Tender and Support Agreements.

Each of the Reporting Persons disclaims beneficial ownership of the shares covered by this Schedule 13D, and this Schedule 13D shall not be construed as an admission that any of the Reporting Persons is the beneficial owner for any purpose of the shares covered by this Schedule 13D, except to the extent such Reporting Person actually exercises voting or dispositive power with respect to such shares. All shares reported as beneficially owned in this Schedule 13D are reported to the knowledge of the Reporting Persons based on the representations of the Company and the Rollover Holders.

(c)

Except as described in Item 4 above, none of the Reporting Persons has effected any transaction in the Common Stock during the past 60 days.

(d)

The Rollover Holders retain their rights to receive dividends from, or the proceeds from the sale of, shares of Common Stock currently held by the Rollover Holders. For more information, see the amended Schedules 13D filed by Loeb Holding Corporation with the SEC on October 31, 2018 and November 6, 2018 and the amended Schedules 13D filed by Michael Stanfield with the SEC on October 31, 2018 and November 6, 2018.

(e)

Not applicable.

 

Item 6

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

The information regarding the Joint Filing Agreement set forth in Item 2 above, the information regarding the Notes set forth in Item 3 above and the information regarding the Merger Agreement, the Offer, the Merger, the Note Purchase Agreement, the Contribution and Assignment Agreements, the Tender and Support Agreements, the Registration Rights Agreement and the Binding Term Sheet set forth in Item 4 above is incorporated herein by reference in its entirety.

The Joint Filing Agreement, the Merger Agreement, the Note Purchase Agreement (which includes the Form of Note as an exhibit thereto), the Contribution and Assignment Agreements, the Tender and Support Agreements, the Registration Rights Agreement and the Binding Term Sheet are filed as Exhibits 1 through 13, respectively, to this Schedule 13D and are incorporated herein by reference.

Except for the foregoing, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Persons and any other person with respect to any securities of the Company, including, but not limited to, contracts, arrangements, understandings or relationships with respect to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

 

Page 15 of 18


CUSIP No. 460981301

  13D   Page 16 of 18 Pages

 

 

 

Item 7

Material to be Filed as Exhibits.

 

Exhibit

  

Description

1    Joint Filing Agreement, dated as of November 13, 2018, by and among the Reporting Persons.
2    Agreement and Plan of Merger, dated as of October 31, 2018, by and among Intersections Inc., WC SACD One Parent, Inc., and WC SACD One Merger Sub, Inc. (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Intersections Inc. with the Securities and Exchange Commission on November 6, 2018).
3    Note Purchase and Exchange Agreement, dated as of October 31, 2018, by and among Intersections Inc., WC SACD One Parent, Inc., Loeb Holding Corporation, and David A. McGough (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Intersections Inc. with the Securities and Exchange Commission on November 6, 2018).
4    Tender and Support Agreement, dated as of October 31, 2018, by and between WC SACD One Parent, Inc. and Loeb Holding Corporation (incorporated herein by reference to Exhibit 99.4 to Amendment No. 4 to the Schedule 13D filed by Loeb Holding Corporation on October 31, 2018).
5    Tender and Support Agreement, dated as of October 31, 2018, by and between WC SACD One Parent, Inc. and David A. McGough.
6    Tender and Support Agreement, dated as of October 31, 2018, by and between WC SACD One Parent, Inc. and Michael R. Stanfield (incorporated herein by reference to Exhibit 99.4 to Amendment No. 1 to the Schedule 13D filed by Michael R. Stanfield on October 31, 2018).
7    Tender and Support Agreement, dated as of October 31, 2018, by and between WC SACD One Parent, Inc. and Stanfield Family Investments LLC (incorporated herein by reference to Exhibit 99.5 to Amendment No. 1 to the Schedule 13D filed by Michael R. Stanfield on October 31, 2018).
8    Contribution and Assignment Agreement, dated as of October 31, 2018, by and between WC SACD One, Inc. and Loeb Holding Corporation (incorporated herein by reference to Exhibit 99.8 to the Schedule 13D filed by WndrCo Holdings, LLC on November 13, 2018).
9    Contribution and Assignment Agreement, dated as of October 31, 2018, by and between WC SACD One, Inc. and David A. McGough.
10    Contribution and Assignment Agreement, dated as of October 31, 2018, by and between WC SACD One, Inc. and Michael R. Stanfield (incorporated herein by reference to Exhibit 99.9 to the Schedule 13D filed by WndrCo Holdings, LLC on November 13, 2018).
11    Contribution and Assignment Agreement, dated as of October 31, 2018, by and between WC SACD One, Inc. and Stanfield Family Investments LLC (incorporated herein by reference to Exhibit 99.10 to the Schedule 13D filed by WndrCo Holdings, LLC on November 13, 2018).
12    Registration Rights Agreement, dated as of October 31, 2018, by and among Intersections Inc., WC SACD One Parent, Inc. and certain stockholders of Intersections Inc. (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Intersections Inc. with the Securities and Exchange Commission on November 6, 2018).
13    Binding Term Sheet, dated as of October 31, 2018, by and among, WC SACD One, Inc., WndrCo Holdings, LLC, General Catalyst Group IX, L.P., GC Entrepreneurs Fund IX, L.P., and iSubscribed Inc.
14    Power of Attorney of Kenneth I. Chenault regarding filings under the Act.
15    Power of Attorney of Joel E. Cutler, David P. Fialkow and Hemant Taneja regarding filings under the Act.

 

Page 16 of 18


CUSIP No. 460981301

  13D   Page 17 of 18 Pages

 

 

 

SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

 

Dated: November 13, 2018       GENERAL CATALYST GROUP IX, L.P.
     

By: GENERAL CATALYST PARTNERS IX, L.P.

its General Partner

     

BY: GENERAL CATALYST GP IX, LLC

its General Partner

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer
Dated: November 13, 2018       GC ENTREPRENEURS FUND IX, L.P.
     

By: GENERAL CATALYST PARTNERS IX, L.P.

its General Partner

     

BY: GENERAL CATALYST GP IX, LLC

its General Partner

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer
Dated: November 13, 2018       GENERAL CATALYST PARTNERS IX, L.P.
     

By: GENERAL CATALYST GP IX, LLC

its General Partner

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer
Dated: November 13, 2018       GENERAL CATALYST GP IX, LLC
     

By: GENERAL CATALYST GROUP MANAGEMENT, LLC

its Manager

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer


CUSIP No. 460981301

  13D   Page 18 of 18 Pages

 

 

 

Dated: November 13, 2018       GENERAL CATALYST GROUP MANAGEMENT, LLC
    By:  

*

      Name: Joel E. Cutler
      Title: Managing Director
    By:  

*

      Name: David P. Fialkow
      Title: Managing Director
    By:  

*

      Name: Hemant Taneja
      Title: Managing Director
Dated: November 13, 2018      

*

      Name: Kenneth I. Chenault
Dated: November 13, 2018      

*

      Name: Joel E. Cutler
Dated: November 13, 2018      

*

      Name: David P. Fialkow
Dated: November 13, 2018      

*

      Name: Hemant Taneja
    *By:  

/s/ Christopher McCain

      Name: Christopher McCain
      As attorney-in-fact
EX-99.1 2 d648681dex991.htm EX-99.1 EX-99.1

CUSIP No. 460981301

  13D  

 

EXHIBIT 1

JOINT FILING AGREEMENT

Pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, the undersigned hereby agree that only one statement containing the information required by Schedule 13D need be filed with respect to the ownership by each of the undersigned of shares of stock of Intersections Inc.

 

Dated: November 13, 2018       GENERAL CATALYST GROUP IX, L.P.
     

By: GENERAL CATALYST PARTNERS IX, L.P.

its General Partner

     

BY: GENERAL CATALYST GP IX, LLC

its General Partner

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer
Dated: November 13, 2018       GC ENTREPRENEURS FUND IX, L.P.
     

By: GENERAL CATALYST PARTNERS IX, L.P.

its General Partner

     

BY: GENERAL CATALYST GP IX, LLC

its General Partner

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer
Dated: November 13, 2018       GENERAL CATALYST PARTNERS IX, L.P.
     

By: GENERAL CATALYST GP IX, LLC

its General Partner

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer
Dated: November 13, 2018       GENERAL CATALYST GP IX, LLC
     

By: GENERAL CATALYST GROUP MANAGEMENT, LLC

its Manager

    By:  

/s/ Christopher McCain

      Name: Christopher McCain
      Title: Chief Legal Officer


CUSIP No. 460981301

  13D  

 

Dated: November 13, 2018       GENERAL CATALYST GROUP MANAGEMENT, LLC
    By:  

*

      Name: Joel E. Cutler
      Title: Managing Director
    By:  

*

      Name: David P. Fialkow
      Title: Managing Director
    By:  

*

      Name: Hemant Taneja
      Title: Managing Director
Dated: November 13, 2018      

*

      Name: Kenneth I. Chenault
Dated: November 13, 2018      

*

      Name: Joel E. Cutler
Dated: November 13, 2018      

*

      Name: David P. Fialkow
Dated: November 13, 2018      

*

      Name: Hemant Taneja
    *By:  

/s/ Christopher McCain

      Name: Christopher McCain
      As attorney-in-fact
EX-99.5 3 d648681dex995.htm EX-99.5 EX-99.5

Exhibit 5

TENDER AND SUPPORT AGREEMENT

This TENDER AND SUPPORT AGREEMENT, dated as of October 31, 2018 (this “Agreement”) is between WC SACD One Parent, Inc., a Delaware corporation (“Parent”) and the stockholder of Intersections, Inc., a Delaware corporation (the “Company”) listed on Schedule I hereto (“Stockholder”).

RECITALS

WHEREAS, Stockholder is the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of shares of common stock, par value $0.01, of the Company (“Shares”) set forth opposite Stockholder’s name on Schedule I hereto (the “Owned Shares”; the Owned Shares and any additional Shares and any other voting securities of the Company which Stockholder acquires record and/or beneficial ownership after the date hereof, including, without limitation, by purchase, as a result of a stock dividend, stock split, recapitalization, combination, reclassification, exchange or change of such shares, or upon exercise, vesting or conversion of any securities, Stockholder’s “Covered Shares”);

WHEREAS, Parent, WC SACD One Merger Sub, Inc, a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”) and the Company have entered into that certain Agreement and Plan of Merger, dated as of the date hereof (as the same may be amended from time to time, the “Merger Agreement”), which provides, among other things, on the terms and subject to the conditions set forth therein, for Merger Sub to commence a tender offer to purchase any and all of the outstanding Shares pursuant to the terms of the Offer as set forth in the Merger Agreement and for the merger of Merger Sub with and into the Company (the “Merger”) as soon as practicable following the consummation (as defined in Section 251(h) of the DGCL) of the Offer, with the Company continuing as the surviving corporation in the Merger;

WHEREAS, the Company and certain investors (including Parent and Stockholder) (the “Investors”) have entered into that certain Note Purchase and Exchange Agreement, dated as of the date hereof (as the same may be amended from time to time, the “NPA”) which provides, among other things, on the terms and subject to the conditions set forth therein, for the issuance and sale to Parent of senior secured convertible notes of the Company (the “Notes”) in an aggregate principal amount of $30,000,000 and the exchange by Stockholder of certain unsecured convertible notes previously issued by the Company for $1,000,000 in aggregate principal amount of Notes;

WHEREAS, in order to induce Parent and Merger Sub to enter into the Merger Agreement and Parent to enter into the NPA, and to consummate the transactions contemplated thereby, including the Merger and the issuance of the Notes, Parent and Stockholder are entering into this Agreement; and


WHEREAS, Stockholder is entering into that certain Contribution and Assignment Agreement with WC SACD One, Inc., a Delaware corporation and the direct parent of Parent (“Holdings”), as of the date hereof (the “Contribution Agreement”), concurrently herewith, pursuant to which Stockholder is agreeing, on the terms set forth therein, to contribute to Holdings certain of its Covered Shares (the “Rollover Shares”). Capitalized terms used herein without definition have the meanings set forth in the Merger Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, Parent and Stockholder hereby agree as follows:

1. Agreement to Tender the Tender Shares.

(a) Subject to the terms hereof, Stockholder agrees to promptly (and, in any event, not later than five (5) Business Days after the commencement of the Offer) (i) validly tender or cause to be validly tendered into the Offer, pursuant to and in accordance with the terms of the Offer, such number of Covered Shares set forth opposite Stockholder’s name in Schedule I hereto under the heading “Tender Shares” (the “Tender Shares”) (free and clear of any Liens), (ii) deliver all other documents or instruments required to be delivered by Stockholder pursuant to the terms of the Offer, and (iii) if Stockholder acquires beneficial ownership of any additional outstanding Shares during the term of this Agreement (excluding, for the avoidance, of doubt any additional Shares deemed to be the Rollover Shares pursuant to the terms of the Contribution Agreement), to promptly (after the commencement of the Offer and, in any event, not later than the earlier of (x) three (3) Business Days after Stockholder acquires beneficial ownership of such Shares and (y) the Termination Date) validly tender or cause to be validly tendered into the Offer, pursuant to and in accordance with the terms of the Offer, all of such additional Shares.

(b) Stockholder agrees not to withdraw, and not to cause or permit to be withdrawn, any Tender Shares from the Offer prior to the Termination Date.

(c) Stockholder acknowledges and agrees that Merger Sub’s obligation to accept for payment Shares tendered into the Offer, including any Tender Shares tendered by Stockholder, is subject to the terms and conditions of the Merger Agreement and the Offer.

(d) If the Merger Agreement is terminated prior to the Effective Time, Parent and Merger Sub shall, or shall cause any depository or other party acting on behalf of Parent and Merger Sub to, promptly return to Stockholder all Shares tendered by Stockholder in the Offer and shall take all such actions as are necessary to restore Stockholder to the position it was in with respect to ownership of the Shares prior to its tender of such Shares.

