Attached files
file | filename |
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EX-10.3 - Lightyear Network Solutions, Inc. | v208900_ex10-3.htm |
EX-10.4 - Lightyear Network Solutions, Inc. | v208900_ex10-4.htm |
EX-10.1 - Lightyear Network Solutions, Inc. | v208900_ex10-1.htm |
EX-10.8 - Lightyear Network Solutions, Inc. | v208900_ex10-8.htm |
EX-10.9 - Lightyear Network Solutions, Inc. | v208900_ex10-9.htm |
EX-10.5 - Lightyear Network Solutions, Inc. | v208900_ex10-5.htm |
EX-10.2 - Lightyear Network Solutions, Inc. | v208900_ex10-2.htm |
EX-10.7 - Lightyear Network Solutions, Inc. | v208900_ex10-7.htm |
EX-10.6 - Lightyear Network Solutions, Inc. | v208900_ex10-6.htm |
EX-10.10 - Lightyear Network Solutions, Inc. | v208900_ex10-10.htm |
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): January 19,
2011
LIGHTYEAR
NETWORK SOLUTIONS, INC.
(Exact
name of registrant as specified in Charter)
Nevada
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000-32451
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91-1829866
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File No.)
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(IRS
Employee Identification
No.)
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1901
Eastpoint Parkway
Louisville,
Kentucky 40223
(Address
of Principal Executive Offices)
502-244-6666
(Issuer
Telephone number)
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
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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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
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Entry
into a Material Definitive
Agreement.
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Promissory
Note
On January 21, 2011, Lightyear Network
Solutions, Inc. (the "Company") entered into a $2,000,000 secured promissory
note (the "Note") with First Savings Bank, F.S.B. (the “Bank”), of Clarksville,
Indiana. The Company expects to use $1,000,000 of the Note proceeds
for infrastructure improvements to the voice and telecommunications operations
of its wholly owned subsidiary, SE Acquisitions, LLC (“SE Acquisitions”), a
Kentucky limited liability company whose assets the Company acquired from
Southeast Telephone, Inc. during the fourth quarter of 2010. The
Company intends to contribute the remaining proceeds of the Note to Lightyear
Network Solutions, LLC (“Lightyear”), a Kentucky limited liability company and
wholly owned subsidiary of the Company, such that Lightyear may make a
$1,000,000 payment (the “Sullivan Payment”) under the Settlement Agreement (the
“Settlement Agreement”) disclosed in and filed with the Company’s Current Report
on Form 8-K dated April 29, 2010. Pursuant to the Settlement Agreement,
Lightyear will pay the Sullivan Payment directly to Fifth Third Bank (“Fifth
Third”) on behalf of Chris T. Sullivan as a payment on a commercial note made by
Mr. Sullivan payable to Fifth Third.
Under the Note, which will mature on
January 21, 2013, the Company may borrow up to the full principal amount, from
time to time, through February 21, 2011; the Company expects to borrow the full
principal amount by that date. Borrowings under the Note will bear
interest at a rate equal to the Prime Rate, as reported in the Wall Street
Journal, plus 4.0%, but the rate will never be less than 7.00%. The
Company must make monthly interest payments through January 21, 2013, $500,000
principal payments at January 21, 2012 and July 21, 2012, and a final,
$1,000,000 principal payment on January 21, 2013.
Borrowings
under the Note will be secured by: (1) a first priority perfected security
interest in all accounts receivable of Lightyear; (2) Lightyear’s lockbox
account with Fifth Third Bank; (3) two million shares of the Company’s preferred
stock, $0.001 par value per share, owned by LY Holdings, LLC (“LYH”), a Kentucky
limited liability company; (4) the personal guaranties of J. Sherman Henderson
III and Ronald L. Carmicle; and, (5) a guaranty by Lightyear. Mr. Carmicle’s
personal guaranty is limited to $750,000. Pursuant to an agreement dated January
21, 2011 and attached to this Current Report on Form 8-K as Exhibit 10.8, in
consideration for his personal guaranty, the Company will pay Mr. Carmicle
$60,000 for each year in which his guaranty is in effect, payable in monthly
installments of $5,000.
The
Settlement Agreement, dated April 29, 2010, as amended August 12, 2010, is by
and between (i) Lightyear, (ii) LYH, (iii) Mr. Sullivan, (iv) LANJK, LLC
(“LANJK”), a Kentucky limited liability company, (v) Rice Realty Company, LLC, a
Kentucky limited liability company (“RRC”), (vi) Rigdon O. Dees III, (vii) CTS
Equities Limited Partnership, a Nevada limited partnership (“CTS”), and (viii)
Ronald L. Carmicle. The First Amendment to Settlement Agreement was filed as
Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the period ended
June 30, 2010. Mr. Sullivan, Mr. Henderson, Mr. Carmicle and W. Brent Rice
are all directors of the Company. Mr. Sullivan, Mr. Henderson,
Mr. Rice and Mr. Dees are all directors and members of LYH. Mr.
