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RMGN > SEC Filings for RMGN > Form 8-K on 25-Apr-2013All Recent SEC Filings

Show all filings for SCG FINANCIAL ACQUISITION CORP. | Request a Trial to NEW EDGAR Online Pro

Form 8-K for SCG FINANCIAL ACQUISITION CORP.


25-Apr-2013

Entry into a Material Definitive Agreement, Completion of Acquisi


Item 1.01. Entry into a Material Definitive Agreement.

Senior Credit Agreement

On April 19, 2013, SCG entered into a Credit Agreement by and among SCG and certain of SCG's direct and indirect domestic subsidiaries party thereto from time to time as borrowers (the "Borrowers"), certain of SCG's direct and indirect domestic subsidiaries party thereto from time to time as guarantors (the "Guarantors" and, together with the Borrowers, collectively, the "Loan Parties"), the financial institutions from time to time party thereto as lenders (the "Senior Lenders"), Kayne Anderson Credit Advisors, LLC, as administrative agent (the "Senior Administrative Agent"), and Comvest Capital II, L.P., as Documentation Agent (the "Senior Credit Agreement"). The Senior Credit Agreement provides for a five-year $24 million senior secured term loan facility (the "Senior Credit Facility"), which was funded in full on April 19, 2013. The Senior Credit Facility is guaranteed jointly and severally by the Guarantors, and is secured by a first-priority security interest in substantially all of the existing and future assets of the Loan Parties (the "Collateral").

The Senior Credit Facility will bear interest at a rate per annum equal to the Base Rate plus 7.25% or the LIBOR Rate plus 8.5%, at the election of the Borrowers. If an event of default has occurred and is continuing under the Senior Credit Agreement, the interest rate applicable to borrowings under the Senior Credit Agreement will automatically be increased by 2% per annum. The "Base Rate" and the "LIBOR Rate" are defined in a manner customary for credit facilities of this type. The LIBOR Rate is subject to a floor of 1.5%.

SCG is required to make quarterly principal amortization payments in the amount of $600,000 (subject to adjustment as provided in the Senior Credit Agreement), with the first such amortization payment due on July 1, 2013. Subject to certain conditions contained in the Senior Credit Agreement, SCG may prepay the principal of the Senior Credit Facility in whole or in part. In addition, SCG is required to prepay the principal of the Senior Credit Facility (subject to certain basket amounts and exceptions) in amounts equal to:

? 50% of the "Excess Cash Flow" of SCG and its subsidiaries for each fiscal year (as defined in the Senior Credit Agreement);

? 100% of the net cash proceeds from asset sales, debt issuances or equity issuances by SCG or any of the other Loan Parties; and

? 100% of any cash received by SCG or any of the other Loan Parties not in the ordinary course of business (excluding cash from asset sales and debt and equity issuances), net of reasonable collection costs.

SCG will not be required to make any mandatory prepayment to the extent that, after giving effect to such mandatory prepayment, the unrestricted cash on hand of the Loan Parties would be less than $5 million. The amount of any mandatory prepayment not prepaid as a result of the foregoing sentence will be deferred and shall be due and owing on the last day of each month thereafter, but in each case solely to the extent that unrestricted cash on hand of the Loan Parties would exceed or equal $5 million after giving effect thereto.

In the event of any mandatory or optional prepayment under the Senior Credit Agreement or the termination of the Senior Credit Agreement prior to April 19, 2018, SCG will be required to pay the Lenders a prepayment fee equal to the following percentage of the amount repaid or prepaid: 3% if such prepayment or termination occurs prior to April 19, 2014; 2% if such prepayment or termination occurs prior to April 19, 2015; and 1% if such prepayment or termination occurs prior to April 19, 2016. Amounts repaid or prepaid under the Senior Credit Agreement will not be available for borrowing.

The Senior Credit Agreement includes customary representations and warranties, restrictive covenants, including covenants limiting the ability of SCG to incur indebtedness and liens; merge with, make an investment in or acquire any property or assets of another entity; pay cash dividends; repurchase shares of its outstanding stock; make loans and other investments; dispose of assets (including the equity securities of its subsidiaries); prepay the principal on any subordinate indebtedness; enter into certain transactions with its affiliates; or change its principal business (in each case, subject to certain basket amounts and exceptions). The Senior Credit Agreement also includes customary financial covenants, including minimum Consolidated EBITDA (as defined in the Senior Credit Agreement) requirements, and maximum leverage ratios, . . .



Item 2.01. Completion of Acquisition or Disposition of Assets.

The information set forth in the Introduction of this Current Report on Form 8-K is incorporated into this Item 2.01 by reference. The summary of the Merger Agreement contained in the Offer to Purchase under the caption "The Symon Merger Agreement" is incorporated herein by this reference. The description of the terms of the Merger Agreement is qualified in its entirety by reference to the complete text of the Merger Agreement included as Exhibit 2.1 of this Current Report on Form 8-K and incorporated herein by reference.


At the effective time of the Merger, the former holders of Symon's outstanding Class L Common Stock, par value $0.01 per share, Class A Common Stock, par value $0.01 per share, and Class A Non-Voting Common Stock, par value $0.01 per share, received an aggregate amount of $45 million, less (i) approximately $1.7 million of Symon's transaction expenses which were paid by SCG at the closing; and (ii) an expense fund of $250,000, which was paid by SCG to the Stockholder Representative to be held in trust as a source of reimbursement for costs and expenses incurred by the Stockholder Representative in such capacity. For more information regarding the consideration paid to Symon's former stockholders as a result of the Merger, see the information included in the Offer to Purchase under the caption "The Symon Merger Agreement-Structure of the Symon Merger; Consideration to be Paid." SCG used a combination of its cash on hand and the proceeds from the First Lien Loan and the Junior Loans to pay the cash merger consideration payable to Symon's former stockholders.



Item 2.03. Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 of this Current Report on Form 8-K with respect to the First Lien Credit Agreement and the Junior Credit Agreement is incorporated herein by reference.



Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 of this Current Report on Form 8-K with respect to the issuance of the Junior Loan Shares and the DRW Shares is incorporated into this Item 3.02 by reference.



Item 8.01. Other Events.

On April 19, 2013, SCG issued a press release announcing the completion of the Merger. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.



Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

Pursuant to Item 9.01(a)(4) of Form 8-K, SCG intends to file all financial statements required by this item by an amendment to this Current Report on Form 8-K to be filed within 71 calendar days after the date this Current Report on Form 8-K must be filed.

(b) Pro Forma Financial Information.

Pursuant to Item 9.01(b)(2) of Form 8-K, SCG intends to file all pro forma financial information required by this item by an amendment to this Current Report on Form 8-K to be filed within 71 calendar days after the date this Current Report on Form 8-K must be filed.

(d) Exhibits.

The following exhibits are filed herewith or incorporated by reference herein:

 Exhibit No.                                  Description

     2.1        Agreement and Plan of Merger, dated as of March 1, 2013, by and among
                SCG Financial Acquisition Corp., SCG Financial Merger II Corp., Reach
                Media Group Holdings, Inc. and Shareholder Representative Services LLC,
                solely in its capacity as stockholder representative. (1)

    99.1        Press Release, dated April 19, 2013 *


______________________

(1) Incorporated by reference to the Current Report on Form 8-K filed by SCG on March 1, 2013.


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