2. Agreement Not to Tender the Rollover Shares. Stockholder hereby agrees (a) not to tender or cause to be tendered into the Offer any of such Stockholder’s Rollover Shares, and (b) if from time to time any such Rollover Shares are tendered into the Offer, promptly to withdraw or cause to be withdrawn such Rollover Shares from the Offer.

 

2


3. Vote. From the date hereof until the Termination Date (as defined herein), Stockholder irrevocably and unconditionally agrees that it shall at any duly called meeting of the stockholders of the Company (whether annual or special and whether or not an adjourned or postponed meeting), however called, or in connection with any written consent of stockholders of the Company:

(a) when a meeting is held, appear at such meeting in person or by proxy or otherwise cause the Covered Shares to be counted as present thereat for the purpose of establishing a quorum, and respond to each request by the Company for written consent, if any; and

(b) vote (or consent), or cause to be voted at such meeting (or validly execute and return and cause such consent to be granted with respect to), all Covered Shares (to the fullest extent that the Covered Shares are entitled to vote thereon or consent thereto):

(i) in favor of the Merger, the adoption of the Merger Agreement and any other matters relating to and/or necessary for consummation of the Merger and the other transactions contemplated in the Merger Agreement;

(ii) in favor of any proposal to adjourn or postpone the meeting to a later date if a quorum is not present or if there are not sufficient votes for the adoption of the Merger Agreement;

(iii) against (A) any action, proposal, agreement or transaction made in opposition to or competition with the Merger or the Merger Agreement, (B) any proposal for any recapitalization, material business transaction, reorganization, liquidation, winding up of the Company, dissolution, amalgamation, consolidation, merger, sale of assets or other business combination between the Company and any other Person, or any other action or transactions involving the Company (other than the Merger), (C) any other action that would or could reasonably be expected to impede, frustrate, interfere with, delay, postpone or adversely affect the timely consummation of the Merger or any of the transactions contemplated by the Merger Agreement or this Agreement (including the performance by Stockholder of its obligations under this Agreement) or any transaction that results in or could reasonably be expected to result in a breach of any covenant, representation or warranty or other obligation or agreement of the Company or any of its Subsidiaries under the Merger Agreement, (D) any change in the board of directors of the Company (other than as contemplated by the Merger), (E) any change in the present capitalization or dividend policy of the Company (including without limitation any extraordinary dividend or distribution by the Company) or any amendment or other change to the Company’s articles of incorporation or bylaws, except if approved by Parent and (F) any other change in the Company’s corporate structure or business; and

(iv) in favor of any proposal to (A) permit the conversion of all the Notes, and any preferred stock of the Company into which the Notes are otherwise convertible, into shares of common stock of the Company, (B) increase the number of shares of common stock and preferred stock authorized pursuant to the Company’s Certificate of Incorporation, as amended, to permit the conversion of the Notes pursuant to clause (A) above and pursuant to Section 5.7 of the NPA, and (C) permit the exercise of certain preemptive rights in favor of the Investors pursuant to Section 5.3 of the NPA.

 

3


4. Grant of Irrevocable Proxy; Appointment of Proxy.

(a) STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, PARENT, THE EXECUTIVE OFFICERS OF PARENT, AND ANY OTHER DESIGNEE OF PARENT, EACH OF THEM INDIVIDUALLY, STOCKHOLDER’S IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE COVERED SHARES AS INDICATED IN SECTION 3. STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION OR EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY STOCKHOLDER WITH RESPECT TO THE COVERED SHARES (STOCKHOLDER REPRESENTING TO THE COMPANY THAT ANY SUCH PROXY IS NOT IRREVOCABLE). TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL AUTHORITY HEREIN CONFERRED SHALL SURVIVE THE DEATH OR INCAPACITY OF STOCKHOLDER AND SHALL BE BINDING UPON THE HEIRS, ESTATE, ADMINISTRATORS, PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS OF STOCKHOLDER.

(b) The proxy granted in this Section 4 shall automatically expire and be deemed automatically revoked upon the Termination Date.

5. No Inconsistent Agreements. Stockholder hereby represents, covenants and agrees that, except as contemplated by this Agreement, Stockholder (a) has not entered into, and shall not enter into at any time prior to the Termination Date, any tender or voting agreement or voting trust with respect to any Covered Shares, and (b) has not granted, and shall not grant at any time prior to the Termination Date, a proxy or power of attorney with respect to any Covered Shares.

6. Termination. This Agreement shall terminate upon the earliest of (a) the Effective Time, (b) the termination of the Merger Agreement in accordance with its terms, and (c) written notice of termination of this Agreement by Parent to Stockholder (such earliest date being referred to herein as the “Termination Date”); provided, that the provisions set forth in Sections 14 through 28 shall survive the termination of this Agreement; and provided, further, that any liability incurred by any party hereto as a result of a breach of a term or condition of this Agreement prior to such termination shall survive the termination of this Agreement.

7. Representations and Warranties of Stockholder. Stockholder hereby represents and warrants to Parent as follows:

(a) Stockholder is the record and beneficial owner of, and has good and valid title to, the Covered Shares, free and clear of all Liens other than as created by this Agreement. Stockholder has sole voting power, sole power of disposition, sole power to demand appraisal rights and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Covered Shares, with no limitations, qualifications or restrictions on such rights, subject to applicable federal securities laws and the terms of this Agreement.

 

4


(b) As of the date hereof, other than the Owned Shares and the Equity Awards identified on Schedule I hereto, Stockholder does not own beneficially or of record any (i) shares of capital stock or voting securities of the Company, (ii) securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, or (iii) options or other rights to acquire from the Company any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of the Company.

(c) Other than as provided for in this Agreement and the Contribution Agreement with respect to the Rollover Shares, the Covered Shares are not subject to any voting trust agreement or other Contract to which Stockholder is a party restricting or otherwise relating to the voting or Transfer (as defined below) of the Covered Shares. Stockholder has not appointed or granted any proxy or power of attorney that is still in effect with respect to any Covered Shares, except as contemplated by this Agreement.

(d) Stockholder has full legal power and capacity to execute and deliver this Agreement and to perform Stockholder’s obligations hereunder.

(e) This Agreement has been duly and validly executed and delivered by Stockholder and, assuming due authorization, execution and delivery by Parent, constitutes a legal, valid and binding obligation of Stockholder, enforceable against Stockholder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). If Stockholder is married, and any of the Covered Shares of Stockholder constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by Stockholder’s spouse and, assuming due authorization, execution and delivery by Parent, constitutes a legal, valid and binding obligation of Stockholder’s spouse, enforceable against Stockholder’s spouse in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

(f) Neither the execution, delivery or performance of this Agreement by Stockholder nor the consummation by Stockholder of the transactions contemplated hereby nor compliance by Stockholder with any of the provisions hereof shall (i) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on such property or asset of Stockholder pursuant to, any Contract to which Stockholder is a party or by which Stockholder or any property or asset of Stockholder is bound or affected or (ii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Stockholder or any of Stockholder’s properties or assets.

 

5


(g) As of the date hereof, there is no action, suit, investigation, complaint or other proceeding pending against any Stockholder or, to the knowledge of Stockholder, any other Person or, to the knowledge of Stockholder, threatened against Stockholder or any other Person that restricts or prohibits (or, if successful, would restrict or prohibit) the exercise by Parent of its rights under this Agreement or the performance by any party (including Stockholder) of its obligations under this Agreement.

(h) Stockholder understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement and Parent is entering into the NPA in reliance upon Stockholder’s execution and delivery of this Agreement and the accuracy of the representations and warranties of Stockholder contained herein.

8. Certain Covenants of Stockholder.

(a) Subject to Section 9 hereof, Stockholder, for itself and its Affiliates (other than the Company), hereby covenants and agrees to be bound by Section 6.2 of the Merger Agreement as if Stockholder were a party thereto and subject to the covenants contained therein. Stockholder acknowledges that Stockholder has received and reviewed copies of the Merger Agreement, the NPA and each agreement ancillary thereto.

(b) Prior to the Termination Date, and except as expressly provided herein or as contemplated by the Contribution Agreement, Stockholder shall not (i) tender into any tender or exchange offer other than the Offer, (ii) sell, transfer, pledge, hypothecate, distribute, grant, gift, encumber, assign or otherwise dispose of (including by merger or operation of law and whether constructively or otherwise, record or beneficial ownership or both) (collectively “Transfer”), or enter into any contract, option, agreement or other arrangement or understanding with respect to the Transfer of any of the Covered Shares or beneficial ownership or voting power thereof or therein (including by operation of law), (iii) enter into any short sale with respect to the Covered Shares or substantially identical property or enter into or acquire an offsetting derivative contract with respect to the Covered Shares or substantially identical property, (iv) transfer any of the economic interest in the Covered Shares or enter into any transaction that has such effect, (v) grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting agreement with respect to any Covered Shares, or (vi) knowingly take any action that would make any representation or warranty of Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling Stockholder from performing its obligations under this Agreement. Notwithstanding anything to the contrary in this Section 8(b) or otherwise in this Agreement, Stockholder may Transfer all or a portion its Covered Shares to an affiliate controlled by Stockholder (any such affiliate being a “Permitted Transferee”); provided, however, that a Transfer referred to in this Section 8(b) shall be permitted only if, as a precondition and prior to any such Transfer, (x) the Stockholder confirms in writing to Parent that (1) the proposed transferee is a Permitted Transferee, (2) Stockholder has sole control over such Permitted Transferee and will have sole voting and dispositive control over any Covered Shares held by such Permitted Transferee, and (3) Stockholder covenants and

 

6


agrees that through the Closing it shall continue to have sole control over such Permitted Transferee; (y) the Stockholder obtains the prior written consent of Parent to such Transfer (which consent shall not be unreasonably withheld, conditioned or delayed), and (z) the Permitted Transferee (1) shall have executed and delivered to Parent a counterpart of this Agreement pursuant to which such Permitted Transferee shall be bound by all of the terms and provisions of this Agreement, and shall have agreed in writing with Parent to hold such Covered Shares or interest in such Covered Shares subject to all of the terms and provisions of this Agreement, and, if any Covered Shares to be Transferred to such Permitted Transferee are Rollover Shares, shall have executed and delivered to Holdings a counterpart of the Contribution Agreement pursuant to which such Permitted Transferee shall be bound by all of the terms and provisions of the Contribution Agreement, and shall have agreed in writing with Holdings to hold such Rollover Shares or interest in such Rollover Shares subject to all of the terms and provisions of the Contribution Agreement, (2) represents and warrants in writing to Parent and Holdings, as applicable, that there is no action, suit, investigation, complaint or other proceeding pending against such Permitted Transferee or, to the knowledge of such Permitted Transferee, threatened against such Permitted Transferee that restricts or prohibits (or, if successful, would restrict or prohibit) the exercise by Parent of its rights under this Agreement (and in additionally in the case of any proposed Transfer to the Permitted Transferee of Rollover Shares, that restricts or prohibits (or, if successful would restrict or prohibit) the exercise by Holdings of its rights under the Contribution Agreement) or the performance by the Permitted Transferee or Parent of its obligations under this Agreement (and in the case of any proposed Transfer to the Permitted Transferee of Rollover Shares, the performance by the Permitted Transferee or Holdings of its obligations under the Contribution Agreement), (3) represents and warrants in writing to Parent that each of the representations and warranties set forth in Sections 7(a), (c), (d), (e), (f) and (h) are true and correct with respect to such Permitted Transferee (treating all references therein to “Stockholder” to refer to the “Permitted Transferee”), and (4) in the case of a proposed Transfer to the Permitted Transferee of Rollover Shares, represents and warrants in writing to Holdings that each of the representations and warranting set forth in Section 6 of the Contribution Agreement are true and correct with respect to such Permitted Transferee (treating all references therein to “Transferor” to refer to the “Permitted Transferee”).

(c) Any Transfer in violation of Section 8(b) shall be void. Stockholder further agrees to authorize and request the Company to notify the Company’s transfer agent that there is a stop transfer order with respect to all of the Covered Shares and that this Agreement places limits on the voting of the Covered Shares. If so requested by Parent, Stockholder agrees that the certificates representing Covered Shares shall bear a legend stating that they are subject to this Agreement and to the irrevocable proxy granted in Section 4(a).

(d) Prior to the Termination Date, in the event that Stockholder acquires record or beneficial ownership of, or the power to vote or direct the voting of, any additional Shares or other voting interests with respect to the Company, such Shares or voting interests shall, without further action of the parties, be deemed Covered Shares and subject to the provisions of this Agreement, and the number of Covered Shares and Tender Shares held by such Stockholder set forth on Schedule I hereto will be deemed amended to include any such additional Shares accordingly (provided that the number of Tender Shares shall not include any additional Shares that are deemed to be Rollover Shares) and such Shares or voting interests shall automatically become Covered Shares and Tender Shares (provided that the number of Tender Shares shall not include any additional Shares that are deemed to be Rollover Shares) subject to the terms of this Agreement. Stockholder shall promptly notify Parent and the Company of any such event.

 

7


(e) Prior to the Termination Date, Stockholder agrees that it will not bring, commence, institute, maintain, prosecute, join or voluntarily aid any Action in law or in equity, in any court or before any Governmental Entity, which alleges that the execution and delivery of the Merger Agreement or the NPA by the Company, or the approval of the Merger Agreement or the NPA by the Company Board, breaches any fiduciary duty of the Company Board or any member thereof or which otherwise challenges the Merger Agreement or the NPA.

9. Stockholder Capacity. This Agreement is being entered into by Stockholder solely in its capacity as a stockholder of the Company, and nothing in this Agreement shall (i) restrict or limit the ability of Stockholder, as an Investor, to take any action in its capacity as an Investor to the extent specifically permitted by the NPA or (ii) restrict or limit the ability of any person who is a director, officer, agent or other authorized representative (including an executor) of Stockholder and is also a director or officer of the Company to take any action in his or her capacity as a director or officer of the Company to the extent specifically permitted by the Merger Agreement (it being understood that nothing in this Agreement will be construed to prohibit, limit or restrict any person described in clause (ii) of this paragraph from exercising his or her fiduciary duties as a director or officer of the Company).

