Introductory Note
On May 13, 2024, pursuant to the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 6, 2024, by and among ZeroFox Holdings, Inc., a Delaware corporation (the “Company”), ZI Intermediate II, Inc., a Delaware corporation (“Parent”) and HI Optimus Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), Merger Sub merged with and into the Company with the Company surviving as a wholly-owned subsidiary of Parent (the “Merger”). Parent and Merger Sub are each affiliated with Haveli Investments Software Fund I, L.P. and Haveli Investments Software Fund I Cayman L.P., funds managed by Haveli Investments L.P., a private equity firm focused on the software and technology-enabled services sectors.
Item 1.01 |
Entry into a Material Definitive Agreement. |
Credit Agreement
On May 13, 2024, in connection with the Merger, ZI Intermediate I, Inc., a Delaware corporation (“Holdings”), Parent, entered into a credit agreement (the “Credit Agreement”) with Monroe Capital Management Advisors, LLC, as the administrative agent, the collateral agent, and the letter of credit issuer, and certain lenders party thereto.
The Credit Agreement provides for extensions of credit in the form of (i) initial term loans to Parent in an aggregate principal amount of $120,000,000 (the “Initial Term Loan”) and (ii) revolving credit loans made available to the Parent at any time and from time to time (prior to the sixth anniversary of the Closing Date, or if such date is not a business day, the immediately preceding business day) in an aggregate principal amount at any time outstanding not in excess of $10,000,000 (including letters of credit outstanding at the time) . The proceeds of the Initial Term Loan were used on the closing date under the Credit Agreement to, among other things, finance the transactions contemplated by the Merger Agreement, refinance certain existing indebtedness of the Company and pay related fees and expenses.
The Credit Agreement contains representations and warranties, covenants (including financial covenants) and events of default customary for agreements of this type.
Item 1.02 |
Termination of a Material Definitive Agreement. |
The information contained in the disclosure set forth in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 1.02.
As previously disclosed in Current Reports on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission (the “SEC”) on February 6, 2024, February 22, 2024 and March 6, 2024, the Company entered into note repurchase agreements (collectively, the “Note Repurchase Agreements”) with the beneficial owners (collectively, the “Noteholders”) of the Company’s 7.00%/8.75% Convertible Senior Cash/PIK Toggle Notes (the “Notes”) issued under the Indenture, dated August 3, 2022, by and between the Company and Wilmington Trust, National Association, as trustee, pursuant to which the Noteholders agreed to sell and the Company agreed to repurchase substantially concurrently with the closing of the Merger the aggregate principal amount of the Notes beneficial owned by the Noteholders and any additional Notes subsequently acquired by the Noteholders at an aggregate purchase price equal to the aggregate principal amount of the Notes repurchased plus accrued and unpaid interest, if any, thereon to, but excluding, the repurchase date. Concurrently with the closing of the Merger, in accordance with the terms of the Note Repurchase Agreements, the Company repurchased approximately $174.4 million aggregate payoff amount of Notes (including accrued and unpaid interest through the closing date under the Credit Agreement) from the Noteholders, constituting payment in full and cancellation of the Notes.
Concurrently with the closing of the Merger, the Company terminated that certain Loan and Security Agreement, dated January 7, 2021, as amended or supplemented from time to time, by and among the Company, the other loan parties thereto and Stifel Bank and concurrently repaid all advances and other obligations outstanding thereunder.
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