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| GLUU > SEC Filings for GLUU > Form 8-K on 30-Dec-2008 | All Recent SEC Filings |
30-Dec-2008
Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligat
• Releases all funds held in escrow pursuant to the Merger Agreement to the Awaken Holders on or before January 15, 2009 and provides that the Company will no longer be permitted to make claims against the escrow account established under the Merger Agreement;
• Provides that the Company and the MIG Shareholders agreed to release each other from all claims, except for claims related to those representations and warranties that survive for longer than 18 months under Section 11 of the Merger Agreement.
The Earnout Notes
The Earnout Notes require that the Company pay off the principal and interest
in installments with aggregate principal payments scheduled for January 15, 2009
($6,000,000), April 1, 2009 ($3,000,000), July 1, 2009 ($5,000,000), March 31,
2010 ($1,500,000), June 30, 2010 ($1,500,000), September 30, 2010 ($1,500,000)
and December 31, 2010 ($1,500,000). The Earnout Notes are secured by a lien on
substantially all of the Company's assets, and are subordinated to the Company's
obligations to Silicon Valley Bank ("Lender"), the lender under the Company's
Loan and Security Agreement, dated as of February 15, 2007, as amended (the
"Credit Facility"), and any replacement credit facility that meets certain
conditions. The Earnout Notes begin accruing simple interest on April 1, 2009 at
the rate of 7% compounded annually, payable in arrears, and may be prepaid
without penalty.
A change of control of the Company accelerates the payment of principal and
interest under the Earnout Notes.
The Special Bonus Notes
MIG issued the Special Bonus Notes to each of Wang Xin and Wang Bin in the
aggregate principal amount of $5,000,000, in satisfaction of obligations to pay
bonuses under their Employment Agreements. The Special Bonus Notes provide for
cash payments of $937,500 in the aggregate on each of March 31, 2010 and
June 30, 2010, and of $1,562,500 in the aggregate on each of September 30, 2010
and December 31, 2010. The Special Bonus Notes are guaranteed by the Company
under the Guaranty, and the Company's obligations under the Guaranty are secured
by a lien on substantially all of the Company's assets. The Special Bonus Notes
are subordinated to the Credit Facility and any replacement credit facility that
meets certain conditions . The Special Bonus Notes begin accruing simple
interest on April 1, 2009 at the rate of 7% compounded annually, payable in
arrears, and may be paid off in advance without penalty. A change of control of
the Company accelerates the payment of principal and interest under the Earnout
Notes.
The foregoing description of the Restructuring and the Restructuring
Documents is qualified in its entirety by (i) the Amendment Agreement, (ii) the
Earnout Notes, (iii) the Special Bonus Notes, (iv) the Security Agreement and
(v) the Guaranty, copies of which are filed as Exhibits 2.01, 10.01, 10.02,
10.03, 10.04 and 10.05 to this Report and are incorporated into this Item 1.01
by reference.
Amended and Restated Loan and Security Agreement
On December 29, 2008, Glu Mobile Inc. (the "Company") and two of its
subsidiaries, Glu Games Inc. and Superscape Inc., entered into an Amended and
Restated Loan and Security Agreement (the "Credit Facility") with the Lender,
which Credit Facility amends and supersedes that certain Loan and Security
Agreement between the Company and SVB, dated as of February 14, 2007, as
amended. The Credit Facility provides for borrowings of up to $8 million,
subject to a borrowing base equal to 80% of the Company's eligible accounts
receivable. The Company has not drawn down on the Credit Facility as of the date
of this Report.
The Company's obligations under the Credit Facility are guaranteed by certain
of the Company's domestic and foreign subsidiaries and are secured by
substantially all of the Company's assets, including all of the capital stock of
certain of the Company's domestic subsidiaries and 65% of the capital stock of
certain of its foreign subsidiaries.
The interest rate for the Credit Facility is SVB's prime rate, plus 1.0%, but
no less than 5.0%. Interest is due monthly, with all outstanding obligations due
at maturity. The Company must also pay SVB a monthly unused revolving line
facility fee of 35 bps on the unused portion of the $8.0 million commitment. In
addition, the Company must pay SVB a non-refundable commitment fee of $55,000 on
December 29, 2008 and December 29, 2009.
The Credit Facility limits the Company and certain of its subsidiaries'
ability to, among other things, dispose of assets, make acquisitions, incur
additional indebtedness, incur liens, pay dividends and make other
distributions, and make investments .
The Credit Facility requires the Company to establish a separate account at
SVB for collection of its accounts receivables. All deposits into this account
will be automatically be applied by SVB to the Company's outstanding obligations
under the Credit Facility.
In addition, under the Credit Facility, the Company must comply with the
following financial covenants:
(a) Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA"). The Company must maintain, measured on consolidated basis as of the
end of each of the following periods, EBITA of at least the following:
• October 1, 2008 through December 31, 2008: $(1,672,000)
• October 1, 2008 through March 31, 2009: $(2,382,000)
• January 1, 2009 through June 30, 2009: $(812,000)
• April 1, 2009 through September 30, 2009: $1,572,000
• July 1, 2009 through December 31, 2009: $4,263,000
• October 1, 2009 through March 31, 2010: $5,092,000
. . .
No. Description
2.01 First Amendment to Agreement and Plan of Merger dated November 28, 2007,
among Glu Mobile Inc. Maverick Acquisition Corp., a business company
incorporated under the laws of the British Virgin Islands ("Sub"), Awaken
Limited, a business company with limited liability incorporated under the
laws of the British Virgin Islands ("Awaken"), Awaken (Beijing)
Communications Technology Co. Ltd. ( "WFOE"), a wholly foreign-owned
enterprise organized under the laws of the People's Republic of China (the
"PRC"), Beijing Zhangzhong MIG Information Technology Co. Ltd., a domestic
limited liability company organized under the laws of the PRC ("MIG"),
Beijing Qinwang Technology Co. Ltd., a domestic limited liability company
organized under the laws of the PRC ("Qinwang"), each of Wang Bin, Wang
Xin and You Yanli (collectively, the "PRC Shareholders"), and Wang Xin, as
the representative of the shareholders of the Awaken, dated as of December
29, 2008.
10.01 Form of Senior Subordinated Secured Promissory Note, between Glu Mobile
Inc. and each of the former shareholders of Beijing Zhangzhong MIG
Information Technology Co. Ltd., dated as of December 29, 2008.
10.02 Secured Promissory Note in the principal amount of $2,500,000, between
Beijing Zhangzhong MIG Information Technology Co., Ltd. and Wang Bin,
dated as of December 29, 2008.
10.03 Secured Promissory Note in the principal amount of $2,500,000, between
Beijing Zhangzhong MIG Information Technology Co., Ltd. and Wang Xin,
dated as of December 29, 2008.
10.04 Security Agreement, among Glu Mobile Inc., and each of the former
shareholders of Beijing Zhangzhong MIG Information Technology Co. Ltd. and
Wang Xin, dated as of December 29, 2008.
10.05 Guaranty Agreement, among Glu Mobile Inc. Wang Bin and Wang Xin, dated as
of December 29, 2008.
10.06 Amended and Restated Loan and Security Agreement among Silicon Valley
Bank, Glu Mobile Inc., Glu Games Inc. and Superscape Inc., dated as of
December 29, 2008.
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