10. Waiver of Appraisal Rights. Stockholder hereby waives any rights of appraisal or rights to dissent from the Merger that Stockholder may have under Section 262 of the DGCL or otherwise under any applicable Law.

11. Disclosure. Stockholder hereby (a) consents to and authorizes the publication and disclosure by Holdings, Parent, Merger Sub and the Company (including in the Offer Documents, the Schedule 14D-9 or any other publicly filed document relating to the Offer, the Merger, the Notes or the transactions contemplated by the Merger Agreement or the NPA) of (i) Stockholder’s identity, (ii) Stockholder’s beneficial ownership of Shares or Equity Awards (including the number of such Shares or Equity Awards beneficially owned by Stockholder), and (iii) the nature of Stockholder’s commitments, arrangements and understandings under this Agreement, and any other information that Holdings, Parent, Merger Sub or the Company reasonably determines to be required in any publicly filed document in connection with the Offer, the Merger, the Notes or otherwise with respect to the transactions contemplated by the Merger Agreement or the NPA (provided that Parent will provide, or cause to be provided, to Stockholder a draft of any document containing such disclosure a reasonable time prior to the publication, disclosure or filing thereof), and (b) agrees as promptly as practicable to notify Holdings, Parent, Merger Sub and the Company of any required corrections with respect to any written information supplied by Stockholder specifically for use in any such disclosure document. During the term of this Agreement, Stockholder agrees that it will consult with Parent before issuing any press releases or otherwise making any public statements with respect

 

8


to the transactions contemplated herein, except as may be required in connection with the Offer in any Form 4, Schedule 13D, Schedule 13G (including any amendments to the foregoing forms and schedules) or other disclosure required by the SEC or other Governmental Entity to be made by Stockholder in connection with the Offer, provided that to the extent permissible, Stockholder shall deliver to Parent a copy of each such Form 4, Schedule 13D, Schedule 13G (including any amendments to the foregoing forms and schedules) or other disclosure so required prior to filing the same.

12. Further Assurances. From time to time during the term of this Agreement, at the request of Parent, Stockholder shall take such further action as may reasonably be deemed by Parent to be necessary or desirable to consummate and make effective the transactions contemplated by this Agreement.

13. Non-Survival of Representations and Warranties. The representations and warranties of Stockholder contained herein shall not survive the closing of the transactions contemplated hereby and by the Merger Agreement.

14. Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by a writing specifically designated as an amendment hereto, signed on behalf of each of the parties in interest at the time of the amendment.

15. Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or e mail, upon written confirmation of receipt by facsimile, e mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered (i) if to Stockholder, to the address set forth on Schedule I hereto, or to such other address as Stockholder shall have furnished to the Company in writing, and (ii) if to Parent, to WC SACD One Parent, Inc., c/o iSubscribed Inc., 15 Network Drive, Burlington, MA 01803, Attention: Hari Ravichandran (with a copy to Gibson, Dunn & Crutcher LLP, 2029 Century Park East, Suite 4000, Los Angeles, California 90067, Attention: Ari B. Lanin, Esq., Facsimile No.: (310) 552-7046), or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

16. Interpretation. When a reference is made in this Agreement to a Section or Schedule such reference shall be to a Section or Schedule of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement or in any Schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to the Agreement as a whole and not to any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” References to days mean calendar days unless otherwise specified.

 

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17. Entire Agreement. This Agreement (including the schedules hereto), together with the Merger Agreement, the NPA and the Contribution Agreement, constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the parties with respect to the subject matter hereof and thereof.

18. No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties hereto and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement, except Holdings shall be deemed a third party beneficiary of Section 8(b) of this Agreement.

19. Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.

20. Submission to Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

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21. Assignment; Successors. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any party without the prior written consent of the other party, which consent in the case of a proposed assignment by: (a) Stockholder to a proposed Permitted Transferee shall not be unreasonably withheld, conditioned or delayed by Parent provided the conditions to Transfer to such Permitted Transferee in Section 8(b) are satisfied or (b) Parent to an Affiliate shall not be unreasonably withheld, conditioned or delayed by Stockholder. In the event Parent assigns any or all of its rights, interests and obligations under this Agreement to an Affiliate as permitted by this Section 21, all references herein to Parent shall be deemed references to such other Affiliate, except that all representations and warranties made herein with respect to Parent as of the date of this Agreement shall be deemed to be representations and warranties made with respect to such other Affiliate as of the date of such assignment. Any such assignment not in conformity with the terms of this Section 21 shall be null and void.

22. Specific Performance. The parties agree that irreparable damage would occur in the event that the parties hereto do not perform the provisions of this Agreement in accordance with its terms or otherwise breach such provisions. Accordingly, prior to any termination of this Agreement, the parties acknowledge and agree that each party shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then in any federal court located in the State of Delaware or any other Delaware state court, this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (ii) any requirement under any law to post security as a prerequisite to obtaining equitable relief.

23. Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

24. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

25. Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.

 

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26. Facsimile or .pdf Signature. This Agreement may be executed by facsimile or .pdf signature and a facsimile or .pdf signature shall constitute an original for all purposes.

27. No Presumption Against Drafting Party. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto

28. No Ownership Interest in Covered Shares. Except as otherwise provided herein or in the Contribution Agreement, nothing contained in this Agreement shall be deemed to vest in Parent any direct or indirect ownership or incidence of ownership of or with respect to any Covered Shares. All rights, ownership and economic benefits of and relating to the Covered Shares shall remain vested in and belong to Stockholder, and Parent shall not have any authority to direct Stockholder in the voting or disposition of any of the Covered Shares, except as expressly provided herein.

The remainder of this page is intentionally left blank.

 

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IN WITNESS WHEREOF, Parent and Stockholder have caused to be executed or executed this Agreement as of the date first written above.

 

WC SACD ONE PARENT, INC.,
By:  

/s/ Hari Ravichandran

Name:   Hari Ravichandran
Title:   Chief Executive Officer

 

Signature page to Tender and Support Agreement


STOCKHOLDER

/s/ David A. McGough

(Signature)

David A. McGough

(Individual Name)

 

Signature page to Tender and Support Agreement


AGREEMENT OF SPOUSE

I, Thuy McGough, spouse of David A. McGough, acknowledge that I have read the Tender and Support Agreement, dated October 29, 2018 (the “Support Agreement”), by and among my spouse and WC SACD One Parent, Inc., a Delaware corporation (“Parent”), I am aware that by the provisions of the Support Agreement, my spouse has agreed to take or refrain from taking, as the case may be, certain actions with respect to my spouse’s Covered Shares (as defined in the Support Agreement), which such Covered Shares I may have a community property or other interest in. I hereby consent to and approve in all respects the Support Agreement and all of the transactions and agreements contemplated thereby, including without limitation the grant of the irrevocable proxy provided for therein to Parent, its executive officers and any other designee of Parent, and hereby agree to be bound by the terms and conditions of the Stockholder Agreement as if a Stockholder party thereto.

 

/s/ Thuy McGough

Name: Thuy McGough


SCHEDULE I

 

Stockholder

  

Address

   Owned Shares      Equity Awards    Covered Shares      Tender Shares  
David A. McGough   

 

     1,156,8171      RSUs: 31,250      1,196,8171        388,067  
  

 

      Options: 8,750      
  

 

           
  

 

           
   with a copy to:            
  

 

           
  

 

           
  

 

           
  

 

           
  

 

           

 

1 

Assumes conversion of Note held by Stockholder into 440,529 Shares prior to the effective time of Stockholder’s contribution of the Rollover Shares to Holdings pursuant to the Contribution Agreement.

EX-99.9 4 d648681dex999.htm EX-99.9 EX-99.9

Exhibit 9

CONTRIBUTION AND ASSIGNMENT AGREEMENT

THIS CONTRIBUTION AND ASSIGNMENT AGREEMENT (this “Agreement”) is made as of October 31, 2018, by and between WC SACD One, Inc., a Delaware corporation (“Holdings”), and the Person set forth on Schedule I attached hereto (“Transferor”).

RECITALS

WHEREAS, WC SACD One Parent, Inc., a Delaware corporation and direct subsidiary of Holdings (“Parent”), WC SACD One Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and Intersections, Inc., a Delaware corporation (the “Company”), have entered into that certain Agreement and Plan of Merger, dated as of October 31, 2018 (as the same may be amended from time to time, the “Merger Agreement”) pursuant to which, on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation (the “Merger”);

WHEREAS, the Company and certain investors (including Parent) have entered into that certain Note Purchase and Exchange Agreement, dated as of the date hereof (as the same may be amended from time to time, the “NPA”) which provides, among other things for the issuance and sale to Parent of senior secured convertible notes in an aggregate principal amount of $30,000,000 (the “Notes”) and the exchange by Transferor of certain unsecured convertible notes previously issued by the Company for $1,000,000 in aggregate principal amount of Notes;

WHEREAS, Transferor is the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of the shares of common stock, par value $0.01, of the Company (the “Common Stock”) set forth opposite Transferor’s name on Schedule I (the “Rollover Shares”);

WHEREAS, in order to induce Parent and Merger Sub to enter into the Merger Agreement and the NPA, and consummate the transactions contemplated thereby, including the Merger and the issuance of the Notes, Transferor desires to contribute Transferor’s Rollover Shares to Holdings, on the terms set forth herein, in exchange for shares of Holdings (“Holdings Shares”) in an amount set forth on Schedule I hereto and having terms consistent with those set forth in Exhibit A hereto (the “Rollover Terms”); and

WHEREAS, Transferor has entered into that certain Tender and Support Agreement with Parent as of the date hereof (the “Support Agreement”) and concurrently herewith. Except as otherwise set forth herein, capitalized terms used herein without definition have the meanings set forth in the Merger Agreement.


AGREEMENT

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, Holdings and Transferor hereby agree as follows:

1. Contribution of Rollover Shares. Subject to the conditions set forth herein, immediately after the Offer is consummated and without further action by the Transferor, Transferor shall contribute and assign to Holdings all of Transferor’s right, title and interest in the Rollover Shares set forth opposite Transferor’s name and designated as Rollover Shares on Schedule I attached hereto, free and clear of all Liens (other than any restrictions under the Securities Act). Transferor shall deliver any certificates representing the Rollover Shares to Holdings along with appropriate endorsements in blank or other duly executed instruments of transfer.

2. Receipt of Holdings Shares. Transferor and Holdings hereby agree that, concurrently with the effective time of Transferor’s contribution of the Rollover Shares to Holdings, Transferor shall receive validly issued, fully paid and non-assessable Holdings Shares (in the amount set forth on Schedule I hereto and having terms consistent with the Rollover Terms) in respect of Transferor’s Rollover Shares. In furtherance of the foregoing, Transferor and Holdings agree to (a) negotiate in good faith a definitive stockholders agreement with terms consistent in all material respects with the Rollover Terms and work in good faith to finalize the form of such stockholders agreement (such stockholders agreement, the “Stockholders Agreement”) not later than the date (the “Target Completion Date”) that is the earlier of: (i) the consummation of the Offer and (ii) any meeting of the stockholders of the Company at which such stockholders are asked to vote on the approval of the Merger Agreement, as contemplated by Section 3(b)(i) of the Support Agreement, (b) negotiate in good faith a definitive amended and restated certificate of incorporation of Holdings and bylaws of Holdings, each with terms consistent in all material respects with the Rollover Terms (such amended and restated certificate of incorporation and bylaws of Holdings, the “Governing Documents”) and work in good faith to finalize the Governing Documents not later than the Target Completion Date, (c) execute and deliver the Stockholders Agreement and approve the Governing Documents not later than concurrently with the Contribution Closing, (d) in the case of Holdings, file (or cause to be filed) with the Secretary of State of the State of Delaware the amended and restated certificate of incorporation of Holdings included in the Governing Documents, not later than concurrently with the Contribution Closing and (e) execute and deliver a definitive subscription agreement in a form customary for the type of transaction contemplated hereby, immediately prior to the Contribution Closing. Transferor hereby acknowledges and agrees that delivery of the Holdings Shares to Transferor shall constitute complete satisfaction of all obligations towards or sums owed to Transferor by Merger Sub and Holdings with respect to the Rollover Shares.

3. Closing. Subject to the satisfaction in full (or waiver) of all of the Offer Conditions and the conditions set forth in Article VII of the Merger Agreement (other than conditions that by their nature are to be satisfied at the Closing), as determined in the reasonable discretion of Parent (after consultation in good faith with Transferor of any waiver by Parent of such unsatisfied condition), the closing of the contribution and exchange contemplated hereby (the “Contribution Closing”) shall take place within 48 hours prior to the Closing.

 

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4. Deposit of Rollover Shares. Not later than three (3) Business Days prior to the consummation of the Offer, Transferor and any agent of the Transferor holding certificates evidencing any Rollover Shares (including without limitation, any broker holding securities in “street name”) shall deliver or cause to be delivered to Holdings all certificates representing Rollover Shares in such Persons’ possession, (a) duly endorsed for transfer or (b) with executed stock powers, both reasonably acceptable in form to Holdings and sufficient to transfer such shares to Holdings, for disposition in accordance with the terms of this Agreement, or if any of the Rollover Shares are uncertificated, then Transferor shall deliver or cause to be delivered to Holdings instructions addressed to the Company or the Company’s transfer agent, as applicable, providing for the transfer of such Rollover Shares as set forth in this Agreement (the “Share Documents”). The Share Documents shall be held in escrow by Holdings or any agent authorized by Holdings until the Contribution Closing.

