PATHFINDER ACQUISITION CORPORATION Item 1.01 Entry into a Material Definitive Agreement
Equity Grant Agreement
On
In connection with the Business Combination Agreement, Pathfinder, Merger Sub,
Pursuant to the Equity Grant Agreement, Pathfinder has agreed to grant 1,000,000
shares of New Movella Common Stock to the Grantees on the closing date of the
Transaction (the "Closing Date"). Pathfinder's obligations to make the equity
grant pursuant to the Equity Grant Agreement are subject to, among other things,
the Grantees acquiring
A copy of the Equity Grant Agreement is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by reference, and the foregoing description of the Equity Grant Agreement is qualified in its entirety by reference thereto. The Equity Grant Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Equity Grant Agreement or other specific dates, as specified therein. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties, including for the purpose of allocating risk among the parties rather than establishing matters as facts, and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement.
Transaction Support Agreement
On
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A copy of the Transaction Support Agreement is filed with this Current Report on Form 8-K as Exhibit 10.2 and is incorporated herein by reference, and the foregoing description of the Transaction Support Agreement is qualified in its entirety by reference thereto. The Transaction Support Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Transaction Support Agreement or other specific dates, as specified therein. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties, including for the purpose of allocating risk among the parties rather than establishing matters as facts, and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement.
Item 8.01 Other Events Note Purchase Agreement
In connection with the Commitment Letter, on
The obligations of Movella under the Note Purchase Agreement are guaranteed by certain of its subsidiaries and secured by substantially all of Movella's and such subsidiaries' assets. Upon consummation of the Merger, New Movella will also be required to become a secured guarantor of the obligations under Note Purchase Agreement.
The commitment to provide the VLN Facility terminates upon the earliest to occur
of (i) the termination of the Business Combination Agreement in accordance with
its terms prior to the Closing Date and (ii)
The proceeds of the Pre-Close Facility were used, in part, to refinance certain existing debt of Movella and its subsidiaries and to pay a portion of the transaction expenses associated with the financing arrangements contemplated by the Commitment Letter (the "FP Financing"), with the remaining proceeds available for growth and working capital and general corporate purposes. A portion of the proceeds of the VLN Facility will be used on the Closing Date to refinance the Pre-Close Facility and to pay transaction expenses associated with the FP Financing. After the Closing, the remaining proceeds of the VLN Facility will be available growth and working capital and general corporate purposes.
Interest Rates and Contractual Return
The interest rate per annum applicable to notes under the Note Purchase
Agreement is 9.25%; provided, however, if the VLN Termination Date occurs,
interest on the notes evidencing the Pre-Close Facility will bear interest at
Movella's option, at either an alternate base rate plus an applicable margin
initially of 8.25% per annum or a term SOFR rate, plus an applicable margin
initially of 9.25% per annum. The applicable margin on the notes evidencing
Pre-Close Notes increases by 0.50% in each year on the
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repayment of notes (subject however, in certain cases, to the payment of a contractual return, if such contractual return is greater than the amount of all accrued and unpaid interest (other than default interest, if any)). Subject to certain exceptions in connection with certain qualified refinancing events and the repayment of the Pre-Close Facility on the Closing Date, on the date of any voluntary or mandatory prepayment or acceleration of the notes under the Note Purchase Agreement, a scheduled contractual return is required to be paid, if greater than the amount of all accrued and unpaid interest (other than default interest, if any). When such contractual return is paid, such contractual return will be deemed to constitute payment of all accrued and unpaid interest (other than default interest, if any) on the principal amount of notes so prepaid, repaid or accelerated, as applicable, including all interest on the notes that was previously paid in kind. After the Closing, New Movella will have the right, subject to certain exceptions, to cause the Grantees (or their permitted assignees) to sell all or a portion of the shares purchased by such entities in the Tender Offer and the Private Placement at any time in its sole discretion over the life of the VLN Facility, and a percentage of the proceeds (which percentage is a function of when proceeds are generated, based on a predetermined schedule with a sliding scale) of any such sale shall be applied as a credit against the outstanding obligations under of the VLN Facility upon a repayment of the VLN Facility in full or a refinancing event.
Amortization and Prepayments
If the VLN Termination Date occurs, the maturity of Pre-Close Facility will be
Certain Covenants and Events of Default
The Note Purchase Agreement contains a number of covenants that, among other things, restrict, in each case subject to certain exceptions, Movella's and its subsidiaries (and after the Closing, New Movella) to:
• create, assume or suffer to exist liens and indebtedness;
• make investments;
• engage in mergers or consolidations, liquidations, divisions or the
disposal of all or substantially all of such person's assets;
• make dispositions or have subsidiaries that are not wholly-owned;
• declare or make dividends or other distributions or certain restricted
payments to or on account of equity holders, or prepay indebtedness;
• make material changes to its line of business;
• engage in affiliate transactions; and
• after the Closing Date, permit New Movella to conduct or engage in any
business or operations, other than in its capacity as a holding company
and activities incidental thereto.
The Note Purchase Agreement also contains a financial covenant requiring Movella
and its subsidiaries (or, after the Closing, New Movella and its subsidiaries)
to achieve positive EBITDA on a consolidated basis, commencing with the last day
of the fiscal quarter ending
The Note Purchase Agreement contains customary events of default, including nonpayment of principal, interest or other amounts; material inaccuracy of a representation or warranty; violation of specific covenants identified in the Note Purchase Agreement; cross default and cross-acceleration to material indebtedness; bankruptcy and insolvency events; unsatisfied material judgments; actual or asserted invalidity of the Note Purchase Agreement, related note documents or other material documents entered into in connection with FP Transactions, and events specified to be a change of control.
A copy of the Note Purchase Agreement is filed with this Current Report on Form 8-K as Exhibit 10.3 and is incorporated herein by reference, and the foregoing description of the Note Purchase Agreement is qualified in its entirety by reference thereto. The Note Purchase Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Note Purchase Agreement or other specific dates, as specified therein. The assertions embodied in those representations, warranties and covenants were made for
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purposes of the contract among the respective parties, including for the purpose of allocating risk among the parties rather than establishing matters as facts, and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Note Purchase Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly, and are subject to a contractual standard of materiality different from that generally applicable to shareholders.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit Number Description 10.1 Equity Grant Agreement, dated as ofNovember 14, 2022 , by and amongPathfinder Acquisition Corp. ,FP Credit Partners II, L.P. andFP Credit Partners Phoenix II, L.P. 10.2 Transaction Support Agreement, dated as ofNovember 14, 2022 , by and amongPathfinder Acquisition Corp. ,Movella Inc. ,Pathfinder Acquisition LLC ,FP Credit Partners II, L.P. andFP Credit Partners Phoenix II, L.P. 10.3† Note Purchase Agreement, dated as ofNovember 14, 2022 , by and amongMovella, Inc. ,Movella Technologies N.A. Inc. ,Movella Canada Company ,Griffin Holdings Limited ,Kinduct Technologies Inc. ,Wilmington Savings Fund Society , FSB,FP Credit Partners II AIV, L.P. andFP Credit Partners Phoenix II AIV, L.P. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
† Certain of the exhibits and schedules to this exhibit have been omitted in
accordance with Regulation S-K Item 601(b)(2). The Registrant agrees to
furnish supplementally a copy of all omitted exhibits and schedules to the
SEC upon its request.
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