Item 1.01. Entry into a Material Definitive Agreement.
Offering of Common Stock
On June 29, 2021, Synchronoss
Technologies, Inc., a Delaware corporation (the “Company” or “Synchronoss”) closed its underwritten
public offering of common stock, par value $0.0001 per share (“Common Stock”). The offering was conducted pursuant to an
underwriting agreement (the “Underwriting Agreement”) dated June 24, 2021, by and among the Company and B. Riley
Securities, Inc., as representative of the several underwriters (the “Underwriters”) for gross proceeds of $110.0
million. At the closing, the Company issued 42,307,692 shares of Common Stock, inclusive of 3,846,154 shares of Common Stock issued
pursuant to the full exercise of the Underwriters’ option to purchase additional shares of Common Stock. The Underwriting
Agreement contains customary representations, warranties and covenants of the Company, customary conditions to closing,
indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933 (the
“Securities Act”), other obligations of the parties and termination provisions.
The foregoing description of the material terms
of the Underwriting Agreement is qualified in its entirety by reference to the full text of the Underwriting Agreement, a copy of which
is attached as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Offering of Senior Notes
On June 30, 2021, the Company closed
its underwritten public offering of $120 million aggregate principal amount of 8.375% senior notes due 2026 (the “Senior
Notes”). The offering was conducted pursuant to an underwriting agreement (the “Notes Underwriting Agreement”)
dated June 25, 2021, by and among the Company and B. Riley Securities, Inc., as representative of the several underwriters
(the “Notes Underwriters”). At the closing, the Company issued $125 million aggregate principal amount of Senior Notes,
inclusive of $5 million aggregate principal amount of Senior Notes issued pursuant to the full exercise of the Notes
Underwriters’ option to purchase additional Senior Notes.
The Notes Underwriting Agreement contains
customary representations, warranties and covenants of the Company, customary conditions to closing, indemnification obligations of
the Company and the Notes Underwriters, including for liabilities under the Securities Act, other obligations of the parties and
termination provisions.
The foregoing description of the material terms
of the Notes Underwriting Agreement is qualified in its entirety by reference to the full text of the Notes Underwriting Agreement, a
copy of which is attached as Exhibit 1.2 to this Current Report on Form 8-K and is incorporated herein by reference.
On June 30, 2021, the Company entered
into an indenture (the “Base Indenture”) and a supplemental indenture (the “First Supplemental Indenture”
and, together with the Base Indenture, the “Indenture”) with The Bank of New York Mellon Trust Company National
Association, as trustee (the “Trustee”), among the Company and the Trustee. The Indenture establishes the form and
provides for the issuance of the Senior Notes.
The Senior Notes are senior unsecured
obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured
and unsubordinated indebtedness. The Senior Notes are effectively subordinated in right of payment to all of the Company’s
existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally
subordinated to all existing and future indebtedness of the Company’s subsidiaries, including trade payables. The Senior Notes
bear interest at the rate of 8.375% per annum. Interest on the Senior Notes is payable quarterly in arrears on January 31,
April 30, July 31 and October 31 of each year, commencing on July 31, 2021. The Senior Notes will mature
June 30, 2026, unless redeemed prior to maturity.
The Company may, at its option, at any time and
from time to time, redeem the Senior Notes for cash in whole or in part (i) on or after June 30, 2022 and prior to June 30,
2023, at a price equal to $25.75 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on
or after June 30, 2023 and prior to June 30, 2024, at a price equal to $25.50 per Senior Note, plus accrued and unpaid interest
to, but excluding, the date of redemption (iii) on or after June 30, 2024 and prior to June 30, 2025, at a price equal
to $25.25 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, and (iv) on or after June 30,
2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the
date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Senior Notes.
The Indenture contains customary events of default
and cure provisions. If an uncured default occurs and is continuing, the Trustee or the holders of at least 25% of the principal amount
of the Senior Notes may declare the entire amount of the Senior Notes, together with accrued and unpaid interest, if any, to be immediately
due and payable. In the case of an event of default involving the Company’s bankruptcy, insolvency or reorganization, the principal
of, and accrued and unpaid interest on, the principal amount of the Senior Notes, together with accrued and unpaid interest, if any, will
automatically, and without any declaration or other action on the part of the Trustee or the holders of the Senior Notes, become due and
payable.
The foregoing description of the Indenture,
and the Senior Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Base
Indenture and the First Supplemental Indenture, copies of which are attached as Exhibit 4.1 and Exhibit 4.2, respectively,
to this Current Report on Form 8-K and the form of Senior Note, which is attached as an exhibit to the First Supplemental
Indenture.
A copy of the opinion of Gunderson Dettmer
Stough Villeneuve Franklin & Hachigian, LLP relating to the validity of the issuance and sale of the shares of Common Stock
and the issuance and sale of the Senior Notes is attached as Exhibit 5.1A and Exhibit 5.1B to this Current Report on
Form 8-K and each is incorporated herein by reference. A copy of the opinion of Skadden, Arps, Slate, Meagher & Flom
LLP relating to the enforceability of the Senior Notes, the Base Indenture and the First Supplemental Indenture is attached as
Exhibit 5.1C to this Current Report on Form 8-K and each is incorporated herein by reference.
Private Placement of Series B Preferred
Stock
On June 30, 2021, the Company closed a private
placement of 75,000 shares of its Series B Perpetual Non-Convertible Preferred Stock, par value $0.0001 per share, with an initial
liquidation preference of $1,000 per share (the “Series B Preferred Stock”), for an aggregate purchase price of $75.0
million (the “Series B Transaction”). The sale of the Series B Preferred Stock was pursuant to the Series B
Preferred Stock Purchase Agreement, dated as of June 24, 2021 (the “Series B Purchase Agreement”), between Synchronoss
and B. Riley Principal Investments, LLC (“BRPI”).
