Item 1.01 Entry into a Material Definitive Agreement.
Letter of Credit and Reimbursement Agreement
As previously disclosed by Kaleyra, Inc. (the "Company") in the Current Reports
on Form 8-K as filed with the Securities and Exchange Commission on November 20,
2019 and December 16, 2019, the Company entered into, and subsequently amended,
the Forward Share Purchase Agreement (the "Forward Share Purchase Agreement")
with Glazer Capital, LLC ("Glazer"). Pursuant to the terms of the Forward Share
Purchase Agreement, the Company was to enter into a letter of credit agreement
for the issuance of a standby letter of credit for the benefit of Glazer to
replace the escrow account that was established concurrently with the execution
of the Forward Share Purchase Agreement.
In accordance with its obligations under the Forward Share Purchase Agreement,
on January 7, 2020, the Company entered into a Letter of Credit and
Reimbursement Agreement (the "Letter of Credit and Reimbursement Agreement")
with EagleBank ("EagleBank") pursuant to which EagleBank issued a standby letter
of credit in the stated amount of $9,314,403.16 (the "Letter of Credit") for the
benefit of Glazer. The Letter of Credit expires on June 15, 2020. The Letter of
Credit may be drawn down by Glazer upon its sale of shares of common stock of
the Company pursuant to the terms and conditions set forth in the Forward Share
Purchase Agreement. The Letter of Credit is secured by cash in the amount of
$9,314,403.16, which is held in a deposit account at EagleBank. The cash held in
the deposit account had previously been held in an escrow account with
Continental Stock Transfer & Trust Company ("Continental"). The initial amount
in the escrow account was to be up to $10.68 million given the maximum number of
shares that Glazer could hold subject to the Forward Share Purchase Agreement,
but because Glazer actually held 922,933 shares at the time that the business
combination with Kaleyra S.p.A. occurred on November 25, 2019 (the "Business
Combination Closing"), the corresponding amount of $9,858,678.013 was placed
into the escrow account with Continental. That amount has since then been
reduced in accordance with the terms of the Forward Share Purchase Agreement to
$9,314,403.16 following Glazer's sale in the open market of 50,953 shares of
common stock of the Company following the Business Combination Closing.
The issuance fee for the Letter of Credit is 1% of the stated amount of the
Letter of Credit, one-half of which was paid by the Company upon the issuance of
the Letter of Credit and the remaining one-halfwill be due and payable at the
time of any extension of the June 15, 2020 expiration date. The Letter of Credit
and Reimbursement Agreement contains customary covenants applicable to the
Company, including the requirement that the Company assign, pledge and grant a
security interest to EagleBank in the Company's rights, title and interest in
and to the deposit account via an assignment and pledge agreement. The Letter of
Credit and Reimbursement Agreement also contains customary representations and
warranties and events of default for credit arrangements of this type.
This summary is qualified in its entirety by reference to the text of the Letter
of Credit and Reimbursement Agreement, which is included as Exhibit 10.1 to this
Current Report on Form 8-K and is incorporated herein by reference.
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 above in Item 1.01 of this Current Report regarding the
Letter of Credit and Reimbursement Agreement is incorporated by reference
herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit
Number Description
Letter of Credit and Reimbursement Agreement, dated January 7,
10.1 2020, by and between Kaleyra, Inc. and EagleBank.
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KALEYRA, INC. 
