Summary of Terms for $4,000,000 Revolving Credit Facility between uWink, Inc. and Mellon HBV Alternative Strategies LLC

Summary

uWink, Inc. is entering into a $4,000,000 revolving credit facility with Mellon HBV Alternative Strategies LLC. $2,000,000 will be drawn at closing to help acquire assets from Sega Gameworks LLC, with the rest available for working capital and corporate needs. The loan is secured by all company assets and matures in three years. The agreement includes standard financial and non-financial covenants, conditions for additional draws, and events of default. Mellon HBV may assign the loan to approved financial institutions. The agreement is governed by New York law.

EX-1.2 3 uwink_8kex-annexb.txt EXHIBIT 1.2 ANNEX B ------- SUMMARY OF TERMS FOR DEBT FINANCING THE BORROWER uWink, Inc. (the "Company") THE LENDER Mellon HBV Alternative Strategies LLC and/or its affiliates and assigns ("Mellon HBV") REVOLVING CREDIT FACILITY $4,000,000 revolving credit facility, $2,000,000 of which shall be drawn at closing (the "Initial Draw"). INTEREST RATE LIBOR plus 600 basis points calculated on the basis of actual number of days elapsed in a 360 day year. FACILITY FEE A Facility Fee of $80,000 shall be payable at closing. USE OF PROCEEDS The Initial Draw shall be used to fund a portion of the final acquisition price of substantially all of the assets of Sega Gameworks LLC (the "Target Assets"). All other amounts available under the Revolving Credit Facility shall be used for working capital and other corporate purposes. MATURITY The Revolving Credit Facility shall terminate and all amounts outstanding thereunder shall be due and payable on the date that is three years after the closing. COLLATERAL The Revolving Credit Facility will be secured by a first priority, perfected security interest in all existing and after-acquired tangible and intangible property of the Company, including, without limitation, the following: (i) all equipment, motor vehicles, furniture and fixtures, general intangibles (including all patents, trademarks, copyrights and other intellectual property), contracts, inventory, accounts receivable, deposit accounts, investment property, investment securities, intercompany notes, financial assets, (ii) the equity interests of each existing and future subsidiary of the Company, (iii) all existing and after-acquired interests in real property of the Company and its subsidiaries, (iv) the Target Assets, and (v) the proceeds of each of the foregoing. A negative pledge will apply to all assets, subject to agreed upon exceptions. COMMITMENT REDUCTION Upon three business days' prior written notice, the unutilized portion of the commitment under the Revolving Credit Facility may be irrevocably canceled by the Company in whole or in part. CONDITIONS PRECEDENT The closing will be subject to satisfaction TO CLOSING; CONDITIONS of usual and customary conditions precedent, PRECEDENT TO including, but not limited to, the ADDITIONAL DRAWS following: (i) the negotiation, execution and delivery of the Credit Agreement and the other definitive documentation (including satisfactory legal opinions and other customary closing documents) for the Revolving Credit Facility satisfactory to Mellon HBV; (ii) the completion of Mellon HBV's business and legal due diligence review of the Company and the acquisition of the Target Assets to its satisfaction; (iii) the non-occurrence of any material adverse change in the business or prospects of the Company; (iv) the obtaining of all requisite consents, approvals and waivers; (v) a favorable legal opinion of counsel to the Company; and (vi) simultaneous consummation of the acquisition of the Target Assets for a total consideration of no more than $10,000,000. Additional draws will be subject to satisfaction of usual and customary conditions precedent, including, but not limited to, the following: (i) all representations and warranties in the Credit Agreement are true and correct in all material respects as of the date of each draw, and (ii) no default or event of default under the Credit Agreement has occurred and is continuing or would result from such draw. REPRESENTATIONS AND The representations and warranties to be WARRANTIES contained in the definitive documents related to the Revolving Credit Facility shall be usual and customary. NON-FINANCIAL COVENANTS The non-financial covenants shall be usual and customary. These covenants will include: (i) delivery of financial statements, relevant regulatory and/or SEC filings, compliance certificates and notices of default, material litigation, material governmental and environmental proceedings; (ii) corporate existence and compliance with laws; (iii) payment of taxes; (iv) maintenance of insurance; (v) limitation on mergers and sales of assets; (vi) keeping of books; (vii) visitation rights; and (viii) maintenance of, or causing to be in full force and effect, any governmental authorization or approval necessary in connection with the operation by the Company of its business. The Company shall not be obligated to deliver financial statements or SEC filings to the Lender if such financial statements or SEC filings are available through the Edgar system. -2- FINANCIAL The financial covenants shall be usual and COVENANTS customary and shall be mutually acceptable to Mellon HBV and the Company. EVENTS OF DEFAULT The events of default shall be usual and customary and shall include the following (subject to usual and customary grace, cure and notice periods and materiality thresholds): (i) nonpayment of principal, interest, fees or other amounts, (ii) violation of covenants, (iii) inaccuracy of representations and warranties, (iv) cross-default to other debt, (v) bankruptcy and other insolvency events, (vi) unpaid or unstayed judgments in excess of $100,000, (vii) pension and benefits matters, (viii) invalidity of any loan documentation or any lien provided on the Collateral, and (ix) and change of control. ASSIGNMENTS Mellon HBV will be permitted to make assignments in acceptable minimum amounts to eligible financial institutions approved by the Company, which approvals shall not be unreasonably withheld or delayed. GOVERNING LAW New York -3-