The Series B Purchase Agreement is filed
as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference, and the foregoing summary
of the Series B Purchase Agreement is qualified in its entirety by reference to Exhibit 2.1.
In connection with the closing the of the Series B
Transaction, Synchronoss (i) filed a Certificate of Designation with the State of Delaware setting forth the rights, preferences,
privileges, qualifications, restrictions and limitations on the Series B Preferred Stock (the “Series B Certificate”)
and (ii) entered into an Investor Rights Agreement with B. Riley Financial, Inc. (“B. Riley Financial”) and BRPI
setting forth certain governance and registration rights of B. Riley Financial with respect to Synchronoss.
The rights, preferences, privileges, qualifications,
restrictions and limitations of the shares of Series B Preferred Stock are set forth in the Series B Certificate. Under the
Series B Certificate, the holders of the Series B Preferred Stock are entitled to receive, on each share of Series B Preferred
Stock on a quarterly basis, an amount equal to the dividend rate, as described in the following sentence, divided by four and multiplied
by the then-applicable Liquidation Preference (as defined in the Series B Certificate) per share of Series B Preferred Stock
(collectively, the “Preferred Dividends”). The dividend rate is (1) 9.5% per annum for the period commencing on June 30,
2021 and ending on and including December 31, 2021, (2) 13% per annum for the year commencing on January 1, 2022 and ending
on and including December 31, 2022; and (3) 14% per annum for the year commencing on January 1, 2023 and thereafter. The
Preferred Dividends will be due in cash on January 1, April 1, July 1 and October 1 of each year (each, a “Series B
Dividend Payment Date”). In the event Synchronoss does not declare and pay a dividend in cash on any Series B Dividend Payment
Date, the unpaid amount of the Preferred Dividend will be added to the Liquidation Preference.
On and after the fifth anniversary of the date
of issuance, holders of shares of Series B Preferred Stock will have the right to cause Synchronoss to redeem each share of Series B
Preferred Stock for cash in an amount equal to the sum of the current liquidation preference and any accrued dividends. Each share of
Series B Preferred Stock will also be redeemable at the option of the holder upon the occurrence of a “Fundamental Change”
(as that term is defined in the Series B Certificate) at (i) par in the case of a payment in cash or (ii) 1.5 times par
in the case of payment in shares of Common Stock (such shares being, “Registrable Securities”), subject to certain limitations
on the amount of stock that could be issued to the holders of Series B Stock. In addition, the Company will be permitted to redeem
outstanding shares of the Series B Preferred Stock at any time for the sum of the then-applicable Liquidation Preference and the
accrued but unpaid dividends. Pursuant to the Series B Certificate, Synchronoss will be required to use (i) the first proceeds
$50.0 million of proceeds from certain transactions received by the Company to redeem for cash, shares of Series B Preferred Stock,
on a pro rata basis among each holder of Series B Preferred Stock and (ii) the next $25.0 million of proceeds from certain transactions
received by the Company may be used by the Company to buy back shares of Common Stock, and to the extent, not used for such purpose by
the Company, to redeem, for cash, shares of Series B Preferred Stock, on a pro rata basis among each holder of Series B Preferred
Stock.
Synchronoss shall be required to obtain the prior
written consent of the Holders holding at least a majority of the outstanding shares of Series B Preferred Stock before to taking
certain actions, including: (i) certain dividends, repayments and redemptions; (ii) any amendment to Synchronoss’ certificate
of incorporation that adversely effects the rights, preferences, privileges or voting powers of the Series B Preferred Stock; and
(iii) issuances of stock ranking senior or equivalent to shares of Series B Preferred Stock (including additional shares of
Series B Preferred Stock) in the priority of payment of dividends or in the distribution of assets upon any liquidation, dissolution
or winding up of Synchronoss. Other than with respect to the foregoing consent rights, the Series B Preferred Stock is non-voting
stock.
The Series B Certificate is filed as Exhibit 3.1
to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference, and the foregoing summary of the Series B
Certificate is qualified in its entirety by reference to Exhibit 3.1.
Investor Rights Agreement
On June 30, 2021, Synchronoss, B. Riley Financial
and BRPI entered an Investor Rights Agreement (the “Investor Rights Agreement”). Pursuant to the Investor Rights Agreement,
for so long as affiliates of B. Riley Financial beneficially own at least 10% of the outstanding shares of Common Stock (unless such equity
threshold percentage is not met due to dilution from equity issuances), B. Riley Financial is entitled to nominate one Class II director
(the “B. Riley Nominee”) to the Company’s board of directors (the “Board”), who shall be an employee of
B. Riley Financial or its affiliates and is approved by the Board, such approval not to be unreasonably withheld. For so long as affiliates
of B. Riley Financial beneficially own 5% or more but less than 10% of the outstanding shares of Common Stock (unless such equity threshold
percentage is not met due to dilution from equity issuances), B. Riley Financial is entitled to certain board observer rights.
In addition, in the event that Synchronoss issues
Registrable Securities to the holders of Series B Preferred Stock, such holders will have certain demand and piggy-back registration
rights with respect to such Registrable Securities.
The form of the Investor Rights Agreement is filed
as Exhibit 4.3 to this Current Report on Form 8-K and is incorporated into this Item 1.01 by reference, and the foregoing summary
of the Investor Rights Agreement is qualified in its entirety by reference to Exhibit 4.3.
Redemption of Series A Preferred Stock
The net proceeds from the Common Stock offering,
Senior Note offering and the Series B Transaction was used in part to fully redeem all outstanding shares of Synchronoss’ Series A
Convertible Participating Perpetual Preferred Stock (“Series A Preferred Stock”) on June 30, 2021 (the “Redemption”).