Sec Form 13D Filing - Corbin Opportunity Fund L.P. filing for ZeroFox Holdings Inc. (ZFOX) - 2022-05-16

(1)

The Schedule 13G and Amendment No. 1 to Schedule 13G filed by the Reporting Persons on November 30, 2020, and December 14, 2021 stated that Corbin Opportunity Fund, L.P. and Corbin ERISA Opportunity Fund, Ltd. beneficially owned 990,000 and 495,000 Class A Ordinary Shares, respectively.  Due to an inadvertent transposition error, those amounts should have been reversed.

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CUSIP No. G53702109	Page 4

1	NAMES OF REPORTING PERSONS
	Corbin Capital Partners, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a)	☐
				(b)	☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (SEE INSTRUCTIONS)
	OO (See Item 3)
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)				☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER
			0
		8	SHARED VOTING POWER
			1,485,000
		9	SOLE DISPOSITIVE POWER
			0
		10	SHARED DISPOSITIVE POWER
			1,485,000
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	1,485,000
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)				☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	43.3%
14	TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
	IA, PN

Pursuant to a separate amended and restated operating agreement effective as of November 16, 2020 (the “Sponsor Operating Agreement”), each of COF and CEOF separately hold units in, and are non-voting members of, JAR Sponsor LLC (the “Sponsor”), the sponsor of the Issuer.  Pursuant to the Sponsor Operating Agreement, the holders of units in the Sponsor (the “Unitholders”), including COF and CEOF, have agreed that, upon a distribution of proceeds from the Sponsor, and to the extent applicable at the time of such distribution, each such Unitholder shall enter into a written agreement agreeing to be bound by the restrictions set forth in any agreements entered into by the Sponsor in connection with the Issuer’s initial business combination providing for a lockup on transfer of securities of the Issuer held by the Sponsor, prior to receipt of any Sponsor proceeds distributable under the Sponsor Operating Agreement.  Under the Sponsor Operating Agreement, the voting members in the Sponsor will cause a distribution to be made as promptly as practicable giving effect to any contractual restrictions and, in any event, within thirty (30) days following the date on the earliest of: (A)(1) one year after the completion of the Issuer’s initial business combination, (2) the date beginning not sooner than 150 days after the closing of the Issuer’s initial business combination after which the closing price of the Issuer’s Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading-day period or (3) the date following the completion of the Issuer’s initial business combination on which the Issuer completes a liquidation, merger, stock exchange or other similar transaction that results in all of the Issuer’s stockholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property, or (B) such later date as may be set forth in any other agreement between such person and the Issuer or the Sponsor.

Except as described in Item 4 and this Item 6, and as set forth in the exhibits hereto, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between any of the persons named in Item 2 and any person with respect to the securities of the Issuer, including, without limitation, the transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies or any pledge or contingency, the occurrence of which would give another person voting or investment power over the securities of the Issuer.

Concurrently with the December 17, 2021 execution of the Business Combination Agreement, each of COF and CEOF separately entered into a subscription agreement with the Issuer (each a “Common Equity Subscription Agreement” and together, the “Common Equity Subscription Agreements”).  Pursuant to the Common Equity Subscription Agreements, COF and CEOF separately agreed to subscribe for and purchase, and the Issuer agreed to issue and sell to COF and CEOF, on the Closing Date (as defined in the Business Combination Agreement), 250,000 and 500,000 shares of the Issuer’s Common Stock, respectively, in exchange for an aggregate purchase price of $2,500,000 and 5,000,000, respectively (the “Common Equity PIPE Financing”).

   

The closing of the Common Equity PIPE Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Common Equity Subscription Agreements provide that the Issuer will grant the investors in the Common Equity PIPE Financing, including COF and CEOF, certain customary registration rights.

The Common Equity Subscription Agreement separately provides that none of the investor nor its controlled affiliates or any person or entity acting on behalf of the investor or pursuant to the direction of the investor will (i) engage in any transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or similar instrument, including without limitation equity repurchase agreements and securities lending arrangements, however described or defined) that has, or is designed or int ended to have, or that could reasonably be expected to lead to or result in a sale, loan, pledge or other disposition or transfer by any person (whether the investor or any other person) that is reasonably expected to have, the same economic effect, on a net basis, to any such person as a “short sale” (as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act) by such person of any economic consequences of ownership (excluding, for the avoidance of doubt, any consequences resulting solely from foreign exchange fluctuations), in whole or in part, directly or indirectly, physically or synthetically, of any Shares or any securities of the Issuer, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of securities of the Issuer, in cash or otherwise, or (ii) publicly disclose the intention to undertake any of the foregoing; provided, however, for the avoidance of doubt, that such prohibitions shall not apply to long sales (including sales of securities held by the investor, its controlled affiliates or any person or entity acting on behalf of, or at the direction of, the investor, or any of its controlled affiliates prior to the date of the Common Equity Subscription Agreement or securities purchased by the investor, its controlled affiliates or any person or entity acting on behalf of, or at the direction of, the investor, in the open market after the date hereof or the hedging of any such securities).

