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ZNGA > SEC Filings for ZNGA > Form 8-K on 24-Jun-2013All Recent SEC Filings

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Form 8-K for ZYNGA INC


Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation o

Item 1.01 Entry into a Material Definitive Agreement

On June 20, 2013, Zynga Inc. (the "Company") entered into a $200.0 million, amended and restated five-year unsecured revolving credit agreement (the "Credit Agreement"). The lenders under the Credit Agreement are Morgan Stanley Senior Funding, Inc., Goldman Sachs Bank USA, Bank of America, N.A. and JP Morgan Chase Bank, N.A. Morgan Stanley Senior Funding, Inc. will continue to act as Administrative Agent. The Credit Agreement amended and restated the $1.0 billion, four-year revolving credit agreement dated as of July 21, 2011, among the Company, the lenders thereto and Morgan Stanley Senior Funding, Inc., as Administrative Agent. The Credit Agreement matures on June 20, 2018, unless otherwise extended in accordance with its terms.

Borrowings under the Credit Agreement bear interest at either the base rate plus an applicable spread or an adjusted LIBOR rate plus an applicable spread, in each case with such spread being determined based on the Company's consolidated leverage ratio for the preceding fiscal twelve-month period. Accrued interest is payable in arrears on the last day of each interest period and, in any event, at least quarterly. A commitment fee ranging from 0.250% to 0.400% on the daily amount of the unused commitments under the Credit Agreement accrues and is payable quarterly in arrears. Principal, together with all accrued and unpaid interest, is due and payable on the maturity date. The Company may prepay the loans and terminate the commitments, in whole or in part, at any time without premium or penalty, subject to certain conditions. Under the Credit Agreement, the Company may request that the aggregate amount of commitments be increased from $200.0 million up to a maximum of $300.0 million. Proceeds of loans made under the Credit Agreement may be used for working capital and general corporate purposes, including stock repurchases and acquisitions. No loans were made under the Credit Agreement at closing.

The Credit Agreement contains customary negative covenants, including covenants that limit or restrict the Company's ability to, among other things, incur indebtedness, grant liens, merge with or consolidate with another entity, dispose of all or substantially all assets and pay dividends or make distributions, in each case subject to customary exceptions for a credit facility of this size and type. The Company is also required to maintain compliance with a capitalization ratio and maintain a minimum cash balance. Repayment on borrowings under the Credit Agreement is guaranteed by certain of the Company's subsidiaries. The Credit Agreement contains customary events of default, including, among others, non-payment defaults, covenant defaults and a change of control default. The occurrence of an event of default could result in loans then outstanding to be due and payable in whole, together with accrued interest thereon and all fees and other obligations. Some of the lenders under the Credit Agreement and their affiliates have various relationships with the Company and its subsidiaries involving the provision of financial services, including cash management, investment banking, foreign exchange and trust services.

The Credit Agreement extends the term of the Company's facility to June 20, 2018 and results in lower annual aggregate commitment fees than the previous facility. The preceding description of the Credit Agreement is a summary only and is qualified in its entirety by reference to the Credit Agreement, which is attached hereto as Exhibit 10.1 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 information in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.                                  Description

10.1              Amended and Restated Revolving Credit Agreement, dated as of July
                  21, 2011 and amended and restated as of June 20, 2013, among
                  Zynga Inc., as Borrower, the Lenders party hereto and Morgan
                  Stanley Senior Funding, Inc., as Administrative Agent.

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