Item 1.01 Entry into a Material Definitive Agreement.
On November 27, 2017, Box, Inc., a Delaware corporation (the “Company”), entered into a secured credit agreement (the
“Credit Agreement”) with Wells Fargo Bank, National Association, as lender. The Credit Agreement provides for an $85.0 million revolving credit facility, with a sublimit of $30.0 million available for the issuance of letters of
credit. The credit facility matures on November 27, 2020. The proceeds of the revolving loans may be used by the Company for general corporate purposes. As of November 29, 2017, there was $40.0 million in revolving loans outstanding
and $26.0 million in letters of credit issued under the credit facility.
The revolving loans accrue interest at a prime rate plus a
margin of 0.25% or, at the Company’s option, a LIBOR rate (based on one, three or
six-month
interest periods) plus a margin of 1.00%. Interest on the revolving loans is payable quarterly in arrears with
respect to loans based on the prime rate and at the end of an interest period in the case of loans based on the LIBOR rate (or at each three month interval if the interest period is longer than three months). The Company may borrow, prepay and
reborrow revolving loans, without premium or penalty, subject to customary breakage costs for certain types of loans. The principal amount of outstanding revolving loans, together with accrued and unpaid interest, is due on the maturity date. The
Company is also obligated to pay other customary fees for a credit facility of this size and type.
The Company’s obligations under
the Credit Agreement are secured by substantially all of the Company’s assets and will be guaranteed by its domestic subsidiaries meeting certain materiality thresholds. As of the closing date, there were no guarantors.
The Credit Agreement requires the Company to comply with a maximum leverage ratio and a minimum liquidity requirement. Additionally, the
Credit Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Company and its subsidiaries to, among other things, grant liens, incur debt, pay dividends or distributions on their capital
stock, effect certain mergers, make investments, dispose of assets and enter into transactions with affiliates, in each case subject to customary exceptions for a credit facility of this size and type.
The events of default under the Credit Agreement include, among others, payment defaults, material misrepresentations, breaches of covenants,
cross defaults with certain other material indebtedness, bankruptcy and insolvency events, and judgment defaults. The occurrence of an event of default could result in the acceleration of the Company’s obligations under the Credit Agreement,
the termination of the lender’s commitments, a 3% increase in the rate of interest, and an obligation of any or all of the Company’s subsidiary guarantors to pay the full amount of the Company’s obligations under the Credit Agreement.
From time to time, the lender and certain of its affiliates have engaged in, and may in the future engage in, investment banking and
other commercial dealings in the ordinary course of business with the Company or the Company’s affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
The foregoing description of the Credit Agreement does not purport to be complete and
is qualified in its entirety by the terms and conditions of the Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On November 27, 2017, in connection with the Company’s entry into the Credit Agreement discussed in Item 1.01 of this Current Report
on Form
8-K,
the Company terminated its Credit Agreement, dated as of December 4, 2015 (as amended, the “Terminated Credit Agreement”), by and between the Company and HSBC Bank USA, National
Association. As of November 27, 2017, there were no revolving loans outstanding under the Terminated Credit Agreement. The Company was not obligated to pay any early termination penalties as a result of the termination.
The terms and conditions of the Terminated Credit Agreement were disclosed in the Company’s Current Reports on Form
8-K
filed on December 7, 2015 and March 1, 2017, which disclosures are incorporated herein by reference.
The lender under the Terminated Credit Agreement and its affiliates have engaged in, and may in the future engage in, investment banking and
other commercial dealings in the ordinary course of business with the Company or the Company’s affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.