5. Irrevocable Election.

5.1. The execution of this Agreement by the Transferor evidences, subject to Section 7 hereof, the irrevocable election and agreement by Transferor to contribute Transferor’s Rollover Shares in exchange for Holdings Shares at the Contribution Closing on the terms and conditions (including the Rollover Terms) set forth herein. In furtherance of the foregoing, the Transferor covenants and agrees that from the date hereof until any termination of this Agreement pursuant to Section 7 hereof, Transferor shall not, directly or indirectly knowingly take any action that would make any representation or warranty of Transferor set forth in this Agreement untrue or incorrect or have the effect of preventing, disabling, or delaying Transferor from performing any of Transferor’s obligations under this Agreement. Transferor acknowledges and agrees that, as of the date hereof, the Support Agreement remains in full force and effect.

5.2. Transferor covenants and agrees that it shall promptly (and in any event within 24 hours) notify Holdings of any new shares of Common Stock issued in respect of the Rollover Shares with respect to which beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) is acquired by Transferor as a result of a stock dividend, stock split, recapitalization, combination, reclassification, or exchange or change of such shares, if any, after the date hereof. Any such shares of Common Stock issued in respect of the Rollover Shares shall automatically become subject to the terms of this Agreement and be deemed Rollover Shares hereunder, and Schedule I shall be deemed amended accordingly.

6. Representations and Warranties of the Transferor. To induce Holdings to accept the Rollover Shares and Holdings to issue the Holdings Shares pursuant to the terms of this Agreement, including the Rollover Terms, Transferor makes the following representations and warranties to Holdings, each and all of which shall be true and correct as of the date of this Agreement and as of the Contribution Closing, and shall survive the execution and delivery of this Agreement:

6.1. Ownership of Shares. As of the Contribution Closing, Transferor (i) will be the beneficial owner of, and have good and valid title to, the Rollover Shares, free and clear of Liens other than as created by this Agreement and the Support Agreement; (ii) will have sole voting power, sole power of disposition, and sole power to demand dissenter’s rights (if

 

3


applicable), in each case with respect to all of the Rollover Shares, with no limitations, qualifications, or restrictions on such rights, subject to applicable United States federal securities laws, laws of the State of Delaware and the terms of this Agreement and the Support Agreement; and (iii) will not be subject to any voting trust agreement or other Contract to which the Transferor is a party restricting or otherwise relating to the voting or transfer of the Rollover Shares other than this Agreement and the Support Agreement. As of the date hereof, other than the Rollover Shares and the Notes, the Transferor does not own, beneficially or of record, any securities of the Company, or any direct or indirect interest in any such securities (including by way of derivative securities) other than those set forth on Schedule I under the heading “Other Shares”. The Transferor has not appointed or granted any proxy or power of attorney that will be in effect as of the Contribution Closing with respect to any Rollover Shares, except as contemplated by this Agreement or the Support Agreement.

6.2. Organization, Standing and Authority. Transferor has full legal power and capacity to execute and deliver this Agreement and to perform Transferor’s obligations hereunder. This Agreement has been duly and validly executed and delivered by Transferor and, assuming due authorization, execution and delivery by Holdings, constitutes a legal, valid and binding obligation of Transferor, enforceable against Transferor in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). If Transferor is married, and any of the Rollover Shares of Transferor constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by Transferor’s spouse and, assuming due authorization, execution and delivery by Holdings, constitutes a legal, valid and binding obligation of Transferor’s spouse, enforceable against Transferor’s spouse in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).

6.3. Consents and Approvals; No Violations. Except for the applicable requirements of the Exchange Act or as contemplated by the Merger Agreement, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Entity is necessary on the part of Transferor for the execution, delivery and performance of this Agreement by Transferor or the consummation by Transferor of the transactions contemplated hereby and (ii) neither the execution, delivery or performance of this Agreement by Transferor nor the consummation by Transferor of the transactions contemplated hereby, nor compliance by Transferor with any of the provisions hereof shall (A) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on property or assets of Transferor pursuant to any Contract to which Transferor is a party or by which Transferor or any property or asset of Transferor is bound or affected, or (B) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Transferor or any of Transferor’s properties or assets.

 

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6.4. Litigation. As of the date hereof, there is no action, suit, investigation, complaint or other proceeding pending against Transferor or, to the knowledge of Transferor, any other Person or, to the knowledge of Transferor, threatened against Transferor or any other Person that restricts or prohibits (or, if successful, would restrict or prohibit) the performance by Transferor of its obligations under this Agreement.

6.5. Reliance. Transferor understands and acknowledges that Parent, Merger Sub and the Company are entering into the Merger Agreement in reliance upon Transferor’s execution and delivery of this Agreement and the representations and warranties of Transferor contained herein.

6.6. Receipt of Information. Transferor has been afforded the opportunity to ask such questions as Transferor has deemed necessary of, and to receive answers from, representatives of Holdings concerning the terms and conditions of the transactions contemplated hereby and the merits and risks of owning the Holdings Shares. Transferor acknowledges that it has been advised to discuss with its own counsel the meaning and legal consequences of Transferor’s representations and warranties in this Agreement and the transactions contemplated hereby. Transferor has not relied on Holdings, Parent or Merger Sub, or their officers, directors or professional advisors, for advice as to such consequences (including with respect to taxes).

7. Termination. This Agreement, and the obligation of Transferor to contribute, transfer, assign and deliver the Rollover Shares, will terminate immediately upon the valid termination of the Merger Agreement in accordance with Article VIII thereof or the withdrawal of the Offer; provided, however, that the parties shall continue to have liability for breaches of this Agreement occurring prior to the termination of this Agreement. If for any reason the Merger Agreement is terminated but the Contribution Closing has already taken place, then Holdings shall promptly return the Share Documents to Transferor at Transferor’s address set forth on the signature page to the Subscription Agreement and take all such actions as are necessary to restore Transferor to the position it was in with respect to ownership of the Rollover Shares prior to the Contribution Closing, following which this Agreement will terminate.

8. Disclosure. Transferor hereby (a) consents to and authorizes the publication and disclosure by Holdings, Parent, Merger Sub and the Company (including in the Offer Documents, the Schedule 14D-9 or any other publicly filed document relating to the Offer, the Merger, the Notes or the transactions contemplated by the Merger Agreement or the NPA) of (i) Transferor’s identity, (ii) Transferor’s beneficial ownership of Rollover Shares (including the number of such Rollover Shares beneficially owned by Transferor), and (iii) the nature of Transferor’s commitments, arrangements and understandings under this Agreement, and any other information that Holdings, Parent, Merger Sub or the Company reasonably determines to be required in any publicly filed document in connection with the Offer, the Merger, the Notes or otherwise with respect to the transactions contemplated by the Merger Agreement or the NPA (provided that Holdings will provide, or cause to be provided, to Transferor a draft of any document containing such disclosure a reasonable time prior to the publication, disclosure or

 

5


filing thereof and will consider in good faith any comments provided by Transferor or its counsel), and (b) agrees as promptly as practicable to notify Holdings, Parent, Merger Sub and the Company of any required corrections with respect to any written information supplied by Transferor specifically for use in any such disclosure document. During the term of this Agreement, Transferor agrees that it will consult with Holdings before issuing any press releases or otherwise making any public statements with respect to the transactions contemplated herein, except as may be required in connection with the Offer in any Form 4, Schedule 13D, Schedule 13G (including any amendments to the foregoing forms and schedules) or other disclosure required by the SEC or other Governmental Entity to be made by Transferor in connection with the Offer, provided that to the extent permissible, Transferor shall deliver to Holdings a copy of each such Form 4, Schedule 13D, Schedule 13G (including any amendments to the foregoing forms and schedules) or other disclosure so required prior to filing the same.

9. Further Assurances. Transferor hereby covenants that, from time to time after the delivery of this Agreement, upon reasonable request from Holdings, Transferor will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered such further acts, conveyances, transfers, assignments, powers of attorney and assurances reasonably necessary to convey, transfer to and vest in Holdings, and to put Holdings in possession of, any of Transferor’s Rollover Shares in accordance with Section 4 hereof. Holdings hereby covenants that, from time to time after the delivery of this Agreement, upon reasonable request from Transferor, Holdings will do, execute, acknowledge and deliver, or will cause to be done, executed, acknowledged and delivered such further acts, conveyances, transfers, assignments, powers of attorney and assurances reasonably necessary to effect Transferor’s receipt of Holdings Shares in respect of Transferor’s Rollover Shares in accordance with Section 2 hereof. Transferor and Holdings hereby expressly acknowledge and agree that the Holdings Shares (including any Holdings Shares issued to Transferor) shall be uncertificated shares in accordance with the Delaware General Corporation Law and will be represented in book-entry form. Accordingly, Holdings will record the issuance of the Holdings Shares to Transferor by updating Holdings’ books to reflect the number and type of Holdings Shares issued to Transferor prior to the Closing, and Holdings will not be required to deliver, and will not deliver, any certificate or certificates evidencing the Holdings Shares to be issued to Transferor hereunder.

10. Survival of Representations and Warranties. All representations and warranties of Transferor or by or on behalf of Holdings in connection with the transactions contemplated by this Agreement contained herein shall survive the execution and delivery of this Agreement, any investigation at any time made by or on behalf of Holdings or Transferor and the issuance of the Holdings Shares.

11. Tax Treatment. The parties acknowledge and agree that, unless otherwise required by applicable law, the parties shall treat the contribution of the Rollover Shares and the receipt of the Holdings Shares as an exchange qualifying under section 351 of the Internal Revenue Code of 1986 (as amended) and no party shall take any position on any tax return that is inconsistent with such treatment.

12. Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by a writing specifically designated as an amendment hereto, signed on behalf of each of the parties in interest at the time of the amendment.

 

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13. Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or e mail, upon written confirmation of receipt by facsimile, e mail or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered (i) if to Transferor, to the address set forth on the signature page to this Agreement, or to such other address as Transferor shall have furnished to the Company in writing, and (ii) if to Holdings, to WC SACD One, Inc., c/o iSubscribed Inc., 15 Network Drive, Burlington, MA 01803, Attention: Hari Ravichandran, Attention: Hari Ravichandran (with a copy to Gibson, Dunn & Crutcher LLP, 2029 Century Park East, Suite 4000, Los Angeles, California 90067, Attention: Ari B. Lanin, Esq., Facsimile No.: (310) 552-7046), or pursuant to such other instructions as may be designated in writing by the party to receive such notice.

14. Interpretation. When a reference is made in this Agreement to a Section, Exhibit or Schedule such reference shall be to a Section, Exhibit or Schedule of this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement or in any Exhibit or Schedule are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall have the meaning as defined in this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to the Agreement as a whole and not to any particular provision in this Agreement. The term “or” is not exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall.” References to days mean calendar days unless otherwise specified.

15. Entire Agreement. This Agreement (including the Exhibits hereto), together with the Merger Agreement and the Support Agreement, constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the parties with respect to the subject matter hereof and thereof.

16. No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties hereto and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

17. Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.

 

7


18. Submission to Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

19. Assignment; Successors. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by any party without the prior written consent of the other parties, which consent in the case of a proposed assignment by: (a) Transferor to a proposed Permitted Transferee (as defined in the Support Agreement) shall not be unreasonably withheld, conditioned or delayed by Holdings provided the conditions to Transfer (as defined in the Support Agreement) to such Permitted Transferee in Section 8(b) of the Support Agreement are satisfied or (b) Holdings to an Affiliate shall not be unreasonably withheld, conditioned or delayed by Transferor. In the event Holdings assigns any or all of its rights, interests and obligations under this Agreement to an Affiliate as permitted by this Section 19, all references herein to Holdings shall be deemed references to such other Affiliate, except that all representations and warranties made herein with respect to Holdings as of the date of this Agreement shall be deemed to be representations and warranties made with respect to such other Affiliate as of the date of such assignment. Any such assignment not in conformity with the terms of this Section 19 shall be null and void.

 

8


20. Specific Performance. The parties agree that irreparable damage would occur in the event that the parties hereto do not perform the provisions of this Agreement in accordance with its terms or otherwise breach such provisions. Accordingly, prior to any termination of this Agreement, the parties acknowledge and agree that each party shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then in any federal court located in the State of Delaware or any other Delaware state court, this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (i) any defense in any action for specific performance that a remedy at law would be adequate and (ii) any requirement under any law to post security as a prerequisite to obtaining equitable relief.

21. Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

22. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

23. Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party.

24. Facsimile or .pdf Signature. This Agreement may be executed by facsimile or .pdf signature and a facsimile or .pdf signature shall constitute an original for all purposes.

25. No Presumption Against Drafting Party. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto.

The remainder of this page is intentionally left blank.

 

9


IN WITNESS WHEREOF, each party has executed this Agreement or caused this Agreement to be duly executed on its behalf by its duly authorized officer as of the date first written above.

 

WC SACD One, Inc.
By:  

/s/ Hari Ravichandran

Name: Hari Ravichandran
Title: Chief Executive Officer

 

Signature Page to Contribution and Assignment Agreement


 

TRANSFEROR

/s/ David A. McGough

(Signature)

David A. McGough

(Individual name)

 

SIGNATURE PAGE TO CONTRIBUTION AND ASSIGNMENT AGREEMENT


AGREEMENT OF SPOUSE

I, Thuy McGough, spouse of David A. McGough, acknowledge that I have read the Contribution and Assignment Agreement, dated October 29, 2018 (the “Contribution Agreement”), by and among my spouse and WC SACD One, Inc., a Delaware corporation (“Holdings”), I am aware that by the provisions of the Contribution Agreement, my spouse has agreed to take or refrain from taking, as the case may be, certain actions with respect to my spouse’s Rollover Shares (as defined in the Contribution Agreement), which such Rollover Shares I may have a community property or other interest in. I hereby consent to and approve in all respects the Contribution Agreement and all of the transactions and agreements contemplated thereby.

 

/s/ Thuy McGough

 

Name: Thuy McGough

 


SCHEDULE I

 

Transferor

  

Rollover Shares

  

Other Shares

  

Holdings Shares

David A. McGough    800,0001    428,067   

Holdings Common

Shares:

528,261

 

Holdings Series B

Shares:

271,739

 

1 

Assumes conversion of Note held by Transferor into 440,529 shares of Common Stock prior to the effective time of Transferor’s contribution of the Rollover Shares to Holdings pursuant to this Agreement.

