Tangelo Games Enters into Waiver and Amendment to Credit Agreement
Toronto, January 10, 2017 – Tangelo Games Corp. (“Tangelo” or the “Company”) (TSX-VENTURE: GEL), a leading developer and operator of social casino games, has reached an agreement with its lenders to amend certain terms of its outstanding credit agreement. Tangelo previously completed a secured debt financing pursuant to an amended and restated credit agreement dated November 16, 2015, which amended the terms of a prior credit agreement dated January 30, 2015, as amended (together, the “Credit Agreement”) among the Company, as borrower, the subsidiaries of Tangelo, as credit parties, a syndicate of lenders (the “Lenders”), and the Lenders’ administrative agent, Third Eye Capital Corporation (“TEC”).
The Company and its subsidiaries have entered into a waiver and amendment (the “Amendment”) to the Credit Agreement with TEC, on behalf of the Lenders, waiving breaches by the Company of certain covenants and amending the covenant thresholds for future periods. Pursuant to the Amendment, Tangelo’s obligations to repay principal of US$14 million on or before December 31, 2016 has been amended and the Company is now obligated to pay the greater of US$10 million and 90% of the proceeds of any equity or M&A transaction completed by Tangelo on or before March 31, 2017. No other repayment of principal will be due under the Credit Agreement until the facility matures. TEC also agreed to amend the current ratio, minimum cash, average daily active user and unique buyer covenants for the periods from December 31, 2016 to March 31, 2017. As consideration for these amendments, among other things, the Company agreed to pay to the Lenders a US$200,000 fee. Additionally, the Company has agreed to amend the exercise price for 35,000,000 non-transferrable warrants (the “Warrants”) issued by the Company to the Lenders to a price equal to the closing price of the Company’s common shares for the 10 trading days prior to this announcement (or as determined in accordance with the policies of the TSX Venture Exchange) in connection with the announcement of the Amendment. The Amendment is subject to certain conditions, including, but not limited to, approval by the TSX Venture Exchange of the amendment to the exercise price for the Warrants.