Attached files
| file | filename |
|---|---|
| EX-10.1 - SouthPeak Interactive CORP | v190551_ex10-1.htm |
| EX-99.1 - SouthPeak Interactive CORP | v190551_ex99-1.htm |
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): July 14, 2010 (July 12,
2010)
SouthPeak
Interactive Corporation
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Delaware
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000-51869
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20-3290391
|
||
|
(State
or Other
Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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2900
Polo Parkway
Midlothian,
Virginia 23113
Registrant’s
Telephone Number, Including Area Code: (804) 378-5100
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (See General
Instruction A.2. below):
o Soliciting
material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a-
12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01.
Entry into a Material Definitive Agreement
On July
12, 2010, SouthPeak Interactive, L.L.C. (the “LLC”), a wholly owned
subsidiary of SouthPeak Interactive Corporation (the “Company” or “we”), entered
into a Factoring Agreement with Rosenthal & Rosenthal, Inc. (“R&R”),
(the “Factoring Agreement”). Under the Factoring Agreement, we have agreed
to sell receivables arising from our sales of the LLC’s Inventory to
R&R. In connection with the entry into the Factoring Agreement, each
of the Company, its subsidiaries, Gone Off Deep LLC (“Gone Off Deep”), SouthPeak
Interactive Ltd (“Limited”), and Vid Sub, LLC (“Vid Sub”), and our chairman,
Terry Phillips, have executed guarantees in favor of R&R. In
addition, the Company, Gone Off Deep and Vid Sub each granted to R&R a
security interest against all their respective assets. Prior to the
Factoring Agreement, there was no material relationship between the LLC, the
Company or its affiliates on the one hand, and R&R on the
other.
Under the
terms of the Factoring Agreement, we are selling all of our receivables to
R&R. For the receivables that R&R approves, R&R will
assume the risk of collection for which we have agreed to pay R&R a
commission of .60% of the amount payable under all of our invoices to most of
our customers against a minimum commission of $30,000 multiplied by the number
of months in a contract period, with the first period being 12 months and the
second 7 months. All payments received by R&R are payable to us
after amounts due to R&R are satisfied. Under the Factoring
Agreement, we have the right to borrow against payments due us at the rate of
65% of credit approved receivables. The borrowing rate against
non-credit approved receivables is subject to negotiation. The interest rate on
borrowings is equal to the greater of prime plus 1.5% per annum or 6.5% per
annum. A $10,000,000 loan cap applies against our borrowings, which
cap is subject to an increase of up to $3,000,000 if our stockholders’ equity
increases. The initial term of the Factoring Agreement ends on February
28, 2012.
The
description of the Factoring Agreement and the terms thereof are qualified in
their entirety to the full text of such agreement, which is filed as an exhibit
hereto.
On July
14, 2010, the Company issued a press release regarding the above referenced
transaction. A copy of the press release is furnished herewith as Exhibit
99.1 and is incorporated herein by reference.
Item
1.02.
Termination of a Material Definitive Agreement
As of
July 12, 2010, we repaid in full the entire outstanding balance under that
Loan Agreement with SunTrust Banks, Inc. (“SunTrust”), dated December 16,
2005, among the Company, the LLC, and Limited (collectively, the “Borrowers”),
as amended (the “Loan Agreement”), and related agreements, including but not
limited to the Revolving Note and Security Agreement, each dated
December 16, 2005, and the Addenda to Loan Agreement (collectively, the “Loan
Documents”). As a result of such repayment, (i) each of the Loan
Documents have automatically terminated, (ii) the Bank’s lien or security
interest in the Borrowers’ assets has been terminated, and (iii) all
obligations of the Borrowers under the Loan Documents have been satisfied in
full.
Pursuant
to the Loan Documents, the Company had a $7.5 million revolving line of credit
facility with SunTrust that matured on December 31, 2009, was extended on a
month-to-month basis, and was subsequently renewed and extended pursuant to the
Seventh Addendum to Loan Agreement, dated as of February 11, 2010 (the “Seventh
Amendment”). Pursuant to the Seventh Amendment, the revolving line of
credit facility was increased to $8.0 million, with a new maturity date of
November 30, 2010. The revolving credit line was collateralized by
gross accounts receivable, personal guarantees, and a pledge of personal
securities and assets by two Company shareholders, one of whom is the
Company’s chairman, and certain other affiliates. The agreements and
terms referenced in this Item 1.02 are qualified in their entirety to the full
text of the agreements previously filed as exhibits to the Company’s filings
with the SEC.
On July
14, 2010, the Company issued a press release regarding the above referenced
transaction. A copy of the press release is furnished herewith as Exhibit
99.1 and is incorporated herein by reference.
Item
9.01.
Financial Statements and Exhibits.
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(d)
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Exhibits
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10.1
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Factoring
Agreement by and between Rosenthal & Rosenthal, Inc. and SouthPeak
Interactive, L.L.C., dated as of July 7, 2010.
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99.1
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Press
Release by SouthPeak Interactive Corporation, dated July 14,
2010
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Date:
July 14, 2010
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SouthPeak
Interactive Corporation
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By:
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/s/
Melanie Mroz
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Melanie
Mroz, Chief Executive Officer
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Exhibit
Index
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10.1
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Factoring
Agreement by and between Rosenthal & Rosenthal, Inc. and SouthPeak
Interactive, L.L.C., dated as of July 7, 2010.
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99.1
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Press
Release by SouthPeak Interactive Corporation, dated July 14,
2010
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