Attached files
file | filename |
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EX-4.2 - EX-4.2 - TERREMARK WORLDWIDE INC. | g25322exv4w2.htm |
EX-4.1 - EX-4.1 - TERREMARK WORLDWIDE INC. | g25322exv4w1.htm |
EX-10.2 - EX-10.2 - TERREMARK WORLDWIDE INC. | g25322exv10w2.htm |
EX-10.6 - EX-10.6 - TERREMARK WORLDWIDE INC. | g25322exv10w6.htm |
EX-10.5 - EX-10.5 - TERREMARK WORLDWIDE INC. | g25322exv10w5.htm |
EX-10.1 - EX-10.1 - TERREMARK WORLDWIDE INC. | g25322exv10w1.htm |
EX-10.3 - EX-10.3 - TERREMARK WORLDWIDE INC. | g25322exv10w3.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 16, 2010
TERREMARK WORLDWIDE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 1-12475 | 84-0873124 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
One Biscayne Tower
2 South Biscayne Boulevard, Suite 2800
Miami, Florida 33131
2 South Biscayne Boulevard, Suite 2800
Miami, Florida 33131
(Address of principal executive office)
Registrants telephone number, including area code: (305) 961-3200
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:
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. |
On November 16, 2010 (the Closing Date), Terremark Worldwide, Inc., a Delaware
corporation (we, us, our or the Company), completed its previously announced offering of
$75,000,000 aggregate principal amount of 9.500% Senior Secured Second Lien Notes due 2013 (the
Second Lien Notes), which are guaranteed (the Guarantees and, together with the
Second Lien Notes, the Securities) by all of the Companys domestic subsidiaries (the
Guarantors). Additionally, the Second Lien Notes are secured by a second-priority
security interest in substantially all of the assets of the Company and the Guarantors, including
the pledge of 100% of all outstanding capital stock of each of the Companys domestic subsidiaries,
except Technology Center of the Americas, LLC and Terremark Federal Group, Inc., and 65% of all
outstanding capital stock of substantially all the Companys foreign subsidiaries (such security
interests and pledges, together, the Security Interests). The Securities were offered
and sold in a private placement to qualified institutional buyers in the United States in reliance
on Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and
outside the United States in reliance on Regulation S under the Securities Act.
The Securities were issued pursuant to an indenture, dated November 16, 2010 (the
Indenture), among the Company, the Guarantors and The Bank of New York Mellon Trust
Company, N.A., as trustee (the Trustee). The Indenture is described under Item 2.03
below, and such description, together with all information incorporated by reference in Item 2.03,
is hereby incorporated by reference in this Item 1.01 of this Current Report on Form 8-K.
The Securities have not been registered under the Securities Act or any state securities laws
and may not be sold except in a transaction registered under, or exempt from, the registration
provisions of the Securities Act and applicable state securities laws. On the Closing Date, the
Company and the Guarantors entered into a registration rights agreement (the Registration
Rights Agreement), pursuant to which the Company and the Guarantors have agreed for the
benefit of the holders of the Securities to use their best efforts to file with the Securities and
Exchange Commission (the Commission) and cause to become effective a registration
statement (the Exchange Offer Registration Statement) with respect to a registered offer
to exchange the Securities for an issue of the Companys senior secured second lien notes due 2013
(the Exchange Notes) guaranteed by the Guarantors (the Exchange Note Guarantees
and, together with the Exchange Notes, the Exchange Securities) with terms identical to
the Second Lien Notes, except that the Exchange Notes will not bear legends restricting transfer
and will not contain terms providing for the payment of additional interest as described below and
in the Registration Rights Agreement. In addition, we have agreed to file, in certain
circumstances, a shelf registration statement covering resales of the Securities.
If the exchange offer for the Second Lien Notes is not completed on or prior to the
360th day following the Closing Date, the interest rate on the Second Lien Notes will
increase by 0.25% per annum for the first 90-day period thereafter, and the amount of such
additional interest will increase by an additional 0.25% per annum for each subsequent 90-day
period, up to a maximum of 1.00% per annum over the original interest rate on the Second Lien Notes
(Additional Interest). Additional Interest will also become payable if any of the
following occurs: (i) our failure to file with the Commission the Exchange Offer Registration
Statement on or prior to the 180th day following the Closing Date; (ii) our failure to
file with the Commission a shelf registration statement on or prior to the 90th day
following the occurrence of an event requiring that we file a shelf registration statement; (iii)
if on or prior to the 360th day following the Closing Date, neither the Exchange Offer
Registration Statement nor a shelf registration statement has been declared effective by the
Commission; (iv) if on or prior to the 360th day following the Closing Date a shelf
registration statement, if required in lieu of Exchange Offer Registration Statement, has not been
declared
effective by the Commission; or (v) if either the Exchange Offer Registration Statement or a
shelf registration statement that has been declared effective ceases to be effective. Additional
Interest shall cease to accrue and become payable: (i) following our cure of any of the foregoing
conditions, as applicable; (ii) on any Exchange Securities; (iii) on Securities that cease to be
outstanding; or (iv) after the Securities (x) become freely transferable without restriction
pursuant to Rule 144 under the Securities Act by persons that are not our affiliates (provided that
the one-year holding period specified by Rule 144(d)(1)(ii) has been satisfied), (y) do not bear
any restrictive legends and (z) do not bear a restrictive CUSIP number.
