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): Commission File Number:
August 23, 1999 1-10210
eGLOBE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3486421
(State or other jurisdiction (IRS Employer
of incorporation) Identification Number)
1250 24TH STREET, N.W., SUITE 725
WASHINGTON, D.C. 20037
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,including area code:
(202) 822-8981
(Former name or former address, if changed since last report)
NOT APPLICABLE
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eGLOBE, INC.
ITEM 5 OTHER EVENTS
GENERAL
eGlobe, Inc., (the "Company") took several significant actions
after August 17, 1999 in response to decisions by Nasdaq regarding the listing
of the Company's Common Stock on the Nasdaq National Market. The purpose of this
filing is to disclose in more detail the Nasdaq decisions, discuss the actions
taken by the Company, and present an unaudited pro forma condensed
consolidated balance sheet as of July 31, 1999 that reflects those actions as
well as the Company's acquisition in early August of the Network Operating
Center and related switching and transmission facilities of Swiftcall USA, Inc.
LISTING ON THE NASDAQ NATIONAL MARKET
The Company was notified by a letter from Nasdaq at the end of
the business day on August 17, 1999 that trading in the Common Stock would be
moved from the Nasdaq National Market to the OTC Bulletin Board on Wednesday,
August 18, 1999. The Company immediately requested reconsideration of the
decision, and the Common Stock of the Company resumed trading on the Nasdaq
National Market effective at the opening of trading on Monday, August 23, 1999.
The Company's continued listing on the Nasdaq National Market is subject to its
maintaining compliance with certain requirements imposed by Nasdaq that are
related to the amount of "net tangible assets" reported by the Company on its
balance sheet.
As a result of the restructuring of the Company in 1998 and
the initiation of its growth plan at the beginning of 1999, the Company's
compliance with the net tangible asset requirement of the Nasdaq National Market
continued listing criteria became an issue which needed to be resolved between
Nasdaq and the Company. Net tangible assets, as defined by Nasdaq, equals assets
minus liabilities and minus goodwill. Following an inquiry by Nasdaq to the
Company, written submissions by the Company, and a hearing before a Nasdaq
listing qualifications panel, Nasdaq concluded in July and advised the Company
on August 10, 1999 that the Company had presented a plan which would enable it
to comply with all requirements for continued listing on an ongoing basis.
Accordingly, Nasdaq continued the listing of the Company's securities on the
Nasdaq National Market.
The August 10 determination required that the Company
demonstrate that it was implementing the plan by (1) reporting, on its 10-Q for
the quarter ended June 30, 1999, a minimum of $9.9 million in net tangible
assets, and (2) making a public filing with the SEC by October 15, 1999
reporting $20.0 million in net tangible assets.
On August 16, 1999, the Company filed its quarterly report on
Form 10-Q containing a June 30, 1999 unaudited condensed consolidated balance
sheet with pro forma adjustments. The Form 10-Q reported what the Company
believed to be net tangible assets of $10.5 million. However, on August 17,
Nasdaq informed the Company that it failed to satisfy the $9.9 million net
tangible asset
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requirement set by the panel. This decision resulted from the treatment of $3
million of the Company's redeemable preferred stock by Nasdaq as a liability for
purposes of the tangible net asset calculation; the Company (reflecting the
required balance sheet treatment pursuant to GAAP) had not treated this
redeemable preferred stock as a liability. Such redeemable preferred stock was
reflected outside of Stockholders Equity as temporary equity.
In seeking reconsideration and in discussions with Nasdaq
relative to the reconsideration, the Company recognized the need to further
restructure its balance sheet, in response to the Nasdaq treatment of redeemable
stock. After consultations with Nasdaq, it under took several actions which are
elaborated below and which resulted in a positive decision on Friday, August 20
by Nasdaq to return the Company to its National Market Listing. In restoring the
Company to its listing, Nasdaq required the Company to meet two specific
requirements for continued listing. The Company must make a public filing with
the SEC by September 3, 1999 which includes a July 31, 1999 unaudited condensed
consolidated balance sheet evidencing a minimum of $9.9 million of net tangible
assets. The Company must make a further filing by October 15, 1999 which
includes an August 31, 1999 unaudited condensed consolidated balance sheet
evidencing a minimum of $20.0 million of net tangible assets.
The Nasdaq August 20, 1999 letter is attached hereto as
Exhibit 99.1 and the press release issued by the Company regarding the above on
August 20, 1999 is attached hereto as Exhibit 99.2.
The Company believes that it has met the $9.9 million net
tangible asset requirement. The Company believes that it will meet the $20.0
million net tangible asset requirement, through a combination of financings and
acquisitions in which it plans to issue equity securities. There is no
assurance, however, that Nasdaq will not differ with the Company's analysis
regarding the $9.9 million net tangible asset requirement, that the Company will
be able to satisfy the $20.0 million net tangible asset requirement, or that
Nasdaq will not impose subsequent and different requirements. If the Company is
unable to meet the requirements, the Common Stock likely would be transferred to
the Nasdaq SmallCap Market or OTC Bulletin Board. If such an event occurs, the
liquidity of the Common Stock could be impaired, the Common Stock could be
subject to price fluctuations upon such transfer and the Company could
experience greater difficulty in raising capital or making acquisitions using
its equity securities.
