Exhibit 10.2
Debt Exchange Agreement
Dated as of April 14, 2003
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Dear ▇▇▇▇▇▇:
Reference is made to (i) the note or notes held by you (herein, "you"
or the "Holder") issued by EasyLink Services Corporation ("EasyLink") described
in more detail on Schedule A hereto (the "Note"), and (ii) the other related
agreements described on Schedule A (the Note, together with such other
agreements described on Schedule A, collectively referred to herein as the
"Transaction Agreements"). Capitalized terms used herein that are not defined
herein and that are defined in a Transaction Agreement shall have the respective
meanings ascribed to them therein.
1. Exchange Agreement. Subject to the terms and conditions contained
herein, the Holder agrees to transfer and assign (the "Transfer") upon the
Closing (as defined below) all of his right, title and interest in, to and under
the Transaction Agreements (the "Rights") to EasyLink, free and clear of all
liens, security interests, claims or other encumbrances ("Liens"), in exchange
for the issuance and delivery by EasyLink of the number of shares of EasyLink's
Class A common stock, par value $.01 per share (the "Class A common stock"), set
forth on Schedule A hereto (the "Shares").
2. Closing.
(a) Time and Place. The closing of the Transfer shall be held at the
offices of EasyLink at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (or, if the Closing
shall occur after the move of EasyLink's headquarters, at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇), at 10:00 a.m. local time, on such date as the conditions set
forth in Section 2(b)(ii) and (iii) shall have been satisfied or at such other
time and place as shall be mutually agreed upon by the EasyLink and the Holders
(the date of the Initial Closing is hereinafter referred to as the "Initial
Closing Date"). The closing is herein referred to as a "Closing." Upon the
Closing, EasyLink shall issue an irrevocable transfer instruction letter
instructing its stock transfer agent to issue and deliver to the Holder to the
address specified on Schedule A a certificate evidencing the Shares (the "Share
Certificate"). Promptly after receipt of the Share Certificate by the Holder,
the Holder shall return or cause to be returned the original Note to EasyLink.
(b) Conditions To Closing. Each party's obligation to consummate the
Closing is subject to the fulfillment, prior to or at the Closing, the following
conditions:
(i) Representations and Warranties. The representations and
warranties of the other party in this Agreement shall be correct in all
material respects when made and at the time of the Closing with the
same effect as if made on the Closing Date.
(ii) NASDAQ Waiver or Stockholder Approval. EasyLink shall
have either (i) received a waiver from the NASDAQ Stock Market from its
shareholder approval rules to the extent applicable in connection with
the issuance of the Shares and complied with any conditions contained
in such waiver in order to consummate the transactions contemplated
hereby at the Closing or (ii) shall have obtained shareholder approval
to the extent required under the rules of the NASDAQ Stock Market of
the issuance of the Shares in accordance with the terms of this
Agreement pursuant to a duly called meeting of shareholders of the
EasyLink.
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(iii) Other Creditors' Condition. EasyLink shall have entered
into a restructuring arrangement with the holders of at least 80% in
principal amount of its $81.8 million aggregate principal amount of
senior notes and subordinated notes outstanding as of June 30, 2002,
and the terms and conditions of the restructuring of Similarly Situated
Notes (as defined below) are not more favorable taken as a whole to the
holders of Similarly Situated Notes than the terms hereof (the "Other
Creditor's Condition"). As used herein, Similarly Situated Notes means
notes included in the $10.25 million principal amount of 2006 secured
convertible notes issued pursuant to the Note Purchase Agreement dated
January 8, 2001.
3. Termination. Either party may terminate this Agreement upon written
notice to the other party at any time prior to the Closing if (a) the Closing
shall not have occurred on or before May 31, 2003 or such later date as the
parties may mutually agree, provided that a party may not terminate this
Agreement if the Closing shall fail to occur as a result of a breach by such
party of its representations, warranties or obligations under this Agreement or
(b) any court or governmental or regulatory agency, authority or body shall have
taken any action restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and all appeals and means of appeal therefrom
have been exhausted.
