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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 8, 2001
MAIL.COM, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 000-26371 13-3787073
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
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11 BROADWAY, 6TH FLOOR
NEW YORK, NY 10004
(Address of principal executive offices)
Registrant's telephone number, including area code (212) 425-4200
N/A
Former Name or Former Address, if Changed Since Last Report
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ITEM 5. OTHER EVENTS
Mail.com, Inc. ("Mail.com") completed on January 8, 2001 the issuance
of $10 million principal amount of 10% Senior Convertible Notes due January 8,
2006 (the "Notes") to Federal Partners, L.P. and certain accounts managed by
Zesiger Capital Group LLC. The Notes are joint and several obligations of
Mail.com and its subsidiaries Mail.com Business Messaging Services, Inc. and The
Allegro Group, Inc. (collectively, the "Companies").
The Notes bear interest semi-annually at the rate of 10% per annum. One
half of each interest payment is payable in cash and one half is payable in
shares of Mail.com Class A common stock, par value $.01 per share ("Class A
common stock"), until 18 months after the closing date of the financing.
Thereafter, one half of each interest payment may be paid in shares of Class A
common stock at the option of the Companies. For purposes of determining the
number of shares issuable upon payment of interest in shares of Class A common
stock, such shares will be deemed to have a value equal to the applicable
conversion price at the time of payment.
Each of the Notes is convertible at any time at the option of the
holder into Class A common stock at an initial conversion price equal to $1.00
per share. The conversion price is subject to anti-dilution adjustments.
The Companies may, at their option, prepay the Notes, in whole or in
part, at any time (i) on or after the third anniversary of the closing date of
the financing, (ii) if the closing price of the Class A common stock on the
NASDAQ stock market, or other securities market on which the Class A common
stock is then traded, is at or above $5.00 per share (such amount to be
appropriately adjusted in the event of a stock split, stock dividend, stock
combination or recapitalization or similar event having a similar effect) for 30
consecutive trading days or (iii) Mail.com desires to effect a merger,
consolidation or sale of all or substantially all of its assets in a manner that
is prohibited by the Note Purchase Agreement between Mail.com and the initial
purchasers of the Notes (the "Note Purchase Agreement") and the holders of the
Notes fail to consent to a waiver of such prohibition to permit such merger,
consolidation or sale.
The Companies are required under the Note Purchase Agreement, upon the
closing of the event giving rise to such prepayment, to prepay in whole or in
part any or all Notes for which the Companies have received written notice from
any holder of Notes that elects to be prepaid upon such event if either of the
following conditions shall occur (each, a "Mandatory Prepayment"); provided
that, in the case of clause (ii) below, such Mandatory Prepayment shall not
exceed the amount of net proceeds received by Mail.com in connection with such
event: (i) the lenders of any of the additional $40 million of indebtedness
permitted to be incurred as provided by the Note Purchase Agreement (excluding
the $15 million of Notes permitted to be incurred under the Note Purchase
Agreement) require a security interest in, or the release of the holders'
security interest in, the shares of India.com, Inc. that are pledged to secure
the Notes and any of such holders elect to be prepaid upon the consummation of
such financing, in which case the proceeds of such financing shall be applied to
the repayment of the Notes the holders of which have so elected to be prepaid,
or (ii) Mail.com decides to sell the shares of India.com, Inc. pledged to the
holders of the Notes and any of such holders elect to be prepaid upon the
consummation of such sale, in which case the net proceeds of such sale received
by Mail.com shall be applied to the repayment of the Notes so electing to be
prepaid. To the extent such net proceeds consist of securities or property other
than cash, such net proceeds shall be held in pledge under the Pledge Agreement
until converted into cash or released to Mail.com in accordance with the terms
of the
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Pledge Agreement and upon such conversion into cash shall be applied to such
prepayment as aforesaid unless so released to Mail.com prior thereto.
The Note Purchase Agreement contains certain customary covenants and
events of default, including certain limitations on the ability of the Companies
to incur additional indebtedness and additional liens on its assets.
The Notes are secured by a pledge of Mail.com's and its wholly-owned
subsidiary World.com, Inc.'s share interest in its majority owned subsidiary
India.com, Inc. The security interest will be released, among other
circumstances, (i) upon repayment of the Notes and accrued interest thereon,
(ii) upon a sale, transfer or other disposition of the shares as permitted under
the Note Purchase Agreement and the prepayment of Notes as become subject to
prepayment in accordance with the Note Purchase Agreement, or (iii) if Mail.com
raises at least $35 million in cash proceeds from the sale of assets (including
the pledged shares) or from the issuance of certain additional debt or equity
financings on or before April 30, 2001.
Mail.com granted shelf and piggyback resale registration rights to the
holders of the Notes with respect to the shares of Class A common stock issuable
upon conversion of the Notes or in payment of interest on the Notes pursuant to
a Registration Rights Agreement.
The net proceeds of the issuance of the Notes will be used for working
capital and other general corporate purposes.
In connection with the issuance of the Notes, Mail.com granted to
Federal Partners, L.P. the right to designate one director to the Board of
Directors for so long as Federal Partners and certain other parties associated
with it own a specified number of shares of Class A common stock on a fully
diluted basis (the "Designation Agreement"). Pursuant to the Designation
Agreement, the Board of Directors appointed Stephen M. Duff as a director of
Mail.com effective upon the closing of the financing.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit 99.1 Note Purchase Agreement dated as of January 8,
2001, by and among Mail.com, Inc., Mail.com Business
Messaging Services, Inc., The Allegro Group, Inc. and
the purchasers listed therein.*
Exhibit 99.2 Pledge Agreement dated as of January 8, 2001, by
and among Mail.com, Inc. and World.com, Inc. as
pledgors, the holders of Notes listed therein and The
Clark Estates, Inc. as collateral agent on behalf of
the holders of Notes.
Exhibit 99.3 Registration Rights Agreement dated as of January 8,
2001, by and among Mail.com, Inc. and the holders of
Notes listed therein.
Exhibit 99.4 Designation Letter dated January 8, 2001 from
Mail.com, Inc. to Federal Partners, L.P.
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* Disclosure schedules and other attachments to the Note Purchase Agreement are
omitted, but will be furnished supplementally to the Commission upon request.
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SIGNATURE
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.
Dated: January 10, 2001
MAIL.COM, INC.
By: /s/ Thomas Murawski
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Thomas Murawski
Chief Executive Officer
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EXHIBIT INDEX
Exhibit 99.1 Note Purchase Agreement dated as of January 8,
2001, by and among Mail.com, Inc., Mail.com Business
Messaging Services, Inc., The Allegro Group, Inc. and
the purchasers listed therein.*
Exhibit 99.2 Pledge Agreement dated as of January 8, 2001, by
and among Mail.com, Inc. and World.com, Inc. as
pledgors, the holders of Notes listed therein and The
Clark Estates, Inc. as collateral agent on behalf of
the holders of Notes.
Exhibit 99.3 Registration Rights Agreement dated as of January 8,
2001, by and among Mail.com, Inc. and the holders of
Notes listed therein.
Exhibit 99.4 Designation Letter dated January 8, 2001 from
Mail.com, Inc. to Federal Partners, L.P.
* Disclosure schedules and other attachments to the Note Purchase Agreement are
omitted, but will be furnished supplementally to the Commission upon request.
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