Attached files
| file | filename |
|---|---|
| EX-99.7 - CYBERDEFENDER CORP | v205030_ex99-7.htm |
| EX-99.4 - CYBERDEFENDER CORP | v205030_ex99-4.htm |
| EX-99.3 - CYBERDEFENDER CORP | v205030_ex99-3.htm |
| EX-99.6 - CYBERDEFENDER CORP | v205030_ex99-6.htm |
| EX-99.1 - CYBERDEFENDER CORP | v205030_ex99-1.htm |
| EX-99.5 - CYBERDEFENDER CORP | v205030_ex99-5.htm |
| EX-99.2 - CYBERDEFENDER CORP | v205030_ex99-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of report (Date of earliest event reported): December 7, 2010
CYBERDEFENDER
CORPORATION
(Exact
name of Company as specified in Charter)
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Delaware
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333-138430
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65-1205833
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(State or other jurisdiction of
incorporation or organization)
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(Commission File No.)
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(IRS Employee Identification No.)
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617
West 7th Street, Suite 1000
Los
Angeles, California 90017
(Address
of Principal Executive Offices)
213-689-8631
(Issuer
Telephone number)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Company under any of the following
provisions (see General Instruction A.2 below).
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)).
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13(e)-4(c))
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant
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The
following discussion provides only a brief description of the agreements and
instruments described below. The discussion is qualified in its
entirety by the full texts of the agreements and instruments.
Effective
as of December 3, 2010, CyberDefender Corporation (the “Company”) and GR Match,
LLC (“GRM”) entered into a Revolving Credit Loan Agreement (the “Loan
Agreement”) pursuant to which GRM has made available to the Company a secured
revolving credit facility in the principal amount not to exceed $5,000,000 (the
“Credit Facility”). The Credit Facility is subject to the terms and
conditions set forth in: (1) the Loan Agreement; (2) a Revolving Credit Note,
dated December 3, 2010, payable by the Company to the order of GRM in the
principal amount of $5,000,000 (the “Revolving Credit Note”); and (3) a Security
Agreement executed by the Company in favor of GRM, effective as of December 3,
2010 (the “Security Agreement” and, together with the Loan Agreement and the
Revolving Credit Note ,collectively, the “Loan
Documents”). Pursuant to the terms and conditions of the Loan
Documents, GRM will advance funds to the Company, and the Company will use the
funds solely for the Company’s payments of amounts owing to GRM pursuant to the
Media and Marketing Services Agreement, dated March 24, 2009, by and between the
Company and GRM, as amended (the “Media Services Agreement”).
The
initial principal amount of the Credit Facility is $4,287,660.05, which is the
total amount of invoices owing by the Company to GRM pursuant to the Media
Services Agreement as of December 3, 2010, and will be repaid in accordance with
the terms of the Loan Documents. Advances made by GRM under the
Credit Facility will not exceed $500,000 per week during the term of the Credit
Facility and will not exceed a maximum total amount of $5,000,000 unless
otherwise agreed to by GRM. All outstanding principal and accrued but
unpaid interest under the Credit Facility is due and payable in full on the
earlier of either March 31, 2011 or the closing of the Company’s sale and
issuance of any debt or equity securities of the Company in an aggregate amount
exceeding $10,000,000 (the “Revolving Credit Expiration
Date”). Interest will accrue on the outstanding principal amount
advanced under the Credit Facility at an annual rate of 10%, and will be
calculated on a per diem basis and added to the principal amount
advanced.
The
Company may repay amounts advanced under the Credit Facility and may request
additional advances from time to time during the term of the Credit Facility,
subject to the maximum total amount of $5,000,000. Simultaneously
with all repayments of outstanding amounts advanced under the Credit Facility,
including repayment of the Credit Facility on the Revolving Credit Expiration
Date, the Company will pay GRM a repayment fee in an amount equal to 10% of the
total amount being repaid or, in the case of an acceleration of the Revolving
Credit Note following an Event of Default (as described below) the principal
amount of the Revolving Credit Note subject to
acceleration.
Pursuant
to the Security Agreement, the Company granted to GRM a second lien priority
security interest in all of the Company’s assets subject only to liens existing
on the original issue date in favor of GRM under: (1) the 9% Secured Convertible
Promissory Note, dated March 31, 2010 (the “Senior Promissory Note”), in the
original amount of $5,300,000, issued by the Company in favor of GRM; (2) the
Loan and Securities Purchase Agreement, dated as of March 31, 2010, by and
between the Company and GRM (the “Loan and Securities Purchase Agreement”); and
(3) the Security Agreement, dated as of March 31, 2010, executed by the Company
in favor of GRM (collectively, the “Senior Loan Documents”). Subject
to certain limited exceptions, any future debt financing by the Company must be
approved by GRM and in all cases must be subordinate to the Credit Facility with
respect to both terms of payment and priority.
2
Upon an
Event of Default (as that term is defined in the Revolving Credit
Note), the interest rate will increase to 15% per annum, and GRM may elect
to: (1) terminate the Credit Facility; (2) declare immediately due and payable
in cash the entire outstanding principal balance, together with any repayment
fees, all accrued but unpaid interest, and any and all other amounts due and
owing; and (3) exercise any and all rights and remedies available to GRM
pursuant to the Loan Documents or under applicable law.
