Attached files
| file | filename |
|---|---|
| EX-10.4 - EX-10.4 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-4.htm |
| EX-10.3 - EX-10.3 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-3.htm |
| EX-10.9 - EX-10.9 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-9.htm |
| EX-10.6 - EX-10.6 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-6.htm |
| EX-10.8 - EX-10.8 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-8.htm |
| EX-99.1 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex99-1.htm |
| EX-10.1 - EX-10.1 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-1.htm |
| EX-10.7 - EX-10.7 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-7.htm |
| EX-10.2 - EX-10.2 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-2.htm |
| EX-10.5 - EX-10.5 - EASYLINK SERVICES INTERNATIONAL CORP | v199614_ex10-5.htm |
United
States
Securities
And Exchange Commission
Washington,
DC 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): October 21, 2010
EasyLink
Services International Corporation
(Exact
Name of Registrant as Specified in Its Charter)
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Delaware
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000-34996
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13-3645702
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(State
or Other Jurisdiction of
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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Incorporation
or organization)
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6025
The Corners Parkway, Suite 100
Norcross,
Georgia 30092
(Address
of Principal Executive Offices)
(Zip
Code)
(678) 533-8000
(Registrant’s
telephone number, including area code)
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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¨
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
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¨
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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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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
1.01 Entry Into a Material Definitive Agreement.
On
October 21, 2010, EasyLink Services International Corporation (the “Company”)
(NASDAQ: ESIC), a Delaware corporation, acquired the iSend and
iNotify advanced messaging businesses (the “Xpedite Business”) from Premiere
Global Services, Inc. (“PGI”) (NYSE: PGI) for $105 million in cash, through the
purchase of PGI’s wholly-owned subsidiaries Xpedite Systems, LLC (“Xpedite”) and
Premiere Global Services (UK) Limited and certain related assets owned by PGI’s
subsidiary Premiere Conferencing (Canada) Limited (“Canada
Holdco”). The Company completed the acquisition by entering into a
Securities and Asset Purchase Agreement (the “Purchase Agreement”), dated as of
October 21, 2010, by and among the Company, PGI, Xpedite, Xpedite Systems
Holdings (UK) Limited and Canada Holdco, and by entering into a Bill of Sale,
Assignment and Assumption Agreement, dated October 21, 2010, by and between the
Company and Canada Holdco.
EasyLink
recapitalized its existing debt and paid for the acquisition with $5 million of
cash on hand and a new credit facility consisting of a $110 million term loan
and a $20 million revolving loan. The Company established the new
credit facility by entering into a Revolving Credit and Term Loan Agreement (the
“Credit Agreement”), dated as of October 21, 2010, by and among the Company, as
borrower, the lenders from time to time party thereto (collectively, the
“Lenders”), and SunTrust Bank, in its capacities as Administrative Agent (in
such capacity, the “Agent”), Swingline Lender, and Issuing Bank, pursuant to
which the Lenders: (i) made a term loan in the original principal amount of
$110,000,000 to the Company (the “Term Loan”), evidenced by Term Notes issued to
each of the Lenders (the “Term Notes”), and (ii) established a revolving credit
facility in an aggregate principal amount of up to $20,000,000 in favor of the
Company, with a $5,000,000 letter
of credit sub-facility and a $5,000,000 swingline loan sub-facility (the “Revolving Loan” and,
together with the Term Loan, the “Credit Facility”), evidenced by Revolving
Notes issued to each of the Lenders (the “Revolving Notes”) and a Swingline Note
issued to the Swingline Lender (the “Swingline Note”), all as more fully
described in the Credit Agreement, the Term Notes, the Revolving Notes and the
Swingline Note.
On
October 21, 2010, the Company used the proceeds of the Term Loan and an initial
$12,000,000 advance under the Revolving Loan to (i) fund the acquisition of the Xpedite
Business and other amounts owing pursuant to the Purchase Agreement or in
connection with the acquisition of the Xpedite Business; (ii) pay off the
outstanding obligations of the Company under that certain Revolving Credit and
Term Loan Agreement, dated as of May 19, 2009, as amended, by and among the
Company, the lenders from time to time party thereto and SunTrust Bank, as
administrative agent; and (iii) pay transaction fees and expenses in connection
with the acquisition of the Xpedite Business and the Credit
Agreement. Borrowings under the Revolving Loan may also be used to finance capital
expenditures and for working capital and other general corporate
purposes
Borrowings
under the Credit Agreement bear interest, at the Company’s election, at a rate
tied to one of the following rates, in each case plus a specified margin: (i)
the higher of (1) the Agent’s prime lending rate, (2) the U.S. Federal Funds
Rate plus 0.5%, and (3) adjusted one-month LIBOR plus 1.0%; (ii) adjusted LIBOR
for the interest period of such borrowing; and (iii) a LIBOR index
rate. The interest margin for each such type of borrowing varies from
1.75% to 4.50%, depending on the Company’s consolidated leverage
ratio.
