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): July 27, 2006
MOBILITY ELECTRONICS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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0-30907
(Commission File Number)
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86-0843914
(IRS Employer Identification No.) |
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17800 N. Perimeter Dr., Suite 200, Scottsdale, Arizona
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85255 |
(Address of Principal Executive Offices)
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(Zip Code) |
(480) 596-0061
(Registrants telephone number, including area code)
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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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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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On July 27, 2006, Mobility Electronics, Inc. (Mobility), a Delaware corporation, entered
into a Credit Agreement (the Credit Agreement) with JPMorgan Chase Bank, N.A. (the
Lender). Mobility entered into the Credit Agreement which allows for a $10 million
revolving line of credit for general corporate purposes and replaces its current credit agreement
which expires by its terms on July 31, 2006.
Loans outstanding under the Credit Agreement bear interest, at Mobilitys election, either at
the alternate base rate (the prime rate) or at the adjusted LIBOR rate for Eurodollar advances
(LIBOR plus 2.0%). In addition, Mobility will pay a quarterly facility fee of 12.5 basis points
on any unused portion of the revolving loan commitment.
The Credit Agreement contains customary restrictive and financial covenants, including
financial covenants requiring minimum EBITDA levels which are typical of agreements of this type,
as well as customary events of default. The obligations of the Lender to make advances under the
Credit Agreement are subject to the ongoing accuracy of Mobilitys representations and warranties
under the Credit Agreement and the absence of any events which would be defaults or constitute a
material adverse effect. Borrowings under the credit facility are also subject to a borrowing base
composed of percentage advance rates against Mobilitys eligible accounts receivable and eligible
inventory.
Mobility has no borrowings outstanding under the Credit Agreement as of this time.
The Credit Agreement was supplemented by Pledge and Security Agreements with each of Mobility
California, Inc., Mobility Idaho, Inc., Mobility Texas, Inc. and iGo Direct Corporation, all
wholly-owned subsidiaries of Mobility (collectively, the Subsidiaries), each dated as of
July 27, 2006 (the Security Agreements). Under the Security Agreements, each of the
Subsidiaries respectively granted a security interest in certain collateral for the benefit of the
Lender.
The obligations of Mobility under the Credit Agreement are guaranteed pursuant to Continuing
Guarantees signed by each of the Subsidiaries (the Guarantees), each dated as of July 27,
2006.
Copies of the Credit Agreement and forms of the Guarantees and the Security Agreements are
filed as exhibits to this report as Exhibits 10.1, 10.2 and 10.3 and are incorporated herein by
reference. The descriptions above are summaries of the Credit Agreement, form of Guarantee and
form of Security Agreement, and are qualified in their entirety by the complete text of the
agreements.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
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Exhibit No. |
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Description |
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Exhibit 10.1
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Credit Agreement dated as of July 27, 2006, between Mobility Electronics,
Inc. and JPMorgan Chase Bank, N.A. |
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Exhibit 10.2
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Form of Pledge and Security Agreement dated as of July 27, 2006, between
JPMorgan Chase Bank, N.A. and each of Mobility California, Inc., Mobility Idaho,
Inc., Mobility Texas, Inc. and iGo Direct Corporation. |
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Exhibit 10.3
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Form of Continuing Guarantee dated July 27, 2006 by each of Mobility
California, Inc., Mobility Idaho, Inc., Mobility Texas, Inc. and iGo
Direct Corporation in favor of JPMorgan Chase Bank, N.A. |