Upon an Event of Default, GRM also has
the right, but not the obligation, in GRM’s sole discretion and at the Company’s
sole cost and expense, to require the Company to retain a consultant or hire a
Company executive who would be senior to the Company’s Chief Executive Officer
and Chief Financial Officer (the “Senior Business Advisor”). The
Senior Business Advisor would oversee the management and operations of the
Company, subject to the direction of the Company’s Board of Directors (the
“Board”). The Senior Business Advisor would report directly to the
Board, and the Company’s existing senior management would report to the Senior
Business Advisor during the tenure of the Senior Business Advisor, which would
be only for the duration of the Event of Default. The Company would:
(1) invite the Senior
Business Advisor to attend all meetings of the Board in a nonvoting
observer capacity and would give the Senior Business Advisor copies of all notices, minutes,
consents and other materials that the Company provides to its directors and officers
at the same time and in the same manner as they are provided to the directors
and officers; and (2) provide the Senior Business Advisor with access to all
financial information of the Company; provided, however, that the
Senior Business Advisor
will agree to hold in
confidence and trust all information so provided and provided further that
the Company will
reserve the right to
withhold any information and to exclude the Senior Business Advisor from any Board meeting or portion
thereof if access to such information or attendance at such meeting could
adversely affect the attorney-client privilege between the Company and its counsel.
3
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Item
1.01
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Entry
into a Material Definitive
Agreement
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The
following discussion provides only a brief description of the agreements and
instruments described below. The discussion is qualified in its
entirety by the full texts of the agreements and instruments.
In
connection with the Credit Facility, and effective as of December 3, 2010, the
Company and GRM entered into a First Amendment to the Senior Promissory Note,
pursuant to which the Senior Promissory Note was amended to provide that the
Company does not have the right to repay the Senior Promissory Note without the
prior written consent of GRM.
In
connection with the Credit Facility, and effective as of December 3, 2010, the
Company and GRM entered into a First Amendment to the Loan and Securities
Purchase Agreement (the “First Amendment”). The First Amendment
amended the Loan and Securities Purchase Agreement as follows. First,
Section 1.1 was amended to add the term “Qualified Offering,” which is defined
as the sale and issuance by the Company of any debt or equity securities of the
Company in an aggregate amount greater than $10,000,000, whether in a single
transaction or a series of related transactions and whether as a private
placement or a sale on any Trading Market (as that term is defined in the Loan
and Securities Purchase Agreement), the closing of which occurs on or prior to
March 31, 2011. Second, Section 5.17 was amended and restated to
provide that, from and after the Company’s fiscal quarter commencing January 1,
2011, the Company’s Debt Coverage Ratio (as that term is defined in the Loan and
Securities Purchase Agreement), determined as of the last day of each fiscal
quarter, is not permitted to be less than a ratio of 2:1 without GRM's prior
written consent; provided, however, that in the event a Qualified Offering
occurs, GRM agrees that Section 5.17 does not apply to the Company’s two (2)
fiscal quarters commencing January 1, 2011 and April 1, 2011. Third,
Section 5.18 was amended and restated to provide that, from and after the
Company’s fiscal quarter commencing January 1, 2011, the Company’s Debt to
Earnings Ratio (as that term is defined in the Loan and Securities Purchase
Agreement) determined as of the last day of each fiscal quarter, is not
permitted to exceed a ratio of 5:1 without GRM's prior written consent;
provided, however, that in the event a Qualified Offering occurs, GRM
acknowledges and agrees that Section 5.18 shall not apply to the
Company’s two (2) fiscal quarters commencing January 2, 2011 and April 1,
2011.
In connection with the Credit Facility,
and effective as of December 3, 2010, the Company and GRM entered into a Fourth
Amendment to the Media Services Agreement (the “Fourth Amendment”), which
amended the Media Services Agreement as follows. First, Section 2.2
was amended and restated to provide that, with respect to any invoice delivered
by GRM to the Company prior to the later of (i) the Company's payment in full of
all amounts outstanding under the Revolving Credit Note or (ii) the expiration
or earlier termination of the term of the Credit Facility, the Company will pay
to GRM the entire portion of the applicable Reimbursement Amount (as that term
is defined in the Media Services Agreement) that is not treated as an Advance
(as that term is defined in the Loan Agreement) not later than fifteen (15) days
after the Company’s receipt of the invoice. Second, Section 2.2 was
amended and restated to provide that, with respect to any invoice delivered by
GRM to the Company following the later of (i) the Company's payment in full of
all amounts outstanding under the Revolving Credit Note or (ii) the expiration
or earlier termination of the term of the Credit Facility, the Company will pay
the applicable Reimbursement Amount to GRM not later than forty-five (45) days
after the Company’s receipt of the invoice. Third, the term of the
Media Services Agreement was extended to December 31, 2013. Fourth,
the provision permitting the Company to terminate the Media Services Agreement
without cause was deleted in its entirety.
On December 13, 2010, the Company
issued a public announcement of the matters described
above.
4
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Item9.01
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Financial
Statements and Exhibits
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Exhibit
99.1
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Revolving Credit Loan Agreement | |
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Exhibit
99.2
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Revolving Credit Note | |
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Exhibit
99.3
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Security Agreement | |
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Exhibit
99.4
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First Amendment to Senior Promissory Note | |
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Exhibit
99.5
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First Amendment to Loan and Securities Purchase Agreement | |
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Exhibit
99.6
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Fourth Amendment to Media Services Agreement | |
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Exhibit
99.7
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Public
Announcement issued December 13,
2010.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Company has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: December
13, 2010
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CYBERDEFENDER
CORPORATION
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By:
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/s/
Kevin Harris
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Kevin
Harris, Chief Financial Officer
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