The Lenders and certain of their affiliates are holders of the Issuer’s outstanding 6.00% / 9.00% Convertible Senior PIK Toggle Notes due 2027 (the “Existing Notes”). Entities affiliated with Realty hold an aggregate of $121,759,546 principal amount of Existing Notes that, not giving effect to the Beneficial Ownership Limitation (as defined below), would be convertible into an aggregate of 1,896,566 shares of Class A Common Stock.
Pursuant to side letter agreements between (i) FP Investor and FP Investor II and (ii) FP Services, on the one hand, and the Issuer, on the other hand, each dated as of October 26, 2022 (the “Side Letters”), each of FP Investor, FP Investor II and FP Services may not convert their Existing Notes or exercise their FP Services Warrants into shares of Class A Common Stock to the extent that the delivery of any shares of Class A Common Stock or any other security otherwise deliverable upon such conversion would result in them, together with their affiliates or persons whose beneficial ownership would be aggregated with FP Investor, FP Investor II or FP Services, in the aggregate, having “beneficial ownership,” as determined in accordance with Section 13(d) of the Act, including the definition of any “group” of which FP Investor, FP Investor II or FP Services is a member, of shares of Class A Common Stock in excess of 4.99% (the “Beneficial Ownership Limitation”). Because the other parties to the Intercreditor Agreement may be deemed to be members of a “group” that includes the Reporting Persons, such other parties to the Intercreditor Agreement may be deemed subject to the Beneficial Ownership Limitation. The foregoing description of the Side Letters does not purport to be complete and is qualified in its entirety by reference to the execution versions of the Side Letters, copies of which are attached as Exhibit 10.4 and Exhibit 10.5 to the Issuer’s Form 8-K filed with the SEC on October 27, 2022 and are incorporated by reference herein.
As a material inducement for each Lender to enter into the Credit Agreement, CF Principal Investments LLC, the Other Lenders and certain affiliates of Realty (such affiliates together with the Other Lenders, the “RXR Consortium Members” and, together with CF Principal Investments LLC, the “Investors”) entered into a participation and intercreditor agreement (the “Intercreditor Agreement”) dated as of October 16, 2023, with Cantor Fitzgerald Securities serving as administrative agent and collateral agent.
Pursuant to the Intercreditor Agreement: (i) the RXR Consortium Members agreed, among other things, (A) to transfer an undivided 50% participation interest in the Existing Notes held by the RXR Consortium Members (the “RXR Consortium Notes”), other than the Existing Notes included in the SPV II Interest (as defined below), to CF Principal Investments LLC and (B) use commercially reasonable efforts to transfer to CF Principal Investments LLC an undivided 50% participation interest in (x) FP GP’s interest in the equity of (including promote), and any management fees in, FP Investor II and (y) the portion of the RXR Consortium Notes held by FP Investor II solely attributable to FP Investor (the “SPV II Interest”); and (ii) CF Principal Investments LLC agreed, among other things, to transfer an undivided 50% participation interests in the Existing Notes held by CF Principal Investments LLC to the RXR Consortium Members. Each of FP GP and CF Principal Investments, acting jointly, serve as Lender Representatives for the Investors under the Intercreditor Agreement (the “Lender Representatives”). Each Investor agreed to exercise any rights or powers available to it to (i) reject and oppose, and if applicable, vote against, any amendment, waiver, consent, supplement or other modification (or any transaction requiring any of the foregoing) that is rejected by the Lender Representatives and (ii) support and, if applicable, vote in favor of, any amendment, waiver, consent, supplement or other modification (or any transaction requiring any of the foregoing) that has been approved by the Lender Representatives, in each case, in respect the Existing Notes indenture or the Credit Agreement or otherwise. In addition, pursuant to the Intercreditor Agreement, any additional Existing Notes acquired by any Investor after the effective date of the Intercreditor Agreement shall be treated consistent with the terms of the Intercreditor Agreement, and each of the Investors agreed to not transfer or convert any of their Existing Notes or, subject to certain limited exceptions, their Commitments or Loans (as each such term is defined in the Credit Agreement) without the consent of the Lender Representatives. Each Investor further agreed that it will not, without each of the Lender Representatives’ prior written consent: (i) commence or continue any bankruptcy, liquidation or similar proceeding (“Proceeding”) against the Issuer or its subsidiaries, (ii)(x) solicit, support, propose or vote in favor of any arrangement, plan in any Proceeding, sale, or proposal or (y) file or support any motion, pleading or material in support of any motion, arrangement, plan in any Proceeding, sale, or proposal that, in the case of (x) and (y), challenges the priority of the Collateral (as such term is defined in the Credit Agreement), is inconsistent with the terms of the Intercreditor Agreement, is opposed by the Lender Representatives, or is adverse to the interests of the Lender Representatives, (iii) materially impair the rights of the Lender Representatives, or (iv) oppose any sale or plan in any Proceeding that is supported by the Lender Representatives.