Item 1.01. Entry into a Material Definitive Agreement.
Limited Waiver and Consent
Nogin, Inc. (the "Company") did not timely make payment of the accrued interest
due March 1, 2023 (the "March Interest Payment") on its 7.00% Convertible Senior
Notes due 2027 (the "Convertible Notes") as required pursuant to Section 2.05 of
that certain Indenture, dated as of August 26, 2022, by and among the Company,
the guarantors party thereto (the "Guarantors") and U.S. Bank Trust Company,
National Association, as trustee (the "Trustee") and collateral agent (the
"Collateral Agent") (as supplemented, amended or otherwise modified, the
"Indenture"), governing the Convertible Notes (the default under the Indenture
resulting from failure to pay the March Interest Payment, the "Specified
Default").
On March 26, 2023, the Company, the Guarantors and each holder of the
Convertible Notes (each, a "Holder" and collectively, the "Holders") entered
into limited waivers and consents (each, a "Waiver" and collectively, the
"Waivers") pursuant to which, among other things, each Holder agreed to
(i) waive the Specified Default and any payment obligation of the Company under
the Indenture with respect to the March Interest Payment, (ii) in lieu of the
March Interest Payment and payment of the accrued interest on the Convertible
Notes due on September 1, 2023 (collectively, the "Interest Payments"), (a)
receive a Promissory Note (as defined below) and (b) amend the Warrant Agreement
(as defined below) to reduce the exercise price of the warrants governed thereby
from $11.50 to $0.01, and (iii) consent to the entry into the Supplemental
Indenture (as defined below).
The above description of the Waivers does not purport to be complete and is
qualified in its entirety by reference to the full text of the Form of Waiver, a
copy of which is filed as Exhibit 10.1 hereto and incorporated herein by
reference.
Supplemental Indenture
On March 26, 2023, the Company, the Guarantors, the Trustee and the Collateral
Agent entered into the Supplemental Indenture (the "Supplemental Indenture") to
the Indenture, amending certain terms of the Indenture consented to by the
Holders of all of the aggregate principal amount of the outstanding Convertible
Notes.
The Supplemental Indenture, among other things, (i) lowered the minimum amounts
of liquidity the Company must maintain on a consolidated basis for each quarter
in 2023 and the first quarter of 2024, (ii) added restrictions on the Company's
ability to make payments relating to certain restricted investments,
(iii) decreased the maximum amount of equity interests that the Company may
repurchase, redeem, acquire or retire, (iv) removed the Company's ability to
issue preferred stock or incur certain unsecured indebtedness or junior lien
indebtedness, (v) decreased other permitted debt baskets, (vi) decreased the
threshold for a cross-default for purposes of determining an Event of Default
(as defined in the Indenture) and (vii) added a new Event of Default in the
event the Company does not consummate an underwritten primary equity offering
providing at least $10 million of proceeds to the Company by April 30, 2023 (the
"April 2023 Offering").
The above description of the Supplemental Indenture does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Supplemental Indenture, a copy of which is filed as Exhibit 4.1 hereto and
incorporated herein by reference.
Promissory Notes
On March 26, 2023, the Company, the Guarantors and each Holder executed
unsecured promissory notes (each, a "Promissory Note" and collectively, the
"Promissory Notes"), with each Promissory Note having an aggregate principal
amount equal to such Holder's Interest Payments. The Promissory Notes mature on
March 26, 2025 and accrue interest at seven percent per annum.
In addition, the Promissory Notes provide that, in the event the Company
consummates the April 2023 Offering by April 30, 2023, the Holder of each
Promissory Note has the option to require the Company to prepay a portion of the
principal balance of the Promissory Note in an amount equal to or less than the
gross proceeds to the Company from any purchases by the Holder of the Company's
securities in the April 2023 Offering (the "Put Option"). Each Holder may
exercise its Put Option within ten business days following the closing and
funding of the April 2023 Offering. In addition, certain of the Promissory Notes
provide such Holders with the right to convert the Promissory Note into
unregistered securities of the Company (the "Unregistered Securities") on the
same terms as the securities offered in the April 2023 Offering in the event
such offering takes place.
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The Promissory Notes include customary events of default as well as an event of
. . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The disclosure set forth in Item 1.01 above under the caption "Promissory Notes"
is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth in Item 1.01 above relating to the Unregistered
Securities is incorporated by reference into this Item 3.02. The Unregistered
Securities to be issued in connection with the Promissory Notes will not be
registered under the Securities Act in reliance on the exemption from
registration provided by Section 3(a)(9) of the Securities Act.
Item 3.03. Material Modification to Rights of Security Holders.
The disclosure set forth in Item 1.01 above under the caption "Warrant Agreement
Amendment" is incorporated by reference into this Item 3.03.
Item 8.01. Other Events.
As previously reported, on August 26, 2022, the Company entered into an
arrangement with a financial institution whereby the financial institution would
use commercially reasonable efforts to purchase approximately 6 million shares
of the Company's common stock. On August 26, 2022, the Company paid the
financial institution cash in an amount equal to approximately 80% of the
aggregate price of the shares purchased by the financial institution. Pursuant
to the arrangement, the financial institution was permitted to sell the shares
it had purchased and keep all the proceeds of such sales until it recouped the
remaining 20% of the aggregate purchase price of the shares it had purchased
prior to August 26, 2022. As of March 23, 2023, the financial institution has
recouped the remaining 20% of the aggregate purchase price through the sale of a
portion of the shares.
Item 9.01. Financial Statement and Exhibits.
(d) Exhibits.
Incorporated by
Reference
Exhibit Filing
Number Description Form Exhibit Date
4.1 Supplemental Indenture, dated as of March 26, 2023, by
and among Nogin, Inc., the guarantors named therein and
U.S. Bank Trust Company, National Association, as trustee
and collateral agent.
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Incorporated by
Reference
Exhibit Filing
Number Description Form Exhibit Date
4.2 Form of Promissory Note.
4.3 Amendment to Warrant Agreement, dated as of March 26,
2023, by and between Nogin, Inc. and Continental Stock
Transfer & Trust Company.
10.1 Form of Limited Waiver and Consent.
104 Cover Page Interactive Data File, formatted in Inline XBRL
(included as Exhibit 101).
.
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