EFTA02470782.pdf

From: jeffrey E. <jeevacation@gmail.com> Sent: Friday, February 19, 2016 12:48 AM To: Brad Wechsler Cc: Melanie Spinella Subject: Re: Fw: Term Sheet and Loan Agreement Is this for me? On Thursday, 18 February 2016, Brad Wec=sler < <mailto Do you want this 2.2mm, non control, venture investment presented to truste=s for their consideration? Sent from my Verizon Wireless BlackBerry From: "Chan, Yvonne" < <javascript:_e(%7B=7D/cvmP, ):>> Date: Thu, 18 Feb 2016 23:17:37 0000 To: Keith ciavascript:_e(%7B%7D;cvmr= );»; =rad Wechsler <javascript:_e(%7B%7D/cvmr, ;> > Cc: <javascript:_e(%7B%7D,1=cvm Subject: FW: Term Sheet and Loan Agreement Keith, Brad (apologies — I no=e you were not on the original email with the revised docs).=/span> Issues from Max's mark up as =ollows: 1. Amount of the investment:=C2 $2.250 MM versus our $2.2 MM. Pls confirm the deal.<=u> 2. Percentage ownership of the comp=ny: 19.57% for $2.25 MM. Is this the deal? 3. Interest rate on loan: 0.0=%? we had 0.1%. 4. Default interest on loan: _%? we had 10%. 5. One year maturity for the loan:=C2 pls confirm OK. 6. Date for closing of the investme=t: April 19, 2016 — so four months to get the paperwork etc =n place. OK? 7. Liquidation pref: one time=. Consistent with seed preferred. Is this the deal?<=u> 8. Automatic conversion into common=on a qualified public offering — it raises $20MM. pls confir= this is OK. EFTA_R1_01582033 EFTA02470782  9. Monthly info - Keith =80 you asked for forecast vs actuals for downloads, usage and image upl=ads — their mark up suggests they will give you actual info only. Is this OK? 10. Materiality threshol=s for Series A preferred consents: $500K — do we have any id=a of their current financial situation? Should it be lower? 11. Drag if majority in interest wan= to sell: we had changed to two thirds. Majority in interest i= consistent with current stockholders agreement and pretty standard. 12. 5 member board : Magnus ch=oses three. Series A chooses one. Silent on the fifth =93 mark up deletes the nominee of Maleki. Have you discu=sed this? If they say the fifth is the CEO, then effectively Magnus has 4 seat=. OK? Or did you expect a seed investor to select the fi=th director? Or the fifth to be an independent or someone jointly selected=by Magnus and Black ? 13. Board meetings: reduced fr=m four to two semi-annual. OK? To finalize the docs and if you expec= to sign tomorrow, I need the name and address of the Black entity that wi=l fund the loan. Disbursement of loan will be 3 Biz Days after signing — so funding will be due Wednesday =eb 24. Let me know if you would like to disc=ss. On the business issues, it might be more efficient if you raised=them with Max/Magnus before we revise and finalize the documents. Yvonne Y.F.Chan I Partner Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019.6064 (Direct Phone) (Direct Fax) <javascript:_e(%78%7D;cvmli,sychan@paulweiss.com1=);> www.paulweiss.com <http://www.paul=eiss.com> From: Maximilian Straub Sent: Thursday, Februa 18, 2016 5:44 PM To: Chan, Yvonne <javascript:_e(%7B%7D/cvmr,=1$39; );> &=t; Cc: Keith < avascri t• e %7B%7D,'cvml','-=; n=s Resch gavascripte(%7B%7D;cvm11,&=39 );> Subject: Re: Term Sheet and Loan Agreement Dear all, 2 EFTA_R1_01582034 EFTA02470783  please find attached the revised version of both loa= agreement and term sheet. While I accepted almost all of the edits, I unf=rtunately spotted a mistake we made on the valuation and investment sum (i=e. given the agreed pre- money valuation of USD 9 mn and a total Series A investment of 2.5 mn (2.25 Leon Black, a=5 Anastasiya Siro), the fully diluted share of Leon Black should be 19.57%=- see cap table). Best, Max P.S.: For completeness, Anastasiya's share