 


EXHIBIT A

EXHIBIT ROLLOVER TERMS

 

EX-99.13 5 d648681dex9913.htm EX-99.13 EX-99.13

Exhibit 13

October 31, 2018

WC SACD One, Inc.

c/o iSubscribed Inc.

15 Network Drive

Burlington, MA 01803

Re: Binding Term Sheet

Ladies and Gentlemen:

WndrCo Holdings, LLC (“WndrCo”), General Catalyst Group IX, L.P. and GC Entrepreneurs Fund IX, L.P. (collectively, “GC”) and iSubscribed Inc. (“iSub” and, together with WndrCo and GC, the “Sponsors”) have formed WC SACD One, Inc., a Delaware corporation (“Newco”), to directly or indirectly acquire the outstanding equity securities of Intersections, Inc. (“Target”). This transaction would be accomplished by, among other things, (1) the issuance of senior secured convertible notes by Target to WC SACD One Parent, Inc., a Delaware corporation and wholly-owned subsidiary of Newco (“Parent”) and to certain existing creditors of Target (the closing of such issuance, the “Initial Closing”), (2) a tender offer to purchase shares of common stock of Target by WC SACD One Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), (3) the merger of Merger Sub with and into Target, with Target surviving the merger, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of the date hereof, between Parent, Merger Sub and Target, (4) the contribution by certain stockholders of Target (the “Rollover Holders”) of shares of Target to Newco in exchange for Common Interests and Series B Interests (each as defined in the Term Sheet (as defined below)) (the “Rollover”) and (5) subject to the iSub Contribution (as defined in the Term Sheet), the contribution of Newco interests by all of its equityholders (other than iSub) into a newly formed Delaware holding corporation (such entity, “Holdco” and such contribution, the “Newco Contribution”) (collectively, the “Transaction”). As a result of the Transaction, Holdco would be held by the Sponsors, the Rollover Holders and, subject to the iSub Contribution, the stockholders of iSub (the “iSub Participants”).

 

1.

Agreement to Negotiate in Good Faith; Binding Term Sheet. Company and each Sponsor (the “Parties”) agree to negotiate in good faith definitive agreements (the “Definitive Agreements”) consistent with the terms set forth in the term sheet attached hereto as Exhibit A (the “Term Sheet”). Until Definitive Agreements are executed by and among the Parties, the rights and obligations set forth in the Term Sheet shall be binding and enforceable upon the Parties. “Company” means Newco prior to the occurrence of both the Newco Contribution (as defined in the Term Sheet) and the iSub Contribution, and Holdco after the occurrence of both the Newco Contribution and the iSub Contribution.

 

2.

Representations and Warranties. Each Sponsor hereby represents and warrants to Company and the other Sponsors, that, (a) this letter agreement constitutes a legal, valid and binding obligation of such Sponsor enforceable against such Sponsor in accordance with its terms (except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity); (b) such Sponsor has the requisite corporate, limited liability company or limited partnership power and authority, as applicable, to enter into this letter agreement and to perform its obligations hereunder; and (c) the execution, delivery and performance of this letter agreement by such Sponsor has been duly and validly authorized by all necessary corporate, limited liability company or limited partnership action, as applicable, and does not contravene, conflict with or result in any violation of any provision of such Sponsor’s charter, partnership agreement, operating agreement or similar organizational documents.


3.

No Recourse. Notwithstanding anything that may be expressed or implied in this letter agreement, the Definitive Agreements, or any document or instrument delivered in connection herewith or therewith or any of the transactions contemplated hereby or thereby (including the termination or abandonment thereof), Company, by its acceptance of this letter agreement, unconditionally and irrevocably covenants, agrees and acknowledges on behalf of itself and its controlled affiliates that (a) no individual, corporation, partnership, limited liability company, association, trust or other entity or organization (each, a “Person”) other than the Sponsors shall have any obligations or liabilities hereunder; (b) notwithstanding that certain of the Sponsors are organized as a limited liability companies or limited partnerships, as applicable, no right or remedy, recourse or recovery hereunder, under the Definitive Agreements, or under any document or instrument delivered in connection herewith or therewith or in connection with the transactions contemplated hereby or thereby (or the termination or abandonment thereof), or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against any Non-Recourse Party (as defined below) of any Sponsor (or its respective participating affiliates), whether by the enforcement of any judgment or assessment or by any legal, equitable, investigative or arbitral proceeding, or by virtue of any statute, regulation or other applicable law (including common law); and (c) no personal liability or obligation whatsoever will attach to, be imposed on or otherwise be incurred by any Non-Recourse Party of any Sponsor (or its respective participating affiliates) for any liabilities or obligations of Company under this letter agreement or any documents or instruments delivered in connection herewith or in connection with the transactions contemplated hereby (or the termination or abandonment thereof), or in respect of any oral representations made or alleged to be made in connection herewith or for any claim, action, suit, arbitration, litigation, investigation or proceeding based on, in respect of or by reason of such obligations or by their creation (including the breach, termination or failure to consummate the Transaction), in the case of each of clauses (a), (b) and (c), whether based on contract, tort, strict liability, other laws (including common law) or otherwise, and whether by or through piercing of the corporate, limited liability company or limited partnership veil or similar action, by or through a claim by or on behalf of a Party or another Person or otherwise.

For purposes of this letter agreement, “Non-Recourse Party” means, with respect to each Sponsor, its affiliates and its and their former, current and future directors, trustees, officers, employees, agents and affiliates (both direct and indirect), the former, current and future holders (both direct and indirect) of any equity interests or securities of the foregoing (whether such holder is a limited or general partner, member, stockholder or otherwise), the former, current or future assignees of the foregoing and the former, current or future directors, trustees, officers, employees, agents, general or limited partners, managers, members, stockholders, affiliates, controlling persons, representatives or assignees of the foregoing.

 

4.

No Assignment. This letter agreement shall not be assignable by any Party without the prior written consent of each Sponsor. The granting of such consent in any given instance shall be solely in the discretion of each Sponsor and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment. Any purported assignment of any agreement or obligation evidenced by this letter agreement in contravention of this Section 4 shall be null and void.

 

5.

Third Party Beneficiaries. Nothing set forth in this letter agreement is intended to, shall confer upon or give to any Person (other than the Parties) any benefits, rights or remedies under or by reason of, or any rights to enforce or cause any Sponsor to perform any provisions of this letter agreement; provided that, notwithstanding the foregoing, the Non-Recourse Parties shall be express third party beneficiaries of the provisions set forth herein that are for the benefit of the Non-Recourse Parties, each of which shall survive an expiration or termination of this letter agreement.

 

2


6.

Confidentiality. This letter agreement shall be treated as confidential. This letter agreement may not be used, circulated, quoted otherwise referred to in any document (other than the Definitive Agreements), except with the written consent of each Sponsor; provided, that (a) Company may disclose this letter agreement to its officers, directors, advisors and other authorized representatives, and to the Rollover Holders (b) each Sponsor may disclose this letter agreement to (i) each of its affiliates and it and their respective officers, directors, advisors and other authorized representatives, (ii) the iSub Participants and Rollover Holders, and (iii) on a confidential basis in accordance with such Sponsor’s customary reporting practices, such Sponsor’s and its affiliates’ equityholders, existing and prospective limited partners and non-managing members, and (c) each Sponsor and Company may disclose the existence of this letter agreement to the extent required by applicable law, the applicable rules of any national securities exchange, in connection with any securities regulatory agency filings relating to the Transaction or in connection with the enforcement of any rights hereunder.

 

7.

Severability. Whenever possible, each provision or portion of any provision of this letter agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this letter agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this letter agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

 

8.

Governing Law. This letter agreement and all disputes or controversies arising out of or relating to this letter agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.

 

9.

Submission to Jurisdiction. Each of the Parties irrevocably agrees that any legal action or proceeding arising out of or relating to this letter agreement brought by any Party or its affiliates against any other Party or its affiliates shall be brought and determined in the Court of Chancery of the State of Delaware, provided, that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court. Each of the Parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this letter agreement and the transactions contemplated hereby. Each of the Parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the Parties further agrees that notice as provided herein shall constitute sufficient service of process and the Parties further waive any argument that such service is insufficient. Each of the Parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this letter agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this letter agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

3


10.

WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS LETTER AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

11.

Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile or email, upon written confirmation of receipt by facsimile, email or otherwise, (b) on the first business day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (c) on the earlier of confirmed receipt or the fifth business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth in a Party’s signature page hereto, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice.

 

12.

Entire Agreement. This letter agreement constitutes the entire agreement, and supersedes all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings among the Parties, with respect to the subject matter hereof.

 

13.

Amendment. This letter agreement may not be modified, amended, supplemented, cancelled or discharged, except by written instrument executed by the Parties.

 

14.

Counterparts. This letter agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

 

15.

Facsimile or .pdf Signature. This letter agreement may be executed by facsimile or .pdf signature and a facsimile or .pdf signature shall constitute an original for all purposes.

Signature pages follow.

 

 

4


Sincerely,
WndrCo Holdings, LLC
By:  

/s/ Andrew Chang

  Name: Andrew Chang
  Title: General Counsel
Address for Notices:

c/o WndrCo, LLC

9355 Wilshire Boulevard, Suite 400

Beverly Hills, CA 90210
Attn: Andrew Chang, General Counsel andrew@wndrco.com

 

[Signature Page to Binding Term Sheet]


General Catalyst Group IX, L.P.
By:   General Catalyst Partners IX, L.P.,
  its General Partner
By:   General Catalyst GP IX, LLC,
  its General Partner
By:  

/s/ Christopher McCain

  Name: Christopher McCain
  Title: Chief Legal Officer
Address for Notices:

General Catalyst Group IX, L.P.

20 University Road, Suite 450

Cambridge, MA 02138
Attn: Christopher McCain
With a copy to:
Sarah Schaffer Raux
Jane D. Goldstein
Ropes & Gray LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199-3600

 

[Signature Page to Binding Term Sheet]


GC Entrepreneurs Fund IX, L.P.
By:   General Catalyst Partners IX, L.P.
  its General Partner
By:   General Catalyst GP IX, LLC
  its General Partner
By:  

/s/ Christopher McCain

  Name: Christopher McCain
  Title: Chief Legal Officer
Address for Notices:

GC Entrepreneurs Fund IX, L.P.

20 University Road, Suite 450

Cambridge, MA 02138
Attn: Christopher McCain
With a copy to:
Sarah Schaffer Raux
Jane D. Goldstein
Ropes & Gray LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199-3600

 

[Signature Page to Binding Term Sheet]


iSubscribed Inc.
By:  

/s/ Hari Ravichandran

  Name: Hari Ravichandran
  Title: Chief Executive Officer
Address for Notices:

iSubscribed Inc.

15 Network Drive

Burlington, MA 01803

Attention: Hari Ravichandran

hari@isubscribed.com

 

[Signature Page to Binding Term Sheet]


Agreed and Accepted as of this 31st day of October 2018 by:
WC SACD One, Inc.
By:  

/s/ Hari Ravichandran

Name:   Hari Ravichandran
Title:   Chief Executive Officer
Address for Notices:

 

 

 

 

 

[Signature Page to Binding Term Sheet]


Exhibit A

Definitive Agreements Binding Term Sheet

 

A. Boards of Directors

  

1)  Company will be governed by a board of directors (the “Board”) having at least seven members. As long as WndrCo holds at least (i) 65% of the Series A Interests held by it at the Initial Closing (or, following the closing of the Transaction (the “Closing”), at the Closing) and (ii) 20% of the voting Interests of Company then outstanding, WndrCo shall be entitled to elect a majority of the Board. Initially, WndrCo will have the right to designate four directors; GC will have the right to designate one director (the “GC Director”); iSub will have the right to designate one director (the “iSub Director”) and the Rollover Holders (holding a majority of the Interests initially held by the Rollover Holders at Closing) will have the right to designate one director, who shall be Michael R. Stanfield for so long as such designation right exists and he desires to serve and is not subject to a material disability (the “Rollover Director”). Additionally, the Rollover Holders will be entitled to designate one non-voting Board observer with customary observation and information rights for all board and committee meetings, subject to customary protections to preserve the attorney-client privilege.

 

2)  At such time that WndrCo ceases to own at least 50% of the Series A Interests that it held at the Initial Closing (or, following the Closing, at the Closing), WndrCo will be entitled to designate only two directors; at such time that GC or iSub, as applicable, ceases to own at least 25% of the Series A Interests, in each case that it held at the Initial Closing (or, following the Closing, at the Closing), then GC or iSub, as applicable, will cease to have the right to appoint any directors; at such time that the Rollover Holders cease to own at least 25% of the Interests that they held at the Closing, then the Rollover Holders will cease to have the right to appoint any directors; and at such time that WndrCo ceases to own at least 10% of the Series A Interests that it held at the Initial Closing (or, following the Closing, at the Closing), WndrCo will cease to have the right to appoint any directors. At any time that a Sponsor or Loeb Holding Corporation (“LHC”) does not have the right to appoint any directors but continues to hold equity in Company, such Sponsor or LHC, as applicable, will have the right to appoint one non-voting observer to the Board with customary observation and information rights for all Board and Committee meetings, subject to customary protections to preserve the attorney-client privilege.

 

3)  For so long as a Sponsor is or the Rollover Holders are, as the case may be, entitled to appoint a director, each will be entitled to have a single director on each committee of the Board.

 

4)  Directors will be entitled to customary indemnification agreements, D&O insurance, expense reimbursement and any other similar matters on an equivalent basis.

 

5)  Each equityholder of Company will grant WndrCo a proxy to vote its Interests in the election of directors in order to effect the foregoing.

