WETF WisdomTree Investments Inc

Indenture and Notes

On June 16, 2020, WisdomTree Investments, Inc. (the “Company”) issued $150.0 million in aggregate principal amount of 4.25% Convertible Senior Notes due 2023 (the “Notes”) pursuant to an Indenture (the “Indenture”), dated June 16, 2020, between the Company and U.S. Bank National Association, as trustee (the “Trustee”), in a private offering to qualified institutional buyers (the “Note Offering”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The sale of the Notes to an investment bank (the “Initial Purchaser”) pursuant to the Purchase Agreement (the “Purchase Agreement”), dated June 9, 2020, by and between the Company and the Initial Purchaser, resulted in approximately $145.5 million in net proceeds to the Company. The Company used approximately $121.6 million of the net proceeds from the Note Offering and approximately $52.7 million of cash on hand to repay in full all amounts outstanding under, and discharge all obligations in respect of, the credit agreement (the “Credit Agreement”), dated as of April 11, 2018, by and among the Company, WisdomTree International Holdings Ltd., certain subsidiaries of the Company as guarantors, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent, collateral agent, L/C issuer and lender. The Company also used approximately $23.9 million of the net proceeds from the Note Offering to repurchase approximately 6.4 million shares of the Company’s common stock at a price of $3.70 per share. Pursuant to the Purchase Agreement, the Company granted the Initial Purchaser an option to purchase, for settlement during a period of 13 days from, and including, June 16, 2020, up to an additional $22.5 million aggregate principal amount of Notes. As of the date of this Current Report on Form 8-K, the Initial Purchaser has not exercised its option to purchase additional Notes.

The Notes are the Company’s senior unsecured obligations, but are subordinated in right of payment to the Company’s obligations to make certain redemption payments (if and when due) in respect of its Series A preferred stock. The Notes bear interest at a rate of 4.25% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2020. The Notes will mature on June 15, 2023, unless earlier converted, repurchased or redeemed. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Notes to be converted. At its election, the Company will also settle its conversion obligation in excess of the aggregate principal amount of the Notes being converted in either cash, shares of its common stock or a combination of cash and shares of its common stock.

Holders may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2023 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) upon the occurrence of a notice of redemption delivered by the Company in accordance with the terms of the Indenture but only with respect to the Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events. On or after March 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances.

The Notes will be convertible at an initial conversion rate of 168.9189 shares of the Company’s common stock, per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $5.92 per share), subject to adjustment. In certain circumstances, conversions in connection with a “make-whole fundamental change” (as defined in the Indenture) or conversions of Notes called (or deemed called) for redemption may result in an increase to the conversion rate, provided that the conversion rate will not exceed 270.2702 shares of the Company’s common stock per $1,000 principal amount of Notes, subject to adjustment.

The Company may not redeem the Notes prior to June 20, 2021. The Company may redeem for cash all or any portion of the Notes, at its option, on or after June 20, 2021 and on or prior to the 55th scheduled trading day immediately preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding the redemption date. No sinking fund is provided for the Notes.

If the Company undergoes a “fundamental change” (as defined in the Indenture), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the entire principal amount of all the Notes plus accrued special interest, if any, to be immediately due and payable.

A copy of the Indenture and form of Note are filed as Exhibit 4.1 and Exhibit 4.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein. The foregoing description of the Indenture and Notes does not purport to be complete and is qualified in its entirety by reference to such exhibits.