The
principal amount of the Term Loan will be due and payable in quarterly
installments of $4,125,000, beginning on January 31, 2011, with a payment of the
remaining balance of $48,125,000 due on October 21, 2014, subject to
acceleration upon an event of default. The outstanding principal
amount of any borrowings under the Revolving Loan will be due and payable on
October 21, 2014, subject to an earlier maturity date upon an event of
default. On or after October 21, 2011, the Company may increase the
Lender commitments by an aggregate principal amount of up to $25,000,000 (the
“Additional Commitment”), provided that the outstanding balance of the Term Loan
and the aggregate Lender commitments under the Revolving Loan, together with any
such Additional Commitment, may not exceed $130,000,000. The
Additional Commitment, which may be either an additional term loan or revolving
loan commitment, is contingent on one or more Lenders agreeing to fund such
Additional Commitment.
1
The
Credit Agreement contains usual and customary covenants for financings of this
type, including, among other things: (i) requirements to deliver financial
statements, other reports and notices; (ii) restrictions on indebtedness; (iii)
restrictions on dividends, distributions and redemptions of equity and repayment
of subordinated indebtedness; (iv) restrictions on liens; (v) restrictions on
making certain payments; (vi) restrictions on investments; (vii)
restrictions on asset dispositions and other fundamental changes; and
(viii) restrictions on transactions with
affiliates. Additionally, the Credit Agreement requires the Company
to enter into an interest rate hedge with respect to at least 50% of the
outstanding principal amount of the Term Loan within 120 days after the closing
date thereof.
The
Credit Agreement contains certain financial covenants, including, among other
things: (i) a maximum leverage ratio; (ii) a minimum fixed charge coverage
ratio; (iii) a required minimum consolidated adjusted EBITDA; and (iv) a maximum
amount of capital expenditures per fiscal year.
The
obligations of the Company under the Credit Agreement are guaranteed by EasyLink
Services Corporation, EasyLink Services USA, Inc. and each of Xpedite and its
domestic subsidiaries (collectively, the “Subsidiary Guarantors”), each a direct
or indirect wholly-owned subsidiary of the Company, pursuant to that certain
Subsidiary Guaranty Agreement (the “Guaranty”), dated as of October 21, 2010, by
and among the Company, the Subsidiary Guarantors and the Agent, all as more
fully described in the Guaranty.
The
obligations of the Company and the Subsidiary Guarantors under the Credit
Agreement and the Guaranty are secured by liens on and security interests in all
or substantially all assets of the Company and the Subsidiary Guarantors,
including a pledge of 100% of the domestic subsidiaries of the Company and each
of the Subsidiary Guarantors (other than Quickstream Software Inc.) and 65% of
the equity owned by the Company or any of the Subsidiary Guarantors in
first-tier foreign subsidiaries, pursuant to that certain Security Agreement
(the “Security Agreement”), dated as of October 21, 2010, by and among the
Company, the Subsidiary Guarantors, and the Agent and that certain Stock Pledge
Agreement (the “Stock Pledge Agreement”), dated as of October 21, 2010 by and
among the Company, certain of the Subsidiary Guarantors, and the Agent, all as
more fully described in the Security Agreement and the Stock Pledge
Agreement.
The
foregoing descriptions of the Securities and Asset Purchase Agreement, the Bill
of Sale, Assignment and Assumption Agreement, the Credit Agreement, the Term
Notes, the Revolving Notes, the Swingline Note, the Guaranty, the Security
Agreement and the Stock Pledge Agreement do not purport to be complete and are
subject to, and qualified in their entirety by reference to, the full text of
such documents, which are attached as Exhibit 10.1, Exhibit 10.2, Exhibit 10.3,
Exhibit 10.4, Exhibit 10.5, Exhibit 10.6, Exhibit 10.7, Exhibit 10.8 and Exhibit
10.9, respectively, to this Current Report on Form 8-K and are incorporated
herein by reference.
The
Company issued a press release on October 21, 2010 announcing the acquisition
and new credit facility. A copy of the press release is attached as Exhibit 99.1
to this Current Report on Form 8-K and is incorporated herein by
reference.
Item
1.02 Termination of a Material Definitive Agreement.
On
October 21, 2010, the Company paid
off in full all of the outstanding obligations of the Company under that certain
Revolving Credit and Term Loan Agreement, dated as of May 19, 2009 (as amended,
the “2009 Credit
Agreement”), by and among
the Company, the lenders from time to time party thereto and SunTrust Bank, as
administrative agent. See the information set forth in Item
1.01 to this Current Report on Form 8-K. The material terms of the
2009 Credit Agreement were previously disclosed in a Current Report on Form 8-K
dated May 19, 2009.