 

A-1


B. Board Approvals; Quorum

  

1)  Each director will be entitled to one vote on all matters presented for a vote to the Board. All votes by the Board will require the affirmative vote of a majority of the total number of directors constituting the entire Board for approval.

 

2)  A quorum shall exist if a majority of the total number of directors constituting the entire Board is present, as long as the GC Director is present (for so long as GC has a right to appoint a director) and one iSub Director is present (for so long as iSub has a right to appoint a director); provided that if at any Board meeting the GC Director or iSub Director was not present, then the immediately succeeding Board meeting duly called (with at least two business days’ notice) may proceed with a simple majority of the total number of directors constituting the entire Board.

 

3)  Special meetings of the Board shall require at least two business days’ prior notice.

C. Series A Interest Approval Rights

  

1)  Company will not take any of the following enumerated actions, directly or indirectly (whether by amendment, merger, consolidation, reclassification or otherwise), without the affirmative vote of 93% of the Series A Interests (a “Series A Approval”): (i) effect a Liquidation Event or Deemed Liquidation Event (each to be customarily defined in the Definitive Agreements) at any time prior to the seventh anniversary of the Closing; provided that if Hari Ravichandran resigns without Good Reason or is terminated for Cause (each as defined in his employment agreement with the Company to be entered into prior to Closing) (a “Bad Leaver”), then WndrCo shall have a proxy to vote the Interests of iSub and the iSub Participants with respect to such Liquidation Event or Deemed Liquidation Event; (ii) amend or waive any provision in the organizational documents of Company (“Organizational Documents”) in a manner that adversely and disproportionately affects any Sponsor; (iii) authorize or issue a security senior to or on parity with the Series A Interests, other than the Series B Interests in connection with the Rollover; (iv) authorize or issue additional Series A Interests, other than in connection with the Transaction, (including the iSub Contribution); (v) declare or pay any dividend or distribution or purchase or redeem (or permit any subsidiary to purchase or redeem) any equity of Company other than (A) redemptions of or dividends or distributions expressly authorized under the Organizational Documents, (B) repurchases of equity from former employees, officers, directors, consultants or other persons who performed services for Company or any subsidiary in connection with the cessation of such employment or service at a price no greater than the then-current fair market value thereof, (C) the Put or Call (as defined in Annex A) or (D) the iSub Put/Call (as defined below); provided that if Hari Ravichandran is a Bad Leaver, then WndrCo shall have a proxy to vote the Interests of iSub and the iSub Participants with respect to such dividend, distribution, purchase or redemption; (vi) authorize or incur any debt in excess of the greater of (A) $10 million and (B) 3x EBITDA in the aggregate,

 

A-2


  

provided that the occurrence or maintenance of up to $35 million of debt in connection with this transaction shall not require such Series A Approval; (vii) increase or decrease the size of the Board; (viii) change Company’s tax treatment; or (ix) agree to do any of the foregoing.

 

2)  For the avoidance of doubt, nothing contained herein shall require the consent of the holders of the Series A Interests with respect to any amendment or modification to the Organizational Documents necessary to (i) implement the terms of any new class or series of securities of Company authorized and issued in connection with a bona fide financing of Company or (ii) implement any action in connection with the Transaction, in each case that is not otherwise in violation of any express provision of this Term Sheet, including, for the avoidance of doubt, the consent rights contemplated by the preceding paragraph 1 of this Section C.

 

3)  Notwithstanding anything herein to the contrary, nothing herein shall require the consent of any holders (including the holders of the Series A Interests) or the Board (including a Board Special Vote or Board Supermajority Vote) for Company or its subsidiaries to take any of the following actions, and WndrCo shall have sole and absolute discretion to direct and cause Company to: (i) consummate the Transaction contemplated under the Merger Agreement and the other agreements entered into in connection therewith (the “Ancillary Agreements”), in accordance with the terms thereof; (ii) enforce rights, negotiate disputes, litigate disputes or settle disputes arising under, or relating to, the Merger Agreement and the Ancillary Agreements; (iii) receive and pay or distribute any funds received by Company under the Merger Agreement or the Ancillary Agreements, in accordance with the pro rata ownership of the Company and any terms set forth in the Term Sheet (including Section T “Allocation of Company Termination Fee”); (iv) withhold any amounts received by Company under the Merger Agreement or otherwise to satisfy any and all obligations or liabilities incurred by Company in connection with the Merger Agreement or the Ancillary Agreements; (v) execute and deliver any amendment or waiver to the Merger Agreement and the Ancillary Agreements, other than (A) an increase in the Offer Price (as defined in the Merger Agreement), (B) any amendment or waiver that would have an adverse and disproportionate effect on a Sponsor and/or (C) any amendment to or waiver under the Limited Guaranty (as defined in the Merger Agreement) or the WC SACD One Equity Commitment Letter (as defined in the Limited Guaranty); and (vi) take all other actions to be taken by or on behalf of Company and its subsidiaries in connection with the Merger Agreement and the Ancillary Agreements, in accordance with the terms thereof and that is not otherwise in violation of any express provision of this Term Sheet.

 

A-3


D. Board Special Approval Rights

  

1)  Company will not take any of the following enumerated actions, directly or indirectly (whether by amendment, merger, consolidation, reclassification or otherwise), without the consent of at least five directors (excluding, in the case of clause (ii) below, any director appointed by a party (including its affiliates) to such related party transaction or arrangement under consideration), including a director appointed by each Sponsor that has a right to appoint a director (“Board Special Vote”): (i) effect any fundamental change to the nature of the Company’s business; (ii) enter into any related party transactions or arrangements other than (A) those contemplated by the Transactions, including the Rollover and Newco Contribution, (B) the iSub Contribution, (C) equity issuances that are subject to preemptive rights, (D) a Put or Call, (E) an iSub Put/Call and (F) other customary exceptions (D&O indemnification agreements, etc.); or (iii) agree to do any of the foregoing.

 

2)  Company will not take any of the following enumerated actions, directly or indirectly (whether by amendment, merger, consolidation, reclassification or otherwise), without the consent of at least five directors (“Board Supermajority Vote”): (i) enter into any material acquisition or asset purchase with a value in excess of $10 million; (ii) make any investments exceeding $10 million in any other entity; (iii) enter into any divestiture with a value in excess of $10 million at any time prior to the seventh anniversary of the Closing (provided that if such divestiture is considered a Liquidation Event or Deemed Liquidation Event, then no Board Supermajority Vote or Board Special Vote is required); provided further that, in the cases of clauses (i)-(iii), in the event that such acquisition, asset purchase, investment or divestiture, as applicable, has a value in excess of the greater of $15 million and 4x EBITDA, then such action requires a Board Special Vote; or (iv) agree to do any of the foregoing.

 

3)  Company will not take any of the following enumerated actions without the consent of the GC Director (for so long as GC has the right to appoint a director): (i) the appointment of any Chief Executive Officer of Company (“CEO”), other than the appointment of Hari Ravichandran, which shall not require the consent of the GC Director, and (ii) during the period commencing on the date hereof and ending on the earlier of (x) the seventh anniversary of the Closing and (y) three days prior to pricing an IPO of WndrCo, the termination of a CEO without Cause (as defined in such CEO’s employment agreement with Company or its affiliate). For the avoidance of doubt, the GC Director shall have no consent right over any termination of a CEO for Cause (as defined in such CEO’s employment agreement with Company or its affiliate).

 

E.  Interests

  

1)  Company shall have Preferred Interests (Series A Interests, Series B Interests, and potentially other series thereof) and Common Interests (together, the “Interests”). The Interests may be in the form of limited liability company units, limited partnership interests, or stock of a corporation, as the case may be.

 

 

A-4


  

2)  The Series A Preferred Interests of Company (including the Series A-1 Interests and the Series A-2 Interests) shall collectively be referred to herein as the “Series A Interests”. The term “Series A-1 Interests” shall be defined herein as the Series A Interests issued to the Sponsors in connection with the transactions contemplated by clause (1) of the first paragraph of this letter agreement, and the term “Series A-2 Interests” shall be defined herein as the Series A Interests issued to the Sponsors in connection with the transactions contemplated by clauses (2), (3), and (5) of the first paragraph of this letter agreement, in each case consistent with the capitalization set forth in Exhibit C hereto (subject to the assumptions set forth therein).

 

3)  Each Series A Interest shall be convertible into a Common Interest (1:1), and shall have a liquidation value equal to the greater of (a) $2.27 (the “Series A-1 Conversion Price”) with respect to the Series A-1 Interests, and $3.68 (the “Series A-2 OIP”) with respect to the Series A-2 Interests (the “Series A Base Liquidation Value”) and (b) its value on an as-converted to Common Interest basis (i.e., without a liquidation preference). The conversion rate of Series A Interests shall be subject to customary broad-based anti-dilution protections (based on a “conversion price” equal to the Series A-2 OIP).

 

4)  Each Series A Interest shall accrue a compounding dividend on its Series A Base Liquidation Value at 6% annually, beginning from the Initial Closing for the Series A-1 Interests and from the Closing for the Series A-2 Interests.

 

5)  Each Series B Interest shall be convertible into a Common Interest (1:1), and shall have a liquidation value equal to the greater of (a) the Series A-2 OIP and (b) its value on an as-converted to Common Interest basis (i.e., without a liquidation preference). The conversion rate of Series B Interests shall be subject to customary broad-based anti-dilution protections.

 

6)  The Series A Interests and Series B Interests shall share pari passu in distributions upon a Liquidation Event or Deemed Liquidation Event.

 

7)  The Preferred Interests shall share in dividends and distributions on an as-converted to Common Interest basis.

 

8)  Except as set forth in this Section, the rights, privileges and preferences of the Series A Interests and the Series B Interests shall be identical. Exhibit C sets forth the pro forma capitalization of Newco and Holdco giving effect to all of the transactions contemplated hereby, subject to the assumptions set forth therein.

 

F.  Preemptive Rights

  

1)  In the event Company seeks to raise additional equity capital (including any securities or debt convertible into or exchangeable for equity, but subject to customary exceptions (e.g., employee incentive options) and excluding the Rollover, Newco Contribution and iSub Contribution), each holder of voting Interests will have the right to participate, on a pro rata basis, based on their then fully-diluted ownership of voting Interests. Preemptive rights will terminate upon an IPO.

 

 

A-5


G. Transfer Restrictions

  

1)  After the Closing, each Sponsor and Rollover Holder will be permitted to transfer Interests; provided that each such transfer must include a number of Interests equal to at least the lesser of (x) 100% of the Interests held by such transferor and its affiliates and (y) 5% of the outstanding Interests; provided, further, that in the case of a Rollover Holder, such transferred Interests shall remain subject to the Call, but shall have no Put right. Such transfer shall be subject to a right of first refusal in favor of Company and, in the event Company declines to exercise such right, the non-transferring Sponsors, subject to customary exceptions including transfers to affiliates. The right of first refusal will terminate on a Qualified Public Offering.

 

2)  Without the prior written consent of the Board, no other equityholder (excluding transfers by any Sponsor or Rollover Holder to the extent permitted in the preceding paragraph) may sell, transfer, assign or otherwise dispose of any direct or indirect interest in Company other than (i) to a controlled affiliate of such equityholder or an affiliate of such equityholder which also controls such equityholder, (ii) in the case of LHC, to its stockholders in connection with a liquidation of LHC, and (iii) in the case of individuals, to equityholders of his or her immediate family (i.e., parents, spouse, children and/or trusts that are and remain primarily for the benefit of any of them); provided that consent of the Board will not be required for sales, transfers, assignments or other disposals (A) effected pursuant to registered offerings effected in accordance with the rights set forth under “Registration Rights,” (B) effected pursuant to the “Tag-Along Rights” or the “Drag-Along Rights” discussed below, or (C) in the case of individuals, subject to any repurchase rights contained in any employment or similar agreement, if any. If the Board consents to a transfer of Series A Interests by an equityholder other than a Sponsor or Rollover Holder, such transfer shall be subject to a right of first refusal in favor of Company and, in the event Company declines to exercise such right, the Sponsors (pro rata), subject to the exceptions noted above. The right of first refusal will terminate on a Qualified Public Offering.

 

H. Tag-Along Rights

  

1)  If any Sponsor or Rollover Holder proposes to transfer any Interests held by it, then subject to transfers to affiliates, each other equityholder will have the right to sell a proportional amount of their Interests in such sale; provided that each participating equityholder will be required to participate on the same terms and conditions (on a pro rata basis, and the price per Interest shall be determined by calculating the equity value of Company implied by the price per Interest of the initially transferring holder, and distributing such equity value through a hypothetical liquidation waterfall) as the other parties selling in such transaction and to execute agreements and documents executed by the other parties selling in such transaction. These tag-along rights will terminate immediately prior to the consummation of a Qualified Public Offering.

 

 

A-6


I.   Drag-Along Rights:

  

1)  Subject to obtaining a Series A Approval, if necessary, WndrCo will have the sole right to cause a Company Sale, for so long as it owns more than 50% of the Series A Interests that it held at the Initial Closing (or, if after the Closing, at the Closing). The equityholders of Company shall cooperate in effecting the Company Sale to the extent approved by WndrCo.

 

2)  Such cooperation will include each equityholder voting its Interests to approve the transaction, waiving any dissenter or appraisal rights, selling its Interests in the transaction and entering into any sale agreements necessary for consummation of the transaction as requested by WndrCo; provided that such equityholder receives the same consideration in such sale as other equityholders holding the same class or series of units, that any such consideration is distributed among the equityholders through a hypothetical liquidation waterfall, and that such agreements limit each equityholder’s indemnification obligations to the amount of net proceeds received by such equityholder in such transaction on a several basis and other customary protections.

 

3)  Notwithstanding the foregoing, each of GC and the Rollover Holders shall not be required to agree to a non-compete or non-solicit covenant in connection with any drag-along Company Sale.