4. Representations and Warranties of EasyLink. EasyLink represents and
warrants to you that:
(a) Organization; Power and Authority. EasyLink is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation. EasyLink has the
corporate power and authority to execute and deliver this Agreement and
to perform the provisions hereof and thereof.
(b) Authorization, etc. (a) This Agreement has been duly
authorized by all necessary corporate action on the part of EasyLink,
and this Agreement constitutes a legal, valid and binding obligation of
EasyLink enforceable against it in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(c) Validity of Shares. The Shares have been duly authorized
by all necessary corporate action on the part of EasyLink. When issued
upon the Closing in accordance with the terms of this Agreement, the
Shares will be validly issued and outstanding, fully paid and
nonassessable and the issuance of the shares will not be subject to
preemptive or other similar contractual rights of any other stockholder
of the EasyLink.
(d) Compliance with Other Instruments, etc. The execution,
delivery and performance by EasyLink of this Agreement will not
contravene, result in any breach of, or constitute a default under
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement
or instrument to which the EasyLink or any Subsidiary is bound or by
which the EasyLink or any Subsidiary or any of their respective
properties may be bound or affected.
5. Representations of the Holder. The Holder represents and warrants to
EasyLink that:
(a) Title to Exchange Notes. Each Holder represents that it has good
and valid title and beneficial ownership of all of the Rights to be exchanged
for Shares hereunder, free and clear of all Liens. Upon the assignment and
transfer to EasyLink at the Closing, EasyLink will acquire all of Holder's
right, title and interest in, to and under the Rights to be exchanged by it for
Shares hereunder free and and clear of all Liens.
(b) Compliance with Other Instruments, etc. The execution, delivery and
performance by the Holder of this Agreement will not contravene, result in any
breach of, or constitute a default under under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which the EasyLink or any Subsidiary is
bound or by which the EasyLink or any Subsidiary or any of their respective
properties may be bound or affected.
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(c) Purchase for Investment; Status of Holder, etc. Each Holder
represents that it is acquiring the Shares for its own account or for one or
more separate accounts maintained by it or for the account of one or more
pension or trust funds and not with a view to the distribution thereof other
than pursuant to a registration statement filed under the Securities Exchange
Act of 1933, as amended (the "Act") or available exemption. Each Holder (i) is
an "accredited investor" as that term is defined in Rule 501(a) promulgated
under the Securities Act, (ii) is an investor experienced in the evaluation of
businesses similar to EasyLink, (iii) is able to fend for itself in the
transactions contemplated by this Agreement, (iv) has such knowledge and
experience of financial, business and investment matters as to be capable of
evaluating the merits and risks of this investment, (v) has the ability to bear
the economic risks of this investment, (vi) was not organized or reorganized for
the specific purpose of acquiring the Shares and (vii) has been afforded the
opportunity to ask questions of, and to receive answers from, the EasyLink and
to obtain additional information, to the extent the EasyLink has such
information or could have acquired it without unreasonable effort or expense,
all as necessary for such Holder to make an informed investment decision with
respect to the Shares and the Common Shares. Each Holder understands that
neither the Shares nor the Common Shares have been registered under the
Securities Act, that neither the Shares nor the Common Shares may be resold
unless registered pursuant to the provisions of the Act or an exemption from
registration is available. Each Holder understands and acknowledges that
certificates representing the Shares and the Common Shares may bear a
restrictive legend in customary form.
6. General Release. In consideration of the transactions contemplated
hereby, each of the Holder and EasyLink (the "Releasing Party"), upon the
Closing, hereby releases and discharges the other party and its affiliates, and
the respective officers, directors, shareholders, agents, attorneys, successors
and assigns of the other party and its affiliates (the "Releasees"), from any
and all claims, actions, demands, and causes of action, whether in contract,
tort or otherwise, now existing or hereafter arising which relate to or arise
from the Transaction Agreements or any predecessor agreements or instruments or
pertaining directly or indirectly thereto; provided that the obligations,
representations and warranties of the parties under this Exchange Agreement
shall not be released and discharged hereby and shall survive after the date
hereof.