Henderson is the Company’s Chief Executive Officer. LANJK is managed by Mr.
Henderson and is wholly-owned by Mr. Henderson’s wife. RRC is wholly-owned
and managed by the wife and two adult children of Mr. Rice. CTS is
wholly-owned and managed by Mr. Sullivan. As of January 25, 2011, LYH
owned 63.4% of the Company’s common stock, $0.001 par value per share, on an
as-converted, fully diluted basis.
The Note contains customary events of
default and customary affirmative and negative covenants, including (among
others) minimum earnings and net worth requirements for SE Acquisitions and Bank
approval of additional Company (or affiliate) borrowings in excess of
$100,000.
As reported in the Company’s Form 8-K
dated March 17, 2010, Lightyear currently has an outstanding secured promissory
note (the “First FSB Note”) with the Bank. The terms of the First FSB
Note were reported in, and the First FSB Note and related agreements were filed
with, the previous Form 8-K. As of January 25, 2011, the outstanding
principal and accrued interest under the First FSB Note totaled
$322,356.91. Mr. Henderson maintains a personal line of credit with
the Bank in the amount of $500,000.
There are no material relationships
between the Company, Lightyear or SE Acquisitions, or their affiliates, and the
Bank, other than as described above.
The foregoing descriptions of the
various loan documents do not purport to be complete and are qualified in their
entirety by reference to those documents which are attached as exhibits hereto
and incorporated herein.
Collateral Release
Agreement
On January 21, 2011, the Company
entered into a Collateral Release Agreement (the “Release Agreement”) with LYH,
Lightyear, Mr. Sullivan, CTS, and Mr. Dees whereby the Company released its
security interest in 2,000,000 shares of the Company’s preferred stock, $0.001
par value per share, owned by LYH. The Company held its security
interest pursuant to a Subordination and Security Agreement (the “Security
Agreement”) by and between LYH and the Company dated as of February 12,
2010.
The
foregoing description of the Release Agreement does not purport to be complete
and is qualified in its entirety by reference to the Release Agreement and the
Security Agreement, copies of which are attached hereto as Exhibit 10.10 and
incorporated herein by reference.
Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
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The information set forth in Item 1.01
under the heading Promissory Note is
hereby incorporated in this Item 2.03 by reference.
Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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(e) On
January 19, 2011, the Company’s Board of Directors approved the payment of cash
bonuses to the executive officers, and in the amounts, listed
below:
Executive
Officer
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Bonus
Amount
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Stephen
M. Lochmueller, President
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$50,000
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Elaine
G. Bush, Chief Financial Officer
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$20,000
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Randy
Ammon, Chief Operating Officer
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$15,000
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John
J. Greive, VP of Regulatory Affairs
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$10,000
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Item
9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits
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Exhibit
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Description
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10.1
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Promissory
Note, dated as of January 21, 2011 by Lightyear Network
Solutions, Inc. to First Savings Bank,
F.S.B.
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10.2
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Absolute
Continuing Guaranty Agreement, dated January 21, 2011, by J. Sherman
Henderson III in favor of First Savings Bank,
F.S.B.
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10.3
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Absolute
Continuing Guaranty Agreement, dated January 21, 2011, by Ronald
L.Carmicle in favor of First Savings Bank,
F.S.B.
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10.4
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Absolute
Continuing Guaranty Agreement, dated January 21, 2011, by Lightyear
Network Solutions, LLC in favor of First Savings Bank,
F.S.B.
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10.5
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Security
Agreement, dated January 21, 2011, by and between Lightyear
Network Solutions, LLC and First Savings Bank,
F.S.B.
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10.6
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Lockbox
and Account Control Agreement, dated as of January 21, 2011, by and among
Lightyear Network Solutions, LLC, Fifth Third Bank and First SavingsBank,
F.S.B.
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10.7
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Stock
Pledge Agreement, dated January 21, 2011, by LY Holdings, LLC in favor of
First Savings Bank, F.S.B.
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10.8
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Agreement
dated January 21, 2011 by and between Lightyear Network Solutions, Inc.
and Ronald L Carmicle.
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10.9
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Subordination
and Security Agreement dated as of February 12, 2010 by and between LYH
and the Company.
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10.10
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Collateral
Release Agreement dated January 21, 2011, by and among LYH, Lightyear, the
Company, Chris T. Sullivan, CTS Equities, Limited Partnership, and Rigdon
O. Dees.
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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.
LIGHTYEAR
NETWORK SOLUTIONS, INC.
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Date:
January 25, 2011
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By:
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/s/
J. Sherman Henderson III
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J.
Sherman Henderson III
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Chief
Executive Officer
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