Item 1.01 | Entry into a Material Definitive Agreement. |
Amendment No. 2 to Merger Agreement
As previously disclosed by GigCapital4, Inc. (“GigCapital4”) under Item 8.01 of its Current Report on Form 8-K filed on June 4, 2021, GigCapital4 entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated June 4, 2021, with GigCapital4 Merger Sub Corporation, a Delaware corporation and wholly owned subsidiary of GigCapital4 (“Merger Sub”), BigBear.ai Holdings, LLC, a Delaware limited liability company (“BigBear.ai”), and BBAI Ultimate Holdings, LLC, a Delaware limited liability company (“BBAI Holdings”). The Merger Agreement was subsequently amended by the parties on August 6, 2021.
The parties to the Merger Agreement have now entered into an Amendment No. 2 to the Merger Agreement (“Merger Agreement Amendment”), dated November 29, 2021. Pursuant to the Merger Agreement Amendment, (a) the Company Equity Value (as such term is defined in the Merger Agreement) is reduced from $1,312,100,000 to $1,125,000,000 and (b) the obligations of GigCapital4 and Merger Sub to consummate the Transaction (as such term is defined in the Merger Agreement), will be conditioned upon, among other things, that (i) following the completion of the Transaction, the post-combination company will have a minimum of $75,000,000 in cash, including the cash received from the sale by GigCapital4 of $200,000,000 in unsecured convertible notes (the “Notes”) as described by GigCapital4 in its Current Report on Form 8-K filed on June 8, 2021, as well as pursuant to the Backstop Subscription Agreement described below, following the payment (A) by GigCapital4 for any redeeming shares of GigCapital4 common stock, par value $0.0001 per share, of GigCapital4 (“GigCapital4 Common Stock”), (B) of the parties’ transaction expenses, (C) by BigBear.ai of its indebtedness being repaid upon the closing of the Transaction and (D) of the Cash Merger Consideration (as such term is defined in the Merger Agreement), and not including any cash that is allocated to satisfy GigCapital4’s obligations pursuant to those certain Forward Share Purchase Agreements (the “FPAs”), by and between GigCapital4 and each of (1) Glazer Capital, LLC and Meteora Capital LLC, on behalf of itself and its affiliated investment funds, (2) Highbridge Tactical Credit Master Fund, L.P. and Highbridge SPAC Opportunity Fund, L.P., and (3) Tenor Opportunity Master Fund, Ltd. (in each case, whether such amount is in escrow or otherwise), as described by GigCapital4 in its Current Reports on Form 8-K filed on October 15, 2021 and October 22, 2021 and (ii) the Backstop Subscription Agreement will be in full force and effect, and the subscriber thereto will have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Backstop Subscription Agreement to be performed, satisfied or complied with by it concurrently with the closing of the Transaction (the “Closing”), except where the failure of such performance, satisfaction or compliance would not or would not reasonably be expected to prevent, materially delay, or materially impair the ability of GigCapital4 to consummate the Closing.
As a result of the change in the Company Equity Value in the Merger Agreement Amendment, at the effective time of the First Merger (as such term is defined in the Merger Agreement), the Equity Merger Consideration (as such term is defined in the Merger Agreement) that will be paid to BBAI Holdings as part of consideration for the First Merger will be a number of shares of GigCapital4 Common Stock equal to the result of dividing (i) the difference of (A) the Company Equity Value, minus (B) $75,000,000, by (ii) 10.00, or 105,000,000 shares of GigCapital4 Common Stock.
The foregoing description is only a summary of the Merger Agreement Amendment and is qualified in its entirety by reference to the full text of the Merger Agreement Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference herein. The Merger Agreement Amendment is included as an exhibit to this Current Report on Form 8-K in order to provide investors and security holders with material information regarding its terms and the transaction. It is not intended to provide any other factual information about GigCapital4, Merger Sub, BigBear.ai or BBAI Holdings. The representations, warranties and covenants contained in the Merger Agreement Amendment were made only for purposes of that agreement; are solely for the benefit of the parties to the Merger Agreement Amendment; may have been made for the purposes of allocating contractual risk between the parties to
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