2
On the Closing Date, in connection with the grant of the Security Interests to U.S. Bank
National Association, as collateral trustee (the Collateral Trustee), for the benefit of
the holders of the Second Lien Notes, the Company and the Guarantors entered into each of (i) that
certain Second Lien Security Agreement (the Security Agreement) with the Collateral
Trustee; (ii) that certain Second Lien Intellectual Property Security Agreement with the Collateral
Trustee (the IP Security Agreement); (iii) that certain Collateral Trust Joinder to the
Collateral Trust Agreement, dated June 24, 2009 (the Collateral Trust Agreement), with
the Trustee, the Collateral Trustee and the other Secured Debt Representatives from time to time
party thereto (the Collateral Trust Joinder); and (iv) that certain Additional Secured
Debt Designation (the Designation) designating the Second Lien Notes as additional
secured junior lien debt under the Collateral Trust Agreement.
The foregoing description of the Registration Rights Agreement, Security Agreement, IP
Security Agreement, Collateral Trust Agreement, Collateral Trust Joinder and Designation is only a
summary and is qualified in its entirety by reference to the full text of the Registration Rights
Agreement, Security Agreement, IP Security Agreement, Collateral Trust Agreement, Collateral Trust
Joinder and Designation, which are filed as Exhibit 10.1, Exhibit 10.2, Exhibit 10.3, Exhibit 10.4,
Exhibit 10.5 and Exhibit 10.6, respectively, to this Current Report on Form 8-K and each of which
is incorporated by reference in this Item 1.01.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The Second Lien Notes issued as described in Item 1.01 of this Current Report on Form 8-K are
our general secured obligations, secured by second-priority liens on the collateral securing the
Second Lien Notes and are effectively junior to the Companys outstanding $470 million aggregate
principal amount of 12.0% Senior Secured Notes, due 2017, (the First Lien Notes) to the
extent of the value of the collateral. To the extent that any liens on the collateral securing the
Second Lien Notes were not perfected as of the Closing Date, the Company must use its reasonable
best efforts to promptly perfect such security interests; provided that the Company must in any
event perfect such interests no later than 120 days following the Closing Date. The Second Lien
Notes bear interest at 9.500% per annum, payable in arrears on May 15 and November 15 of each year,
commencing May 15, 2011.
At any time, we may redeem all or a part of the Second Lien Notes on any one or more
occasions, at the redemption prices (expressed as percentages of principal amount of the Second
Lien Notes to be redeemed) set forth below plus accrued and unpaid interest on the Second Lien
Notes redeemed to the applicable redemption date, if redeemed during the periods indicated below:
Year | Percentage | |||
Issue Date through and including May 15, 2011 |
104.000 | % | ||
May 16, 2011 through and including May 15, 2012 |
102.000 | % | ||
May 16, 2012 and thereafter |
100.000 | % |
3
The terms of the Indenture generally limit our ability and the ability of our subsidiaries to,
among other things: (i) make restricted payments; (ii) incur additional debt and issue preferred
or disqualified stock; (iii) create liens; (iv) create or permit to exist restrictions on our
ability or the ability of our restricted subsidiaries to make certain payments or distributions;
(v) engage in sale-leaseback transactions; (vi) engage in mergers or consolidations or transfer all
or substantially all of our assets; (vii) make certain dispositions and transfers of assets; and
(viii) enter into transactions with affiliates.
Pursuant to the Indenture, we and our subsidiaries may incur additional indebtedness up
subject to certain prescribed limits; provided, that such limits would not apply to the extent that
our fixed charge coverage ratio would have been at least 2.0 to 1 on a pro forma basis (including a
pro forma application of the net proceeds therefrom) as if such indebtedness had been incurred at
and as of the beginning of our most recently completed four fiscal quarters for which internal
financial statements are available.
Following the first day that the Second Lien Notes are assigned an investment grade rating by
both Moodys and S&P, and provided that no default has occurred and is continuing, certain of the
restrictions described the above will be suspended, including, but not limited to, restrictions on
the incurrence of debt, restricted payments, transactions with affiliates and certain restrictions
on mergers, consolidations and sales of assets.