 

J.   Newco Contribution

  

1)  WndrCo will have the right to cause the Newco Contribution, which may be effected in one transaction or a series of related transactions, including by a downstream merger, a forced contribution by the holders (other than iSub) of their Newco equity into Holdco, or otherwise, provided that the rights, preferences and privileges of the Holdco equity received by the equityholders are substantially similar to the rights, preferences and privileges of the Newco equity they contribute and that such transaction or series of related transactions is effected in a manner consistent with the structure slides attached as Exhibit B hereto in a transaction that is expected to be governed by Section 351 of the Internal Revenue Code or, if an alternative structure is used, in a manner that preserves the intended tax treatment of the Rollover and the Newco Contribution as exchanges governed by Section 351 or other tax-free exchange provisions of the Internal Revenue Code. The equityholders of Company shall cooperate in effecting the Newco Contribution to the extent approved by WndrCo.

 

2)  Such cooperation will include each equityholder voting its Interests to approve the transaction, waiving any dissenter or appraisal rights, selling its Interests in the transaction and entering into any sale agreements necessary for consummation of the transaction as requested by WndrCo.

 

K. iSub Contribution

  

1)  WndrCo and iSub shall cause an iSub Contribution (as defined below) to be consummated as promptly as reasonably practicable following the Closing (and, in any event, by no later than 30 days after the Closing) on the terms specified in this Section K. An “iSub Contribution” means a transaction with iSub, pursuant to which (i) iSub becomes a direct or indirect subsidiary of Company and (ii) the iSub Participants become equityholders of Company.

 

 

A-7


  

2)  The iSub Contribution and the Newco Contribution shall be structured in good faith as a single transaction or series of related transactions that is treated as an integrated component of the same transactions, and may be effected by merger, consolidation, sale, exchange, issuance, transfer, redemption or otherwise; provided, that the iSub Contribution will be effected in a manner consistent with the structure slides attached as Exhibit B hereto in a transaction that is expected to be governed by Section 351 of the Internal Revenue Code, unless each of the Sponsors and the Rollover Holders agrees in writing to a different transaction structure (such consent not to be unreasonably withheld, conditioned, or delayed, but with it being agreed that it is unreasonable to withhold consent to a different transaction structure if the transaction is structured in a manner so as to result in receipt by the iSub Participants and all of the Sponsors and the Rollover Holders of equity of Company in a transaction governed by the tax-free exchange provisions of the Internal Revenue Code). Unless otherwise required by applicable law, the Parties will treat the iSub Contribution together with the Newco Contribution as set forth in Exhibit B hereto as a transaction governed by Section 351 of the Internal Revenue Code for federal income tax reporting purposes.

 

3)  The iSub Contribution will be (i) effected at a $50 million valuation of iSub (as adjusted reasonably and in good faith for net cash (or net debt) then held by iSub), with the full purchase consideration (in the form of Interests) payable in full upon closing of the iSub Contribution (without escrow) and (ii) consistent with the capitalization set forth in Exhibit C hereto (subject to the assumptions set forth therein).

 

4)  The iSub Contribution will be effected pursuant to definitive documentation in form to be negotiated and agreed by all Sponsors acting reasonably and in good faith, with the understanding that the representations and warranties will be substantially as set forth in that certain Series A Preferred Stock Purchase Agreement dated as of May 14, 2018, by and among iSub and the purchasers and founders signatory thereto (with (x) ordinary course updates to the disclosure schedules attached to such Series A Preferred Stock Purchase Agreement, provided, that such updates are not material and adverse to the Company and its subsidiaries taken as a whole, and (y) reasonable updates to reflect the Transactions), and that iSub will deliver at closing an officer’s certificate (unless waived by WndrCo) confirming that the representations and warranties (as qualified by the disclosure schedules) are true and correct in all material respects as of the closing; provided, however, that inability of iSub to make such representations and warranties or deliver such officer’s certificate based on events or circumstances transpiring after the date hereof and not otherwise involving an intentional breach or fraud by iSub or the iSub Participants shall not in and of itself constitute (A) failure to comply for purposes of Section 6(x) below or (B) a breach

 

 

A-8


  

of this Section K. There will be no post-Closing indemnification obligations on the part of the iSub Participants other than for intentional breaches or fraud. WndrCo and each of the equityholders of the Company shall cooperate in good faith, and make themselves reasonably available, to negotiate the definitive documentation governing the iSub Contribution promptly thereafter, with the intent of having such definitive documentation in substantially final form as soon as possible and in any event prior to the Closing.

 

5)  The equityholders of Company shall cooperate in effecting the iSub Contribution to the extent reasonably requested by WndrCo and iSub, with such cooperation to include each equityholder voting its Interests to approve the transaction, waiving any dissenter or appraisal rights, contributing its Interests to a new wholly owned subsidiary, and entering into any sale, contribution or other agreements necessary for consummation of the transaction as requested by WndrCo.

 

6)  In the event of a breach of the obligations in this Section K by WndrCo, then iSub or GC may bring a claim for breach of this Section K (a “Claim”) against WndrCo in accordance with this Section K and Sections 8 (“Governing Law”), 9 (“Submission to Jurisdiction”) and 10 (“Waiver of Jury Trial”) of the letter agreement. Provided that no such Claim has been brought by iSub or GC, if (x) iSub and GC have each complied with their obligations hereunder and (y) the iSub Contribution is not consummated by the 30th day following the Closing (the “Put Time”), then during the 30-day period following the Put Time, each of iSub and GC shall have the right to notify Company of its election to put 100% of the Interests held by iSub or GC, as applicable, as of the Closing (a “Put Sale”). A Put Sale shall be consummated within five days of notification of such Put Sale at a purchase price for each Interest equal to the Series A-2 OIP (other than the Series A-1 Interests, which will be at the Series A-1 Conversion Price), and shall, if properly elected by iSub or GC, as applicable, be the sole and exclusive recourse of iSub (and its affiliates) or GC (and its affiliates), as applicable, on the one hand, and WndrCo (and its affiliates), on the other hand, for any breach by such other Sponsor of this Section K.

 

7)  In the event of a breach of the obligations in this Section K by iSub and/or GC, then WndrCo may bring a Claim against iSub and/or GC, as applicable, in accordance with this Section K and Sections 8 (“Governing Law”), 9 (“Submission to Jurisdiction”) and 10 (“Waiver of Jury Trial”) of the letter agreement. Provided that no Claim has been brought by WndrCo, if (x) WndrCo has complied with its obligations hereunder and (y) the iSub Contribution is not consummated by the Put Time, then during the 30-day period following the Put Time, Company shall have the right to notify iSub and/or GC, as applicable, of its election to call 100% of the Interests held by iSub and/or GC, as applicable, as of the Closing (a “Call Purchase”). A Call Purchase shall be consummated within five days of notification of such Call Purchase at a purchase price for each

 

 

A-9


  

Interest equal to Series A-2 OIP (other than the Series A-1 Interests, which will be at the Series A-1 Conversion Price), and shall, if properly elected by WndrCo and accepted by iSub or GC, as applicable, be the sole and exclusive recourse of WndrCo (and its affiliates), on the one hand, and iSub (and its affiliates) or GC (and its affiliates), as applicable, on the other hand, for any breach by such other Sponsor of this Section K.

L.  Registration Rights; IPO Trigger Rights

  

1)  WndrCo will have the sole right to cause Company to file a registration statement under the Securities Act on Form S-1 or another appropriate form relating to Qualified Public Offering, for so long as WndrCo owns more than 50% of the Series A Interests that it held at the Initial Closing (or, if after the Closing, at the Closing). The equityholders of Company will cooperate in effecting the Qualified Public Offering to the extent approved by WndrCo.

 

2)  Each of the Company equityholders holding more than 1% of the outstanding Interests will have customary piggyback registration rights. Each Sponsor will have up to two demand registrations, subject to a step-down to be agreed if ownership falls below 10% of the then-outstanding Series A Interests. All registration rights shall be subject to customary restrictions, such as holdback agreements and underwriter cutbacks, in which case each equityholder exercising such right will be cut back on a pro rata basis.

M.   Access; Reports

  

1)  Company will provide to each Rollover Holder that holds more than 1% of the outstanding Interests and each Preferred Holder that holds any outstanding Preferred Interests:

 

•  Audited annual financial statements and unaudited quarterly financial statements, prepared in accordance with GAAP, consistently applied.

 

2)  Company will provide to each equityholder that holds at least 2.5% of the outstanding Interests:

 

•  Customary and reasonable general inspection rights.

N. Definitions

  

1)  For purposes of this Term Sheet, (x) a “Company Sale” means a transaction with a person that is not an affiliate of Company or group of persons that are not affiliates of Company acting in concert, pursuant to which such person or persons acquire, in any single transaction or series of related transactions, (i) all or substantially all of the outstanding securities of Company or (ii) all or substantially all of Company’s and its subsidiaries’ assets determined on a consolidated basis (in either case, whether by merger, consolidation, sale, exchange, issuance, transfer or redemption of Company’s securities, by sale, exchange or transfer of Company’s and its subsidiaries’ consolidated assets or otherwise), and (y) “Qualified Public Offering” means an underwritten offer to the public of Company’s (or its successor’s) equity securities pursuant to an effective registration statement or otherwise qualified under any applicable federal or foreign securities laws, if immediately thereafter Company has publicly held common stock listed on NASDAQ or NYSE (other than any issuance of equity securities in

 

A-10


  

any merger or other business combination, or any registration or the issuance of equity securities to existing securityholders or employees of Company or any of its subsidiaries) but only if (i) such offer results in gross proceeds (before underwriting discounts and selling commissions) to the issuer and the selling securityholders of at least $75,000,000 and (ii) the price per share of such offer is at least three times the Series A-2 OIP (subject to capitalization adjustments).

O. Equity Commitments

  

1)  The equity commitments of the Sponsors are as set forth in the WC SACD One Equity Commitment Letter, dated as of the date hereof.

P.  Put/Call

  

1)  The Put and Call rights relating to certain Rollover Holders are described in greater detail in the attached Exhibit D.

Q. Confidentiality

  

1)  All parties are subject to customary confidentiality covenants, with customary carve-outs for (i) disclosure on a confidential basis to investors and prospective investors and potential purchasers of the party’s direct or indirect equity interests, (ii) disclosure required by law, and (iii) disclosure to representatives.

R. Freedom to Operate

  

1)  Wndrco, GC and LHC are free to make other investments including those that may be deemed to be competing provided there shall not be overlapping Board members.

S.  Amendments

  

1)  Any amendment or change to the Definitive Agreements that adversely and disproportionally affects any class, series, or individual equityholder shall require the prior written consent of the holders of a majority of the Interests of such class or series, or of such individual equityholder, as the case may be.

T.  Allocation of Company Termination Fee

  

1)  In the event the Company Termination Fee (as defined in the Merger Agreement) is paid to Parent under the terms of the Merger Agreement, such Company Termination Fee shall be allocated and paid as follows: (i) first, to payment by the Company of its incurred but not yet paid expenses; (ii) second, to each Sponsor in an amount equal to the expenses actually incurred thereby in connection with the Transactions, subject to the limitations set forth in Section U of this Term Sheet (“Reimbursement of Out-of-Pocket Costs”); (iii) third, to each Sponsor in the amount invested by such Sponsor in Newco (including the amounts contributed by such Sponsor in connection with the Initial Closing); and (iv) fourth, in accordance with the percentages set forth on the table titled “Topping Bid / Breakup Alpha Split” attached as Exhibit E hereto.

U. Reimbursement of Out-of-Pocket Costs

  

1)  The Company shall reimburse each of the Sponsors, in a timely fashion and substantially concurrently with one another, for out-of-pocket expenses incurred thereby in connection with the Transaction up to a cap, in each case, of $200,000; provided, it being understood that the legal fees and expenses of Gibson, Dunn & Crutcher LLP specifically for its services to the Company (regardless of whether billed to the Company or WndrCo, but excluding services provided solely for WndrCo (e.g., negotiating this Term Sheet)) relating to clauses (1), (2), (3), (4) and (5) of the first paragraph of this letter agreement shall be the responsibility of the Company and not WndrCo.

 

A-11


Exhibit D

Put / Call Term Sheet

See attached.

 

D-1


Exhibit D

Put/Call Term Sheet1

 

A. Put/Call

Put. Beginning in calendar year 2022 and for each calendar year thereafter through 2026 (i.e., five periods), during the period beginning on March 1 and ending on the 30th day after delivery of the Annual Financial Statements of Company for the prior calendar year (the “Put Notice Period”), Michael Stanfield, David McGough and LHC (each, a “Put Participant”) shall each have the right to separately notify Company (the “Put Notice Date”) of its election to put to Company (a “Put Notice”) 10%, but not less than 10%, of the Interests held by such Put Participant at the Closing (a “Put”). For the avoidance of doubt, pursuant to the foregoing, the Put may be exercised once in each calendar year for a maximum total of five Puts.

 

  Call. Beginning in calendar year 2023 and for each calendar year thereafter through 2027 (i.e., five periods), during the period beginning on March 1 and ending on the 35th day after delivery of the Annual Financial Statements of Company for the prior calendar year (the “Call Notice Period” and, together with the Put Notice Period, each a “Put/Call Notice Period”), Company shall have the right to notify each Put Participant (the “Call Notice Date”) of Company’s election to purchase (a “Call”) 10% (unless it is Company’s third exercise of a Call with respect to such Put Participant, in which case 5%), but not less than 10% (or 5% in the case of Company’s third exercise of a Call with respect to such Put Participant), of the Interests held by such Put Participant at the Closing (a “Call Notice”). For the avoidance of doubt, pursuant to the foregoing, with respect to each Put Participant, the Call may be exercised once in each calendar year for a maximum total of three Calls with respect to any one Put Participant.