7. Deferral. Until the termination of this Agreement in accordance with
the terms hereof, the Holder hereby defers its right to receive payments under
the Note.
8. Confidentiality. For the purposes of this Section 8, "Confidential
Information" means information, whether written or oral, delivered to you by or
on behalf of EasyLink or any affiliate in connection with the transactions
contemplated by or otherwise pursuant to this Agreement, provided that such term
does not include information that (a) was publicly known or otherwise known to
you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any person acting on your behalf, or
(c) otherwise becomes known to you other than through disclosure by EasyLink or
any Subsidiary through source not subject to a prohibition on disclosure to you.
You will maintain the confidentiality of such Confidential Information in
accordance with your normal procedures to protect confidential information of
third parties delivered to you and you will not use the Confidential Information
for any purpose other than for the purposes of the transactions contemplated
hereby, provided that you may deliver or disclose Confidential Information to
(i) your directors, officers, employees, agents, attorneys and affiliates (to
the extent such disclosure reasonably relates to the administration of the
investment represented by your Notes or Shares), (ii) your financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 8, (iii)
any federal or state regulatory authority having jurisdiction over you.
9. Miscellaneous.
(a) Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of either party hereto bind and
inure to the benefit of such party's successors and assigns (including, without
limitation, any subsequent holder of the Note) whether so expressed or not.
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(b) Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
(c) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.
(d) Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.
(e) Integration. This Agreement constitutes the entire agreement and
understanding among the parties relating to the subject matter hereof, and
supersedes all prior proposals, negotiations, agreements, and understandings
related to this subject matter.
(f) Amendments, Waivers, etc. No amendment, modification, rescission,
waiver or release of any provision of this Agreement shall be effective unless
the same shall be in writing and signed by the parties hereto.
(g) Section Titles. The Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not part of this Agreement.
(h) Notices. All notices and communications provided for hereunder
shall be in writing and sent (i) by telecopy if the sender on the same day sends
a confirming copy of such notice by a registered or certified mail with return
receipt requested (postage prepaid) or by recognized overnight delivery service
(charges prepaid), or (ii) by registered or certified mail with return receipt
requested (postage prepaid), or (iii) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
If to you or your nominee, to you or it at the address specified for
such communications in Schedule A, or at such other address as you or
it shall have specified to EasyLink in writing, or
If to EasyLink, to it at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (or, if
EasyLink shall have completed the move of its corporate headquarters,
at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇), Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇,
with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ at the same address, or at such other
address as EasyLink shall have specified to the holder of each Note in
writing.
Notices under clause (i) and (iii) of this Section 9(h) will be deemed
given only when actually received and notices under clause (ii) shall be deemed
received upon the earlier of five business days after delivered to an office of
the United States Postal Service and when actually received.
This Agreement shall become effective when it shall have been executed
and delivered by both of the parties hereto. Counterparts of this Agreement
shall be deemed delivered when such counterparts are received by facsimile by
each of the parties to which such counterparts are sent at the fax numbers set
forth beneath the signatures of the parties hereto. The parties shall send an
original paper copy of such counterpart to each of the other parties promptly
after such execution and delivery.
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If you are in agreement with the foregoing, kindly sign in the space
indicated below and return to the undersigned a copy of this agreement.
Very truly yours,
EASYLINK SERVICES CORPORATION
By: s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President and General Counsel
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
Accepted and agreed as of the date of this letter:
s/▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
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Schedule A - ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ promissory note
Description of Note and Other Transaction Agreements:
12% Senior Notes due in installments commencing June 2003, convertible at $10.00
per share; Modification Agreement dated as of June 1, 2001 relating thereto.
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Principal Amount of
Purchaser/Holder Notes Number of Shares
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▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ $2,682,964 1,341,482*
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* The number of Shares shall be subject to appropriate adjustment in the event
of a stock split, stock dividend, stock combination or recapitalization having
the same effect occurring before the issuance of the Shares.
Address For Notices:
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