would=be 2.17% for her Series A shares or a total of 3.74% including common shar=s On Thu, Feb 18, 2016 at 9:52 PM, Chan, Yvonne < > wrote: All Attached are revised drafts of the lo=n agreement and the term sheet, reflecting our comments — and after a review of the current charter and stockholders agreement. I attach clean and redlined versions,=the redlined versions are marked to show the changes from the initial drafts we received. Please let us know if you have any qu=stions. Best regards Yvonne Yvonne Y.F.Chan I Partner 3 EFTA_R1_01582035 EFTA02470784  Paul, Weiss, Rifkind, Wharton & Garrison LLP 1285 Avenue of the Americas I New York, NY 10019-6064 (Direct Phone) I (Direct Fax) www.paulwe=ss.com <http://www.paulweiss.com> From: Keith Fox [mailto Sent: Thursday, February 18, 2016 3:16 PM To: Magnus Resch < <javascript:_e(%78%7D,icvmr,=#39 );» Cc: Anastasiya Siro <javascript:_e(%78%7D/c-vml ');»; Maximilian Straub <javascript:_e(%78%7D, );»; Chan, Yvonne < Subject: RE: Term Sheet and Loan Agreement Yvonne is traveling back to her office and will send=term sheet and loan revisions shortly. I spoke with several IP lawyers and would like your =uidance on what I have learned. Here's the simple summary: - data is fair usage and not an issue for the app=/u> - user generated images and content is covered as lo=g as we remove images, as requested. It's covered in DMCA, s=ction 512 - scraped data is more problematic for several reaso=s: 1) many sites prohibit scraping in their terms and c=nditions and therefore image collection is a violation of their terms.<=u> 2) most commercial sites do not have the rights to t=e images. They are permitted for the sole purpose of the one-time commerci=l usage. 3) we are "commercial" and therefore requi=ed to clear rights through the artists directly, via galleries / instituti=ns and through clearing houses like ARS and VAGA. You have $86,000 in year 1 and $172,800 in year 2 in your budget. </=> - =AO Do you agree with this assessment? 4 EFTA_R1_01582036 EFTA02470785  - =AO Many of the images and prices are from auction houses. Are =ou concerned that they might ask you to take down the images? =AO Can you let me know how you projected your image rights budget? =C2 Please let me know your thoughts. Keith Keith Fox CEO Phaidon 65 Bleecker Street, 8th FL<=b> New York, NY 10012=/u> T <=> =u> phaidon.com <https://urldefense.proofpoin=.com/v2/url?u=http- 3A phaidon.com&d=CwMFaQ&c=MVcBZOqZGZIJca=2IIMSkQ&r=NWjy9q4KCeeTzyh 2RyBXZX lyfaTP85C4REvkszT_EKM &m=u4LsjA=ImuifKiMsjIvVjprpxwfD75-1_wmyBBsaC3s&s=flaf-G0nteOllE33pUT7U97Lv65awj=trpXeH9zRh-RM&e=> From: Magnus Resch [manta Sent: Wednesday, February 17, 2016 10:53 PM To: Keith Fox Cc: Anastasiya Siro; Maximilian Straub Subject: Re: Term Sheet and Loan Agreement 5 EFTA_R1_01582037 EFTA02470786  Thank you for the update, Keith! Looking forward to =our revision tomorrow at around noon. Btw: This is my lawyer (here <https://urldefens=.proofpoint.com/v2/url?u=http- 3A_www.goodwinprocter.com_People_D_Davis- =DStephen.aspx&d=CwMGaQ&c=MVcBZOqZGZIJcau2llMSkQ&r=NWjy9q=KCeeTzyh2RyBXZXlyfaTP85C4REvkszT_EKM& m=V39UzZH2KDKZ2blj3cAcVFofnLmaa=fT_51.1sLMbg4SQ&s=Xea7-obpBP3tIW7JQbWjZcZJBVviMnvopdiGEqT7u8Y&e== target=> ). Goodwin Procter is considered as the top lawyer for the tech industry. =A0 On Wed, Feb 17, 2016 at 10:43 PM, Keith wrote: We are reviewing the updated term sheet in the am wi=h Leon. I plan to send you the revised documents tomorrow, hopefully by 12=00. (My meeting is at 11:00.) I appreciate your qui=k responses. Keith Keith Fox <=span> CEO aspan> Phaidon 65 Bleecker Stre=t, 8th FL New York, NY 10012 -<=> T =C2 M /=> /span> <javascript:_e(%76%7D;cv=1', );> On Feb 17, 2016, at 7:01 PM, Magnus Resch < );» wrote: Dear