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WASHINGTON, DC, June 30, 2015 /CNW/ - Cricket Media Group Ltd. (TSXV:CKT) ("Cricket Media" or the "Company") announces that in connection with the Company's debt restructuring as described in its news release dated April 6, 2015, Cricket Media, Inc., a wholly-owned subsidiary of the Company ("CMI") has entered into a loan and security agreement (the "Loan Agreement") with The National Capital Bank of Washington ("NCBW") pursuant to which CMI has borrowed the principal amount of US$1,425,000 (the "NCBW Indebtedness") for the purpose of refinancing indebtedness previously owed to NCBW by ePals Foundation, Inc. an entity which CMI controls, pursuant to a commercial line of credit with NCBW. Interest on the outstanding principal balance of the NCBW Indebtedness accrues at a rate of 5% per annum and CMI will make monthly payments of principal and interest of approximately US$27,000. The loan matures on June 30, 2020 whereupon all amounts owing to NCBW thereunder are due and payable. The Company is continuing with the overall implementation of its debt restructuring.
In connection with the refinancing, Miles Gilburne and Nina Zolt, each a director of the Company (together, the "Guarantors"), have provided a personal guaranty to NCBW in respect of the NCBW Indebtedness and CMI has entered into a reimbursement agreement with the Guarantors pursuant to which CMI has agreed to reimburse the Guarantors for amounts that may be paid by the Guarantors to NCBW in connection with such guaranty. The NCBW Indebtedness ranks junior to all existing indebtedness of the Company and its subsidiaries, other than an aggregate of US$3,353,000 that is owed to entities controlled by the Guarantors pursuant to the Company's 10% secured convertible debentures issued pursuant to a trust indenture dated March 20, 2013, which amount ranks pari passu with the NCBW Indebtedness.
The Company also announces that the terms of a revolving loan facility provided by ZG Ventures, LLC in favour of CMI have been amended to extend the repayment date of all outstanding principal and interest from June 30, 2015 to September 30, 2015. Pursuant to the loan facility, CMI is entitled to borrow up to a maximum of US$3,500,000 from ZG Ventures, LLC.
Pursuant to Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the entering into of the reimbursement agreement and the extension to the revolving loan facility each constitutes a "related party transaction" for the Company. For these transactions the Company is relying on the exemption from the formal valuation requirements of MI 61-101 contained in section 5.5(b) of MI 61-101 on the basis that no securities of the Company are listed on a specified market set out in such section and the Company is relying on the exemption from the minority shareholder approval requirements of MI 61-101 contained in Section 5.7(1)(e) of MI 61-101 on the basis of meeting the financial hardship exemption requirements.
About Cricket Media
Cricket Media (TSXV: CKT) is an education media company that provides award-winning content on a safe and secure learning network for children, families and teachers across the world. Cricket Media's 14 popular media brands for toddlers to teens include Babybug, Ladybug, Cricket® and Cobblestone® with multiple language editions and apps in English, Spanish and Chinese. The Company's innovative web-based K12 tools for school and home include the ePals community and virtual classroom for global collaboration as well as In2Books®, a Common Core eMentoring program that builds reading, writing and critical thinking skills. Cricket Media serves approximately one million classrooms and millions of teachers, students and parents in over 200 countries and territories through its platform and NeuPals, its joint venture with China's leading IT services company Neusoft. Cricket Media also licenses its content and platform to top publishing and educational companies worldwide. For more information, please visit www.Cricketmag.com, www.ePals.com and www.In2Books.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This news release contains statements that may constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by the Company and described in the forward-looking statements contained in this press release. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive therefrom. The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
SOURCE Cricket Media Inc.
For further information: Katya Andresen, Chief Executive Officer, Cricket Media, Phone: (703) 885-3400, [email protected]; Cory Pala, Investor Relations, E.vestor Communication Inc., Phone: (416) 657-2400, [email protected]