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RECENT TRANSACTIONS
Acquisition of Network Operating Center. On August 9, 1999 the
Company announced the acquisition of the Network Operating Center ("NOC") and
related switching and transmission facilities of Swiftcall USA, Inc. Combined
with operating facilities of the Network Services division of eGlobe in Reston,
Virginia, the NOC gives the Company a gateway for its growing Internet voice and
fax business, as well as an enhanced facility for circuit-switched telephone
services. The Company acquired the NOC for an aggregate purchase price of
$3,430,000, consisting of (i)$3,290,000 due in two equal payments on December 3,
1999 and June 2, 2000 payable in shares of common stock and (ii) direct
acquisition costs of approximately $140,000. The acquisition was accounted for
using the purchase method of accounting. The preliminary allocation reflects the
preliminary estimates of the fair value of the assets acquired and liabilities
assumed based on management's review and third-party appraisals. The final
purchase price allocation will be determined as additional information becomes
available. In August 1999, the Company borrowed the remaining $1.5 million under
its $20.0 million secured note agreement and used $1.1 million to prepay a
certain Swiftcall lease.
Issuance of Preferred Stock to Prepay $4 million of
$20 million note to EXTL Investors. On the basis of agreements reached on August
18, 1999, the Company will issue to EXTL Investors 40 shares of 5% Series J
Cumulative Convertible Preferred Stock (the "Series J Preferred Stock"), as
prepayment of $4 million of the outstanding $20 million secured note issued to
EXTL Investors. The carrying value of the $4.0 million note, net of unamortized
discount of $2.1 million, was approximately $1.9 million. The excess of the fair
value of the Series J Preferred over the carrying value of the note of $2.1
million will be recorded as a loss on debt extinguishment in September 1999. The
$4.0 million prepayment was allocated to reflect a reduction of $649,000 in the
current portion of the note with the remainder to reduce long-term maturities.
Terms of Series J Preferred Stock.
The conversion of the debt to Series J Preferred
Stock has been irrevocably agreed. Final documentation is substantially
completed and is expected to be executed in the next several days. The terms of
the Series J Preferred Stock as currently agreed are outlined below.
Voting Rights. The holders of the Series J Preferred
Stock do not have voting rights, unless otherwise provided by Delaware
corporation law or unless dividends payable on the Series J Preferred Stock are
in arrears for six quarters, at which time the Series J Preferred Stock would be
entitled to vote as a separate class to elect one director to the Company's
Board of Directors at the next stockholders' meeting. The affirmative vote of
66-2/3% of the holders of the Series J Preferred Stock is required for the
issuance of any class or series of stock of the Company ranking senior to or on
a parity with the Series J Preferred Stock as to dividends or rights on
liquidation, winding up and dissolution.
Liquidation Rights. The holders of the Series J
Preferred Stock are entitled, together with any preferred stock ranking on a
parity with the Series J Preferred Stock, to a liquidation preference over the
Common Stock and any junior preferred stock, but after payment of all
preferential amounts due holders of senior preferred stock, equal to $100,000
per share, plus any accrued and unpaid dividends.
Dividends. The Series J Preferred Stock carries an
annual dividend of 5% which is payable quarterly, beginning December 31, 2000,
if declared by the Company's Board of Directors. If the Board of Directors does
not declare dividends, they accrue and remain payable. All dividends that would
accrue through December 31, 2000 on each share of Series J Preferred Stock,
whether or not then accrued, will be payable in full upon conversion of such
share of Series J Preferred Stock. No dividends may be granted on Common Stock
or any preferred stock ranking junior to the Series J Preferred Stock until all
accrued but unpaid dividends on the Series J Preferred Stock are paid in full.
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Conversion. The shares of Series J Preferred Stock
are convertible, at the holder's option, into shares of the Common Stock at any
time at a conversion price equal to the most recent closing market price prior
to the date of agreement. The shares of Series J Preferred Stock are also
convertible into Common Stock at a lower price upon a change of control (as
defined) if the market price of the Common Stock on the date immediately
preceding the change of control is less than the conversion price. The shares of
Series J Preferred Stock will automatically be converted into shares of Common
Stock, on the earliest to occur of (x) the first date as of which the last
reported sales price of the Common Stock on Nasdaq is $5.00 or more for any 20
consecutive trading days during any period in which Series J Preferred Stock is
outstanding, (y) the date that 80% or more of the Series J Preferred Stock the
Company have issued has been converted into Common Stock, or (z) the Company
completes a public offering of equity securities at a price of at least $3.00
per share and with gross proceeds to the Corporation of at least $20 million.