In the event of a change in control, we will be required to offer to purchase for cash all
Second Lien Notes then outstanding at a price equal to 101% of their principal amount, plus accrued
interest on the Second Lien Notes repurchased, to the date of repurchase (subject to the right of
the holders of record on the relevant record date to receive interest due on the relevant interest
payment date). Additionally, if we or a Guarantor sell assets, all or a portion of the net
proceeds of which are not reinvested in accordance with the terms of the Indenture or are not used
to repay certain debt, we will be required to offer to purchase an aggregate principal amount of
the outstanding Second Lien Notes, in an amount equal to such remaining net proceeds, at a purchase
price equal to 100% of the principal amount thereof, plus accrued interest and Additional Interest
(if any), to the payment date.
The Indenture provides for customary events of default, which include (subject in certain
cases to customary grace and cure periods), among others: nonpayment of principal or interest;
breach of covenants or other agreements in the Indenture; defaults under or failure to pay certain
other indebtedness; the failure by us or our restricted subsidiaries to pay certain final
non-appealable judgments; the failure of certain security interests in the collateral securing the
Second Lien Notes to be in full force and effect; the failure in certain instances of any Guarantee
to be in full force and effect; and certain events of bankruptcy or insolvency. Generally, if an
event of default occurs and is continuing under the Indenture, the Trustee or the holders of at
least 25% in aggregate principal amount of the Second Lien Notes then outstanding may declare the
principal of, premium, if any, and accrued interest on all the Second Lien Notes immediately due
and payable.
The foregoing description of the Indenture and the Second Lien Notes is only a summary and is
qualified in its entirety by reference to the full text of the Indenture and the form of Second
Lien Note, which are filed as Exhibit 4.1 and Exhibit 4.2, respectively, to this Current Report on
Form 8-K and each of which is incorporated by reference in this Item 2.03.
4
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. | Description | |||
4.1 | Indenture, dated November 16, 2010, by and among the Company,
the Guarantors and the Trustee. |
|||
4.2 | Form of Second Lien Note. |
|||
10.1 | Registration Rights Agreement, dated November 16, 2010, by and
among the Company, the Guarantors and Credit Suisse Securities
(USA) LLC, as initial purchaser. |
|||
10.2 | Second Lien Security Agreement, dated November 16, 2010, by
and among the Company, the Guarantors and the Collateral
Trustee. |
|||
10.3 | Second Lien Intellectual Property Security Agreement, dated
November 16, 2010, by and among the Company, the Guarantors
and the Collateral Trustee. |
|||
10.4 | Collateral Trust Agreement, dated June 24, 2009, by and among
the Company, the Guarantors, the Collateral Trustee, the
Trustee and the other Secured Debt Representatives from time
to time party thereto (incorporated by reference to Exhibit
10.4 to the Companys Current Report on Form 8-K filed with
the Securities and Exchange Commission on June 29, 2009, and
incorporated by reference herein). |
|||
10.5 | Collateral Trust Joinder, dated November 16, 2010, by and
between the Collateral Trustee and the Trustee. |
|||
10.6 | Additional Secured Debt Designation, dated November 16, 2010,
by and between the Company and the Collateral Trustee. |
5
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.
TERREMARK WORLDWIDE, INC. |
||||
Date: November 22, 2010 | By: | /s/ Jose A. Segrera | ||
Jose A. Segrera | ||||
Chief Financial Officer |
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EXHIBIT INDEX
Exhibit No. | Description | |||
4.1 | Indenture, dated November 16, 2010, by and among the Company,
the Guarantors and the Trustee. |
|||
4.2 | Form of Second Lien Note. |
|||
10.1 | Registration Rights Agreement, dated November 16, 2010, by and
among the Company, the Guarantors and Credit Suisse Securities
(USA) LLC, as initial purchaser. |
|||
10.2 | Second Lien Security Agreement, dated November 16, 2010, by
and among the Company, the Guarantors and the Collateral
Trustee. |
|||
10.3 | Second Lien Intellectual Property Security Agreement, dated
November 16, 2010, by and among the Company, the Guarantors
and the Collateral Trustee. |
|||
10.4 | Collateral Trust Agreement, dated June 24, 2009, by and among
the Company, the Guarantors, the Collateral Trustee, the
Trustee and the other Secured Debt Representatives from time
to time party thereto (incorporated by reference to Exhibit
10.4 to the Companys Current Report on Form 8-K filed with
the Securities and Exchange Commission on June 29, 2009, and
incorporated by reference herein). |
|||
10.5 | Collateral Trust Joinder, dated November 16, 2010, by and
between the Collateral Trustee and the Trustee. |
|||
10.6 | Additional Secured Debt Designation, dated November 16, 2010,
by and between the Company and the Collateral Trustee. |
7