- Current report filing (8-K)
September 13 2010 - 5:10PM
Edgar (US Regulatory)
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):
September 7,
2010
CLEAN
ENERGY FUELS CORP.
(Exact Name of Registrant as
Specified in its Charter)
Delaware
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001-33480
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33-0968580
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(State or Other
Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation)
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File Number)
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Identification No.)
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3020 Old
Ranch Parkway, Suite 400, Seal Beach, California
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90740
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(Address of Principal
Executive Offices)
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(Zip Code)
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Registrants telephone
number, including area code:
(562) 493-2804
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 (see
General Instruction A.2. below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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.
Notes and Security Agreement
As
described in the Current Report on Form 8-K of Clean Energy Fuels Corp.
(the
Company
) dated September 7,
2010, on that date the Company, acting through certain of its subsidiaries,
completed its purchase of the advanced natural gas fueling compressor and
related equipment manufacturing and servicing business (the
Acquired Business
) of I.M.W.
Industries Ltd., a British Columbia corporation (
IMW
),
pursuant to the terms of an Asset Purchase Agreement dated July 1, 2010,
as amended (the
APA
). In connection with the closing of this
acquisition, Clean Energy Compression Corp., a British Columbia corporation and
a subsidiary of the Company (
CECC
),
issued the following promissory notes to IMW (collectively the
Notes
): (i) a promissory note
with a principal amount of $12,500,000 that is due and payable on
January 31, 2011, (ii) a promissory note with a principal amount of
$12,500,000 that is due and payable on January 31, 2012, (iii) a
promissory note with a principal amount of $12,500,000 that is due and payable
on January 31, 2013, and (iv) a promissory note with a principal
amount of $12,500,000 that is due and payable on January 31, 2014. Each payment under the Notes will consist of
$5.0 million in cash and $7.5 million in cash and/or shares of the Companys
common stock (the exact combination of cash and/or stock to be determined at
CECCs option). In addition, pursuant to
a Security Agreement executed at closing, the Notes are secured by a
subordinate security interest in the Acquired Business.
HSBC Bank Canada
In
connection with the closing of the Companys acquisition of the Acquired
Business, CECC entered into an Assumption Agreement (the
Assumption
Agreement
) with HSBC Bank Canada (
HSBC
)
pursuant to which CECC assumed the obligations and liabilities of IMW under the
following arrangements with HSBC: (i) an operating line of credit with a
limit of CAD$7,750,000 bearing interest at prime plus 1.25%; (ii) a bank
guarantee line with a limit of CAD$3,000,000, (iii) a forward exchange
contract line with a limit of CAD$13,750,000, (iv) a MasterCard limit with
a maximum amount of CAD$150,000, (v) an operating line of credit with a
limit of 4,000,000 RMB (CAD$593,000) bearing interest at the 6 month Peoples
Bank of China rate plus 2.5%, (vi) a bank guarantee line with a limit of
1,000,000 RMB (CAD$148,000), (vii) a 16,750,000 BDT (CAD$239,000) operating
line of credit bearing interest at 14% and (vii) a 320,000,000 COP
(CAD$166,000) operating line of credit bearing interest at the Colombia
benchmark rate plus 7 to 9% (collectively, the
Lines
of Credit
). The bank
guarantee lines allow CECC to provide guarantees and/or standby letters of
credit to overseas suppliers or bid/performance deposits on contracts. The forward exchange contract line allows
CECC to enter into foreign exchange forward contracts up to the notional limit
of CAD$13,750,000 (no forward exchange contracts were outstanding at September 7,
2010). The Lines of Credit are secured
by a general security agreement providing a first priority security interest in
all present and after acquired personal property of CECC, including specific
charges on all serial numbered goods, inventory and other assets and assignment
of risk insurance (the
Security
).
The Lines of Credit are due on demand and are subject to financial covenants.
The
Assumption Agreement also includes additional financial covenants relating to
CECCs ratio of debt to tangible net worth, tangible net worth and ratio of
current assets to liabilities.
In
connection with the Assumption Agreement, (i) 0884808 B.C. LTD., a British
Columbia corporation and a subsidiary of the Company (
Canadian
AcqCo
), guaranteed CECCs obligations under the Lines of
Credit, (ii) Canadian AcqCo entered into a general security agreement with
HSBC pursuant to which Canadian AcqCo agreed that the Lines of Credit are
secured by a first priority security interest in all of its present and after
acquired personal property, and (iii) Clean Energy, a California
corporation and a subsidiary of the Company (
CE
),
agreed to inject not less than USD$2,000,000 of additional working capital into
CECC.
In
addition, CE and Canadian AcqCo agreed that should the making of any scheduled
payment by CECC to IMW under the Notes result in CECC being in breach of the
Assumption Agreement, the Lines of Credit or the Security, CE and Canadian
AcqCo shall furnish CECC with the necessary funds to enable
2
CECC
to make such payment to IMW and to remain in compliance with the Assumption
Agreement, the Lines of Credit and the Security. Further, CE and Canadian AcqCo agreed that should
CECC make any earn-out payment under the APA, and should the making of such
earn-out payment result in CECC being in breach of the Assumption Agreement,
the Lines of Credit or the Security, then CE and Canadian AcqCo shall furnish
CECC with the necessary funds to enable CECC to make such earn-out payment and
to remain in compliance with the Assumption Agreement, the Lines of Credit and
the Security.
Item 2.03. Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
The information set forth under Item 1.01 is
hereby incorporated by reference into this Item 2.03.
3
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CLEAN
ENERGY FUELS CORP
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Dated:
September 13, 2010
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By:
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/s/
Richard R. Wheeler
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Name:
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Richard
R. Wheeler
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Title:
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Chief
Financial Officer
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4
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