 

  Put Purchase Price. In the event of a Put, the purchase price for a Put Participant’s Interests shall be the proceeds that such Put Participant would receive with respect to the Preferred Interests and/or Common Interests being purchased if the Put Value (as defined below) as of the Put Notice Date were distributed to the equityholders of the Company through a hypothetical liquidation waterfall (the “Put Purchase Amount”). The “Put Value” shall mean, as of the Put Notice Date, the greatest of (a) the Revenue Multiple multiplied by Revenue for the prior calendar year, (b) the EBITDA Multiple multiplied by EBITDA, and (c) the Recent Financing Equity Value. If a Put Participant exercises a Put then subject to the “Put Limitations” below, the applicable Interests will be purchased within 90 days of the determination of the Put Purchase Amount.

 

  Call Purchase Price. In the event of a Call, the purchase price for a Put Participant’s Interests shall be the amount (the “Call Purchase Amount”) that is equal to (i) the proceeds that such Put Participant would receive with respect to the Preferred Interests and/or Common Interests being purchased if the Put Value as of the Call Notice Date were distributed to the equityholders of the Company, multiplied by (ii) 120%. If the Call is exercised, the applicable Interests will be purchased within 90 days of the determination of the Call Purchase Amount.

 

 

1 Capitalized terms used herein without definition have the meanings set forth in Exhibit A (Definitive Agreements Binding Term Sheet).

 

22


  Preferred Interests. To the extent a Put Participant holds both Preferred Interests and Common Interests, the Interests Put or Called for such Put Participant shall initially be Common Interests received upon conversion of Preferred Interests held by such Put Participant and its affiliates, and after such Put Participant and its affiliates no longer hold any Preferred Interests, Common Interests.

 

  Independent Exercise; Maximum Amount; No Catch-Up. For purposes of clarity, each of the Put Participants may exercise their Put independently of one another, and Company may exercise the Call with respect to one Put Participant independently of the other, in any Put/Call Notice Period. With respect to each Put Participant, the maximum amount that may be Put and Called in any year is 10% of the Interests held by such Put Participant at the Closing (it being understood that, in the case of a Put, the annual maximum Put percentage of 10% shall not be adjusted regardless of whether any Interests previously Put by a Put Participant have not been purchased (or payment has not been delivered) by Company due to the Put Limitations set forth below or otherwise). There will be no opportunity for a Put Participant or Company to Put or Call Interests that were not Put or Called in a prior Put/Call Notice Period. Any transferee of Interests initially held by a Put Participant shall not be entitled to the Put (excluding in each case transfers to controlled affiliates and, in the case of individuals, family members and trusts for the benefit of family members, as applicable, with respect to which the Put and Call rights shall remain in effect) but shall remain subject to the Call.

 

  For purposes of this section, the terms below shall have the following meanings:

 

  Annual Financial Statements” shall mean, with respect to any entity, the audited consolidated annual financial statements of such entity prepared in accordance with GAAP, consistently applied.

 

  EBITDA” shall mean, for the prior calendar year, consolidated net income plus (solely to the extent deducted in the determination of consolidated net income) any (i) income tax expense, (ii) interest expense, (iii) depreciation and amortization expense, and (iv) non-cash employee compensation expense related to stock ownership or stock option plans. All provisions in this “EBITDA” definition shall be defined in accordance with GAAP.

 

  EBITDA Multiple” shall mean a multiple based on Revenue Growth as depicted in Table 1 below for all calculations with respect to the Put Value for Put Notices or Call Notices, as applicable, delivered in 2022 and 2023, and thereafter as depicted in Table 2 below. For purposes of illustration, if the Revenue Growth is less than 10%, then the EBITDA Multiple shall be 9.0x.

 

  Recent Financing Equity Value” shall mean the equity value of the Company as implied by any bona fide equity financing or acquisition by Company in excess of $10,000,000 that closed within the 12 months preceding the Put Notice Date or Call Notice Date, as applicable; provided, that such equity value shall be adjusted, as appropriate to account for any preferential rights, preferences and privileges granted to the securities issued or their purchaser.

 

  Revenue” shall mean total revenue of the Company for the specified period determined in accordance with US GAAP, but excluding all FIG Revenue.

 

  FIG Revenue” shall mean any revenue received by Company from subscribers or customers serviced under agreements with financial institution clients; provided that such subscribers or customers, and the relevant agreements, existed on the date of the letter agreement that this Put/Call Term Sheet is attached to. By way of example, the FIG Revenue during the period January through September 2018 is set forth on Appendix A hereto.

 

2


  Revenue Growth” shall mean a percentage equal to (i) Revenue for the prior calendar year minus Revenue for the calendar year preceding the prior calendar year divided by (ii) Revenue for the calendar year preceding the prior calendar year.

 

  Revenue Multiple” shall mean a multiple based on Revenue Growth as depicted in Table 1 below for all calculations with respect to the Put Value for Put Notices or Call Notices, as applicable, delivered in 2022 and 2023, and thereafter as depicted in Table 2 below. For purposes of illustration, if Revenue Growth is 15%, then the Revenue Multiple shall be 2.5x.

 

Table 1

                 
      Revenue
Multiple
     EBITDA
Multiple
 

Revenue Growth less than 10%

     2.0x        9.0x  

Revenue Growth equal to or greater than 10% but less than 20%

     2.5x        10.0x  

Revenue Growth equal to or greater than 20%

     3.0x        11.0x  
    

 

 

    

 

 

 

 

Table 2

                 
      Revenue
Multiple
     EBITDA
Multiple
 

Revenue Growth less than 10%

     2.0x        9.0x  

Revenue Growth equal to or greater than 10% but less than 18%

     2.5x        10.0x  

Revenue Growth equal to or greater than 18%

     3.0x        11.0x  
    

 

 

    

 

 

 

 

B. Put Limitations

Upon receipt of a Put Notice:

 

  (a) if, in the reasonable and good faith determination of the Board, the closing of the Put would conflict with, result in a breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, or require consent pursuant to, any material contract of Company (for which those required to provide such consent do not reasonably agree to provide such consent), the Board may defer the closing of the Put until the Put would not have such an effect;

 

  (b) if, in the reasonable and good faith determination of the Board, the closing of the Put would result in material harm to Company (as a result of limited liquidity of Company or otherwise), the Board may defer the closing of the Put until the Put would not have such an effect;

 

  (c) if the closing of the Put would result in a violation of any federal, state or local statute, law, regulation, order, injunction or decree applicable to Company (including any Distribution Law (as defined below)), the Board may defer the closing of the Put until the Put would not have such an effect;

 

3


  (d) if, in the reasonable and good faith determination of the Board, Company does not have sufficient unencumbered cash, cash equivalents and/or marketable securities that are freely tradeable by the Company (“Cash Equivalents”) to pay the full Put Purchase Amount (leaving sufficient Cash Equivalents following the closing of the Put for the reasonable ongoing operations of Company), (i) Company shall only be obligated to pay that portion of the Put Purchase Amount that would, in the reasonable and good faith determination of the Board, leave Company with sufficient Cash Equivalents to fund the reasonable ongoing operations of Company, and (ii) the Board may defer the payment of the unpaid portion of the Put Purchase Amount until it has sufficient Cash Equivalents as described above.

 

  In addition to deferring the closing of the Put or the payment in full of the Put Purchase Amount as set forth in clauses (a) through (d) above, Company may, in its sole discretion, defer the closing of any Put up to two years (an “Elective Deferral”). The Company shall provide prompt written notice to the Put Participant of any Board decision to defer the closing of the Put or payment in full or part of the Put Purchase Amount, or any Elective Deferral (any such notice, a “Deferral Notice”). Notwithstanding the foregoing, the applicable Put Purchase Amount shall be determined as soon as practicable after the Put Notice Date, regardless of whether Company makes an Elective Deferral or Board makes any deferral of closing of the Put or the payment in full of the Put Purchase Amount as contemplated by clauses (a) through (d) above.

 

  To the extent Company has made an Elective Deferral or the Board has made a determination in accordance with any of clauses (a) through (d) above that the closing of the Put (or the payment therefor) must be deferred, the applicable Put Purchase Amount or any unpaid portion thereof, as applicable, shall bear interest at a rate of 6.0% per annum (compounded quarterly) on the basis of such Put Purchase Amount or such unpaid portion thereof, as applicable, and Company shall pay any such accrued interest concurrently with its payment of the deferred Put Purchase Amount or portion thereof, as applicable, at the closing of the applicable Put or the payment of the remaining portion of the Put Purchase Amount.

 

  Under no circumstances shall the Company or any of its affiliates have any obligation to incur any new or additional indebtedness or issue additional Interests or other equity to pay any portion of the Put Purchase Amount.

 

  Unless the Board has made a determination in accordance with any of clauses (a) through (d) above that the closing of the Put or the payment in full of the Put Purchase Amount must be deferred, Company shall pay the Put Purchase Amount within the time period specified above in the paragraph titled “Put Purchase Price”.

 

  Distribution Law” means any and all state and federal fraudulent transfer or fraudulent conveyance laws and applicable state laws regarding the transfer of property (whether by dividend, distribution, redemption, repurchase or otherwise) to holders of common or preferred equity interests, including the Uniform Fraudulent Transfer Act, the Uniform Fraudulent Conveyance Act, the United States Bankruptcy Code, and the Delaware General Corporation Law.

 

4


  To the extent the Board has made a determination in accordance with any of clauses (a) through (d) above that the closing of the Put or the payment in full of the Put Purchase Amount must be deferred, Company shall use its reasonable good faith efforts to mitigate the circumstances giving rise to such determination.

 

  Company shall not, by transfer of assets, consolidation, merger, scheme of arrangement, liquidation, dissolution, issue or sale of securities, or any other voluntary action or transaction, take any action or enter into any transaction, in each case the exclusive purpose of which is to defer a Put Closing or reduce the Put Value.

 

  Neither Company nor any of its affiliates shall, without the prior written consent of each Put Participant, enter into any agreement that would prohibit Company from purchasing on the terms set forth in the Definitive Put/Call Documentation the Preferred Interests and/or Common Interests of any Put Participant that are subject to such Put Participant’s right to exercise a Put.

 

  Definitive Put/Call Documentation” means the definitive agreements consistent with the terms set forth in this Exhibit D that are negotiated in good faith by Company and the Put Participants.

 

  In the event a Put Participant receives a Deferral Notice, the Put Participant shall have the right to cancel such Put exercise and no Call may be exercised in such year, provided that the Put Participant sends written notification of such cancellation to the Board within ten days after receiving the Deferral Notice.

 

C. Put/Call Termination

The Put and Call rights will terminate on a Qualified Public Offering.

 

5

EX-99.14 6 d648681dex9914.htm EX-99.14 EX-99.14

Exhibit 14

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each undersigned person hereby constitutes and appoints William J. Fitzgerald, Christopher McCain, Mark Allen and, Anthony Dell and each of them, with full power to act without the others, such person’s true and lawful attorney-in-fact, with full power of substitution, to sign any and all instruments, certificates and documents that may be necessary, desirable or appropriate to be executed on behalf of such person as an individual or in such person’s capacity as a direct or indirect general partner, director, officer or manager of any partnership, corporation or limited liability company, pursuant to section 13 or 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any and all regulations promulgated thereunder, and to file the same, with all exhibits thereto, and any other documents in connection therewith, with the Securities and Exchange Commission, and with any other entity when and if such is mandated by the Exchange Act or by the Financial Industry Regulatory Authority, granting unto said attorney-in-fact full power and authority to do and perform each and every act and thing necessary, desirable or appropriate, fully to all intents and purposes as such person might or could do in person, thereby ratifying and confirming all that said attorney-in-fact, or such person’s substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect with respect to each undersigned person unless and until six months after such person is both no longer a Managing Director of General Catalyst Partners and no longer serving on the board of directors of any portfolio company of any General Catalyst Partners fund.

IN WITNESS WHEREOF, this Power of Attorney has been signed as of the 30th day of October, 2018.

 

/s/ Kenneth I. Chenault

Kenneth I. Chenault

/s/ Kyle T. Doherty

Kyle T. Doherty

/s/ Holly Maloney

Holly Maloney

/s/ Paul L. Sagan

Paul L. Sagan
EX-99.15 7 d648681dex9915.htm EX-99.15 EX-99.15

Exhibit 15

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby constitutes and appoints William J. Fitzgerald, Christopher McCain and Mark Allen, and each of them, with full power to act without the others, his true and lawful attorney-in-fact, with full power of substitution, to sign any and all instruments, certificates and documents that may be necessary, desirable or appropriate to be executed on behalf of himself as an individual or in his capacity as a direct or indirect general partner, director, officer or manager of any partnership, corporation or limited liability company, pursuant to section 13 or 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any and all regulations promulgated thereunder, and to file the same, with all exhibits thereto, and any other documents in connection therewith, with the Securities and Exchange Commission, and with any other entity when and if such is mandated by the Exchange Act or by the Financial Industry Regulatory Authority, granting unto said attorney-in-fact full power and authority to do and perform each and every act and thing necessary, desirable or appropriate, fully to all intents and purposes as he might or could do in person, thereby ratifying and confirming all that said attorney-in-fact, or his substitutes, may lawfully do or cause to be done by virtue hereof. This Power of Attorney shall remain in full force and effect with respect to each undersigned person unless and until six months after such person is both no longer a Managing Director of General Catalyst Partners and no longer serving on the board of directors of any portfolio company of any General Catalyst Partners fund.

IN WITNESS WHEREOF, this Power of Attorney has been signed as of the 7th day of October, 2014.

 

/s/ Lawrence S. Bohn

Lawrence S. Bohn

/s/ Joel E. Cutler

Joel E. Cutler

/s/ David P. Fialkow

David P. Fialkow

/s/ William J. Fitzgerald

William J. Fitzgerald

/s/ Stephen A. Herrod

Stephen A. Herrod

/s/ David J. Orfao

David J. Orfao

/s/ Neil F. Sequeira

Neil F. Sequeira

/s/ Brian J. Shortsleeve

Brian J. Shortsleeve

/s/ Hemant Taneja

Hemant Taneja

/s/ Adam A. Valkin

Adam A. Valkin