Keith, Today we have provided with - all legal documents you asked for - extensive answers to your technical question regar=ing the IT stack. We replied within the shortest possible time. I push=d my team to act really fast because we are running against the deadline t=is Friday. Can you please give us an update on your next steps. Thank you, Magnus 6 EFTA_R1_01582038 EFTA02470787  On Wed, Feb 17, 2016 at 10:26 AM, Keith M > wrote: Ok. Reviewing with lawyers today at 12:30. Ok on rent. Four isn't an issue. l=can call you later today to walk you through how I am thinking about it.=C2 We are space constrained, but I would like to have you and your team here! =/span> Keith Fox CEO Phaidon 65 Bleecker Street, 8th FL<=b> New York, NY 10012=/u> M /span> < =u> phaidon.com <https://urldefense.proofpoint.com/v2/url?==http- 3A phaidon.com&d=CwMGaQ&c=MVcBZOqZGZIlcau2IIMSkQ&==NWjy9q4KCeeTzyh2RyBXZXlyfaTP85C4REvkszT_EKM &m=V39UzZH2KDKZ2blj3cA=VFofnLmaa4fT_SlIsLMbg45Q&s=iFohZmHMi42bExSRrACUd4P5RYUnENvDsUMPtqRO0n=& e=> From: Magnus Resch Imailto Sent: Wednesday, February 17, 2016 10:20AM 7 EFTA_R1_01582039 EFTA02470788  To: Keith Fox Cc: Anastasiya Siro; Maximilian Straub Subject: Re: Term Sheet and Loan Agreement Thank you. That's ok. Any comments on the TS? And if you find the time please let me know your off=r regarding rent. I would prefer a charge per seat. Initially I will need =hree seats which will go up to 10 seats until year end. On Wed, Feb 17, 2016 at 10:14 AM, Keith > wrote: Please see my edits: It is intended that Phaidon, Artspace and Artace for= a strategic partnership in regards to their activities in e-commerce, lea= generation, editorial content and data analysis. Phaidon and Artspace Inc. are Artace's exclusive partners for these ac=ivities and Artace grants them a right of first refusal on data integratio=, gallery listings, analytics, and search functionality of Artace'=' app within Artspace and Phaidon.com <https://urldefense.proofpoint.com/v2/url?u=http- 3A_phaidon.co=&d=CwMGaQ&c=MVcBZOqZGZIJcau2llMSkQ&r=NWjy9q4KCeeTzyh2RyB=ZXlyfaTP8SC4REvkszT_EKM &m=V39UzZH2KDKZ2blj3cAcVFornimaa4fT_SUsiMbg45=&s=iFohZmHMi42bExSRrACUd4PSRYUnENvDsUMPtqRO0n4&e => . Artspace and Phaidon will create and execute promoti=nal and editorial programs to extend Artace's reach and adoption, =s guided by Artace, and provide additional services as required. Phaidon will in good faith provide publishing servic=s for Artace art market reports, as required. Additionally, Phaidon =ill offer Artace favorable rent terms for up to 10 employees, or as needed. Magnus will provide advisory services to Artspace in=luding but not limited to IT efficiencies, global gallery sales strategy a=d digital marketing initiatives. Keith <=p> 8 EFTA_R1_01582040 EFTA02470789  Keith Fox CEO Phaidon 65 Bleecker Street, 8th FL<=13> New York, NY 10012=/u> M /span> < =U> phaidon.com chttps://urldefense.proofpoint.com/v2/url?==http- 3A_phaidon.com&d=CwMGaQ&c=MVcBZOqZGZI.Icau2IIMSkQ&==NWjy9q4KCeeTzyh2RyBXZXlyfaTP85C4REvkszT_EKM &m=V39UzZH2KDKZ2blj3cA=VFofnLmaa4fT_5UsLMbg45Q&s=iFoh2mHMi42bExSRrACUd4P5RYUnENvDsUMPtqRO0n=& e=> From: Magnus Resch (mailto Sent: Tuesday, February 16, 2016 3:20 PM To: Keith Fox Cc: Anastasiya Siro; Maximilian Straub Subject: Re: Term Sheet and Loan Agreement It is intended that Phaidon Digital, Artspace and Ar=ace form a strategic partnership in regards to their activities in e-comme=ce, lead generation and data analysis. Phaidon Digital and Artspace Inc. are Artace's preferred partners for these activities=and Artace grants them a right of first refusal. 9 EFTA_R1_01582041 EFTA02470790  On Tue, Feb 16, 2016 at 3:12 PM, Keith > wrote: We have reviewed the documents and are currently getti=g outside guidance on the language. Our meeting with our lawyers is tomorrow a.m. We'll provide edits soon after.