The foregoing description of the Common Equity Subscription Agreements and the Common Equity PIPE Financing is subject to and qualified in its entirety by reference to the full text of the form of Common Equity Subscription Agreement, a copy of which is attached as Exhibit 99.2 hereto and the terms of which are incorporated herein by reference.

In connection with the December 17, 2021 signing of the Business Combination Agreement, each of COF and CEOF separately entered into a convertible note subscription agreement with the Issuer (each a “Convertible Note Subscription Agreement” and together, the “Convertible Note Subscription Agreements”) in respect of $7,500,000 and 15,000,000 aggregate principal amount of unsecured convertible notes due in 2025 (the “Notes”), respectively, to be issued in connection with the closing of the Business Combination (the “Convertible Notes Financing”). The principal terms of the Notes are set forth in the form of indenture attached as an exhibit to the Convertible Note Subscription Agreements, which indenture shall be entered into by the Issuer, the guarantors party thereto and the indenture trustee (the “Indenture”), and the form of global note attached thereto. The Notes will bear interest at a rate of 7.00% per annum, payable quarterly in cash; provided, that the Issuer may elect to pay interest in kind at 8.75% per annum, and the Notes will be convertible at an initial conversion price of $11.50, subject to customary anti-dilution adjustments, including with respect to stock-splits and stock dividends, dividends and other distributions, above-market tender offers, below-market rights offerings and spin-offs (the “Conversion Price”), and shall mature on the date that is three years following the closing of the Convertible Notes Financing.

 

The post-Business Combination company may, at its election, force conversion of the Notes after the first anniversary of the issuance of the Notes (the “Conversion Trigger Date”), subject to a holder’s prior right to convert, if the volume-weighted average trading price of the post-Business Combination company’s common stock (x) for the first year after the Conversion Trigger Date, is greater than or equal to 150% of the conversion price for more than 20 trading days during a period of 30 consecutive trading days and (y) for the second year after the Conversion Trigger Date, is greater than or equal to 130% of the conversion price for more than 20 trading days during a period of 30 consecutive trading days.

 

Each holder of a Note will have the right to cause the post-Business Combination company to repurchase for cash all or a portion of the Notes held by such holder at any time upon the occurrence of a “fundamental change”, a customary definition provided in the Indenture (a “Fundamental Change”), at a price equal to par plus accrued and unpaid interest.  In the event of a conversion in connection with a Fundamental Change, the Conversion Price will be adjusted by a usual and customary Fundamental Change “make-whole table” to be agreed in the Indenture.

The Indenture will include restrictive covenants that, among other things, will limit the ability of the post-Business Combination company to incur senior debt in excess of $50,000,000, subject to certain qualifications and exceptions set forth in the Indenture. The Indenture also will include customary events of default.

 

The closing of the Convertible Notes Financing is contingent upon, among other things, the substantially concurrent consummation of the Business Combination.  The Issuer has agreed to execute a registration rights agreement for the benefit of the Note Investors, including COF and CEOF, providing for customary demand, shelf and piggyback registration rights and otherwise in form and substance acceptable to the Note Investors and the Issuer.

The foregoing description of the Convertible Note Subscription Agreements and the Convertible Notes Financing is subject to and qualified in its entirety by reference to the full text of the form of Convertible Note Subscription Agreement (including the Indenture exhibited thereto), a copy of which is attached as Exhibit 99.3 hereto and the terms of which are incorporated herein by reference.

	Corbin ERISA Opportunity Fund, Ltd.
	By:	Corbin Capital Partners, L.P.
	Its:	Investment Advisor
	By:	/s/ Daniel Friedman
		Name: Daniel Friedman
		Title: General Counsel

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Name		Principal Occupation
Tracy Stuart		Chief Executive Officer of Corbin Capital Partners, L.P.
Steven Carlino		Chief Financial Officer of Corbin Capital Partners, L.P.
Daniel Friedman		General Counsel of Corbin Capital Partners, L.P.
Craig Bergstrom		Chief Investment Officer of Corbin Capital Partners, L.P.