| Item 1.01. | Entry into a Material Definitive Agreement. |
On November 5, 2020, Zix Corporation (the “Company”) entered into the Incremental Amendment No. 1 and First Amendment to Credit Agreement (the “Amendment”), with each of the financial institutions listed on Schedule I thereto under the heading “Incremental Term Lender” and Truist Bank, successor by merger to SunTrust Bank, as the administrative agent. The Amendment modifies the Company’s existing credit agreement dated as of February 20, 2019 to, among other things, borrow an incremental $35.0 million term loan thereunder (the “Incremental Term Loan”). The Incremental Term Loan has the same interest rate, maturity date, amortization schedule, collateral and other terms as the Company’s existing term loan and delayed draw term loan. The Company used the proceeds of the Incremental Term Loan to fund the Acquisition described in Item 8.01 of this Current Report on Form 8-K, and to repay all existing borrowings under the Company’s revolving credit facility.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
| Item 2.02. | Results of Operations and Financial Condition. |
On November 9, 2020, Zix issued a press release announcing financial results for the third quarter ending September 30, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 2.02 and in the attached Exhibit 99.1 are deemed “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
| Item 7.01. | Regulation FD Disclosure. |
As further described below under Item 8.01 and above under Item 1.01, on November 9, 2020, Zix issued a press release announcing that it (i) had acquired CloudAlly Ltd. (“CloudAlly”) and (ii) entered into the Amendment to borrow the Incremental Term Loan and finance such acquisition. A copy of the press release is furnished herewith as Exhibit 99.2.
The information furnished under Item 7.01 of this Current Report on Form 8-K and in the attached Exhibit 99.2 shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
Acquisition of CloudAlly
On November 5, 2020, Zix entered into a Share Purchase Agreement (the “Purchase Agreement”) with CloudAlly, and the sellers named therein. Pursuant to the Purchase Agreement, Zix acquired 100% of the equity interests of CloudAlly (the “Acquisition”). The aggregate purchase price is up to $30 million in cash, subject to a customary working capital adjustment, certain amounts to be held in escrow for indemnification obligations of the sellers, and customary reductions for outstanding indebtedness of CloudAlly and unpaid transaction expenses. The Acquisition is further described in Item 7.01 above and in the press release furnished herewith as Exhibit 99.2.
Non-Plan Equity Awards
Pursuant to Nasdaq Rule 5635(c)(4), on November 9, 2020, Zix issued a press release announcing (i) the grant of certain non-shareholder-approved inducement equity awards to certain employees of CloudAlly who were hired in connection with the Acquisition and (ii) the grant to Mr. Ryan Allphin, the company’s newly appointed Chief Product Officer, of certain non-shareholder-approved inducement equity awards. A copy of this press release is attached as Exhibit 99.3 hereto and incorporated herein by reference.