2
Item
2.01 Completion of Acquisition or Disposition of Assets.
See the
information set forth in Item 1.01 to this Current Report on Form
8-K.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
See the
information set forth in Item 1.01 to this Current Report on Form
8-K.
Item
9.01 Financial Statements and Exhibits.
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(a)
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Financial statements
of businesses acquired.
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The
Company will amend this Current Report on Form 8-K not later than 71 calendar
days after the date that this Current Report on Form 8-K must be filed to
provide the required financial statements.
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(d)
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Exhibits.
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Exhibit
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Number
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Description
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10.1
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Securities
and Asset Purchase Agreement, dated as of October 21, 2010, among Premiere
Global Services, Inc., Xpedite Systems Holdings (UK) Limited, Premiere
Conferencing (Canada) Limited, Xpedite Systems, LLC and EasyLink Services
International Corporation.
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10.2
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Bill
of Sale, Assignment and Assumption Agreement, dated as of October 21,
2010, by and between Premiere Conferencing (Canada) Limited and EasyLink
Services International Corporation.
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10.3
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Revolving
Credit and Term Loan Agreement, dated as of October 21, 2010, among
EasyLink Services International Corporation, as Borrower, the Lenders from
time to time party thereto, SunTrust Bank, as Administrative Agent, Fifth
Third Bank, as Syndication Agent, Bank of North Georgia, as
co-Documentation Agent and The PrivateBank & Trust Company, as
co-Documentation Agent.
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10.4
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Form
of Term Note.
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10.5
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Form
of Revolving Credit Note.
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10.6
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Form
of Swingline Note.
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10.7
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Subsidiary
Guaranty Agreement, dated as of October 21, 2010, by and among EasyLink
Services International Corporation, as Borrower, each of its subsidiaries
signatory thereto and SunTrust Bank, as Administrative Agent for the
Lenders.
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10.8
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Security
Agreement, dated as of October 21, 2010, among EasyLink Services
International Corporation, as Borrower, each of its subsidiaries signatory
thereto, each of its subsidiaries that thereafter becomes a party thereto,
and SunTrust Bank, as Administrative Agent for the
Lenders.
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10.9
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Stock
Pledge Agreement, dated as of October 21, 2010, by EasyLink Services
International Corporation, as Borrower, and each of its subsidiaries
signatory thereto, in favor of SunTrust Bank, as Administrative Agent for
the Lenders.
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99.1
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Press
Release, dated October 21,
2010.
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3
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized.
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EASYLINK
SERVICES INTERNATIONAL CORPORATION
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By:
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/s/ Glen E. Shipley
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Glen
E. Shipley
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Chief
Financial Officer
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Dated: October
22, 2010
4
EXHIBIT
INDEX
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Exhibit
Number
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Description
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10.1
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Securities
and Asset Purchase Agreement, dated as of October 21, 2010, among Premiere
Global Services, Inc., Xpedite Systems Holdings (UK) Limited, Premiere
Conferencing (Canada) Limited, Xpedite Systems, LLC and EasyLink Services
International Corporation.
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10.2
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Bill
of Sale, Assignment and Assumption Agreement, dated as of October 21,
2010, by and between Premiere Conferencing (Canada) Limited and EasyLink
Services International Corporation.
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10.3
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Revolving
Credit and Term Loan Agreement, dated as of October 21, 2010, among
EasyLink Services International Corporation, as Borrower, the Lenders from
time to time party thereto, SunTrust Bank, as Administrative Agent, Fifth
Third Bank, as Syndication Agent, Bank of North Georgia, as
co-Documentation Agent and The PrivateBank & Trust Company, as
co-Documentation Agent.
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10.4
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Form
of Term Note.
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10.5
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Form
of Revolving Credit Note.
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10.6
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Form
of Swingline Note.
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10.7
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Subsidiary
Guaranty Agreement, dated as of October 21, 2010, by and among EasyLink
Services International Corporation, as Borrower, each of its subsidiaries
signatory thereto and SunTrust Bank, as Administrative Agent for the
Lenders.
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10.8
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Security
Agreement, dated as of October 21, 2010, among EasyLink Services
International Corporation, as Borrower, each of its subsidiaries signatory
thereto, each of its subsidiaries that thereafter becomes a party thereto,
and SunTrust Bank, as Administrative Agent for the
Lenders.
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10.9
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Stock
Pledge Agreement, dated as of October 21, 2010, by EasyLink Services
International Corporation, as Borrower, and each of its subsidiaries
signatory thereto, in favor of SunTrust Bank, as Administrative Agent for
the Lenders.
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99.1
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Press
Release, dated October 21,
2010.
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