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SAVY > SEC Filings for SAVY > Form 8-K on 2-Nov-2012All Recent SEC Filings

Show all filings for SAVEDAILY INC



Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligati

Item 1.01 Entry into a Material Definitive Agreement.

SaveDaily, Inc. (the "Company"), along with, Inc., a wholly-owned subsidiary of the Company, previously disclosed that on March 28, 2012 it entered into a financing agreement (the "Financing and Security Agreement") with SaveDaily Partners, L.P., a Delaware limited partnership (the "Lender"), pursuant to which the Lender agreed to fund up to $3,000,000 of which an aggregate of $1,250,000 was funded as of April 13, 2012. The Financing and Security Agreement was subsequently replaced by a new financing agreement on June 27, 2012 (the "June Agreement"). The June Agreement between the Company and the Lender provides the Company with up to an additional $1,000,000 in funding ($4,000,000 in total versus $3,000,000 in the original Financing Agreement). The June agreement also adjusted the operating profit covenant to exclude expenses related to non-cash equity compensation.

Due to stronger than expected growth, the Company and Lender have agreed to modify the June Agreement. On October 17, 2012, the Company approved an Addendum to the June Agreement (the "Addendum") pursuant to which the Lender will waive all covenants and interest from July 1, 2012 until January 1, 2014. Management believes that these modifications will give them the flexibility necessary to adequately prepare for growth in the number of accounts, partners, and assets under management. In addition, the Addendum amends the Lender's conversion price to $0.25 per share, which was the price of the Company's stock at the time the Addendum was executed.

The foregoing descriptions of the June Agreement and Addendum do not purport to be a complete statement of the agreements or of the parties' rights and obligations under these agreements. The above descriptions are qualified in their entirety by reference to the June Agreement and Addendum.

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

The Company previously disclosed that on September 7, 2011, Melvin McGaughy ("McGaughy") filed a complaint in United States District Court, Central District of California (the "McGaughy Lawsuit") against Harry S. Dent, Jr. ("Dent") for breach of personal guaranty and the Company agreed to pay the costs of Dent's defense pursuant to the Company's Bylaws. On July 23, 2012, Judge James V. Selna granted a Motion for Summary Judgment in favor of the Plaintiff in the total amount of $903,607.26, plus attorneys' fees and costs, against Dent.

On October 17, 2012, pursuant to its Bylaws, the Company resolved to indemnify Dent for the judgment rendered in the McGaughy Lawsuit (the "Judgment"). Contemporaneously, SaveDaily Partners, L.P., a Delaware limited partnership, has agreed to provide the necessary funds to satisfy the Judgment through a securities purchase agreement of 7,325,000 shares of the Company's common stock ("SPA"). The Company expects to pay the full Summary Judgment within 90 days, at which time the case will be closed and McGaughy will have no right to seek further claims related to this case. For further information about the SPA, please see the disclosures under Item 3.02 below, which is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

On October 17, 2012, the Company agreed to enter into a securities purchase agreement ("SPA") with SaveDaily Partners, L.P., pursuant to which the Company would receive $1,250,000 in exchange for 7,325,000 shares of the Company's common stock. The SPA provides, in relevant part, that the proceeds are to be used exclusively to satisfy the Judgment in the McGaughy Litigation.

For further information about the McGhaughy Litigation, please see the disclosures under Item 2.03 above, which is incorporated herein by reference.

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