</=> I'd also like to incorporate basic language on=the strategic intent of the investment, including what you discussed with me and Leon. Would you like me to take the lead on drafting or =ould you like to take the lead? Thanks. Keith=/u> Keith Fox CEO Phaidon 65 Bleecker Street, 8th FL<=b> New York, NY 10012=/u> M /span> < =u> phaidon.com chttps://urldefense.proofpoint.com/v2/url?==http- 3A__phaidon.com&d=CwMGaQ&c=MVcBZOqZGZIkau2IIMSkQ&==NWjy9q4KCeeTzyh2RyBXZXlyfaTP85C4REvkszT_EKM &m=V39Uz2H2KDKZ2blj3cA=VFofnLmaa4fT_511sLMbg45Q&s=iFohZmHMi42bExSRrACUd4P5RYUnENvDsUMPtqRO0n=& 10 EFTA_R1_01582042 EFTA02470791  From: Magnus Resch [maiIto Sent: Tuesday, February 16, 2016 2:00 PM To: Keith Fox; Anastasiya Siro Cc: Maximilian Straub Subject: Re: Term Sheet and Loan Agreement Dear Kei=h, </=pan> I hope t=is finds you well and you enjoyed the long weekend. I wanted to follow up =n the TS and loan agreement I sent over last week. We are still working against the deadline of the 19th (i.e. Friday) t= close it. Please make sure to come back with any input today or tomo=row (Leon mentioned one change - 20% for 2.25mio, not 21.74% for 2.5m=o) as otherwise I am getting under pressure from my alternative investors to close with them. Let's avoid that!<=> </=pan> All the =est, Magnus On Fri, Feb 12, 2016 at 9:42 AM, Keith > wrote: I am traveling and wi=l be able to review these early this afternoon. Thanks. Keith =u> Keith Fox <=u> CEO <=u> Phaidon 65 Bleecker Street, 8th FL New Yo=k, NY 10012 T M /span> <javascript:_e(%76%7D;cv=r, I;> On Feb 12, 2016, at 8:33 AM, Magnus Resch < );» wrote: Dear Keith, Please find attached the term sheet and loan agreeme=t. Both are standard documents, just adapted to our needs. I would also li=e to introduce you to Maximilian Straub. Max was my partner in previous businesses, works for McKinsey and is member of the=board of Artace. In this role he is taking care of all legal matters of th= company and also coordinates with our lawyers. 11 EFTA_R1_01582043 EFTA02470792  In order to structure the process please do the foll=wing: - If you would like to change/add something, please =dit the docs via "Track Changes" - Max Straub (cc'd) and I will review it then an= reply with our comments/changes in the document Since I need to verify every changes with Max and in=order to facilitate the process, please understand that I prefer a written=communication on every matter related to these documents. <=u> Best, Magnus <Term Sheet_Artace_Feb2016_V2.docx><=u> <Loan Agreement_Artace_Feb2016_VIdocx>=u> This message is intended only for the use of the Addressee and may cont=in information that is privileged and confidential. If you are not the int=nded recipient, you are hereby notified that any dissemination of this communication is strictly prohibited. If you hav= received this communication in error, please erase all copies of the mess=ge and its attachments and notify us immediately. Maximilian Straub Gartliweg 1 CH-6300 Zug +41794778157 12 EFTA_R1_01582044 EFTA02470793  =C2 please note The information contained in this communic=tion is confidential, may be attorney-client privileged, may constit=te inside information, and is intended only for the use of the addresse=. It is the property of JEE Unauthorized use, disclosure or copying =f this communication or any part thereof is strictly prohibited and =ay be unlawful. If you have received this communication in error, pleas= notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com, and<=r>destroy this communication and all copies thereof, including all atta=hments. copyright -all rights reserved 13 EFTA_R1_01582045 EFTA02470794