The Certificate of Designations of Series J Preferred
Stock provides for adjustments to the number of shares issuable upon conversion
in the event of certain dividends and distributions to holders of Common Stock,
certain reclassifications of the Common Stock, stock splits, combinations and
mergers and similar transactions and certain changes of control. In addition,
the Certificate of Designations of the Series J Preferred Stock provides for
adjustment to the conversion price if the Company sells stock for less than the
conversion price.
No Redemption. The shares of the Series J Preferred
Stock are not subject to optional or mandatory redemption.
Exchange of New Preferred Stock for Series G Cumulative
Convertible Redeemable Preferred Stock. On the basis of agreements reached on
August 19, 1999, the Company issued 30 shares of 5% Series K Cumulative
Convertible Preferred Stock (the "Series K Preferred Stock") in exchange for the
share of its Series G Cumulative Convertible Redeemable Preferred Stock (the
"Series G Redeemable") held by American United Global, Inc. Nasdaq determined
that the Series G Redeemable, which was valued at $3,006,411 on the Company's
June 30, 1999 unaudited condensed consolidated balance sheet, should be treated
as a liability for the tangible net asset calculation which reduced the
Company's net tangible asset calculation set forth in its quarterly report filed
on August 16, 1999. The exchange of the Series G Redeemable for the
nonredeemable Series K Preferred should permit the Series K Preferred Stock to
be classified as equity rather than a liability on the Company's July 31, 1999
unaudited condensed consolidated balance sheet.
Terms of Series K Preferred Stock
Voting Rights. The holders of the Series K Preferred
Stock do not have voting rights, unless otherwise provided by Delaware
corporation law or unless dividends payable on the Series K Preferred Stock are
in arrears for six quarters, at which time the Series K Preferred Stock would be
entitled to vote as a separate class to elect one director to the Company's
Board of Directors at the next stockholders' meeting. The affirmative vote of
66-2/3% of the holders of the
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Series K Preferred Stock is required for the issuance of any class or series of
stock of the Company ranking senior to or on a parity with the Series K
Preferred Stock as to dividends or rights on liquidation, winding up and
dissolution.
Liquidation Rights. The holders of the Series K
Preferred Stock are entitled, together with any preferred stock ranking on a
parity with the Series K Preferred Stock, to a liquidation preference over the
Common Stock and any junior preferred stock, but after payment of all
preferential amounts due holders of senior preferred stock, equal to $100,000
per share, plus any accrued and unpaid dividends.
Dividends. The Series K Preferred Stock carries a
annual dividend of 5% which is payable quarterly, beginning December 31, 2000,
if declared by the Company's Board of Directors. If the Board of Directors does
not declare dividends, they accrue and remain payable. All dividends that would
accrue through December 31, 2000 on each share of Series K Preferred Stock,
whether or not then accrued, will be payable in full upon conversion of such
share of Series K Preferred Stock. No dividends may be granted on Common Stock
or any preferred stock ranking junior to the Series K Preferred Stock until all
accrued but unpaid dividends on the Series K Preferred Stock are paid in full.
Conversion. The shares of Series K Preferred Stock
are convertible, at the holder's option, into shares of the Common Stock at any
time at a conversion price equal to the most recent closing market price prior
to agreement. The shares of Series K Preferred Stock are also convertible into
Common Stock at a lower price upon a change of control (as defined) if the
market price of the Common Stock on the date immediately preceding the change of
control is less than the conversion price. The shares of Series K Preferred
Stock will automatically be converted into shares of Common Stock, on the
earliest to occur of (x) the first date as of which the last reported sales
price of the Common Stock on Nasdaq is $5.00 or more for any 20 consecutive
trading days during any period in which Series K Preferred Stock is outstanding,
(y) the date that 80% or more of the Series K Preferred Stock the Company have
issued has been converted into Common Stock, or (z) the Company completes a
public offering of equity securities at a price of at least $3.00 per share and
with gross proceeds to the Corporation of at least $20 million.
The Certificate of Designations of Series K
Preferred Stock provides for adjustments to the number of shares issuable upon
conversion in the event of certain dividends and distributions to holders of
Common Stock, certain reclassifications of the Common Stock, stock splits,
combinations and mergers and similar transactions and certain changes of
control. In addition, the Certificate of Designations of the Series K Preferred
Stock provides for adjustment to the conversion price if the Company sells stock
for less than the conversion price.
No Redemption. The shares of the Series K Preferred
Stock are not subject to optional or mandatory redemption.
The Exchange Agreement and Certificate of Designations of
Series K Preferred Stock are attached hereto as Exhibits 2.1 and 4.1.
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Exercise of Warrants. Pursuant to agreements reached on August
19, 1999, holders of warrants exercised them and purchased 712,518 shares of
Common Stock for an aggregate purchase price of $716,254.
The effect of these transactions on the Company's Unaudited
Condensed Consolidated balance sheet is an addition to stockholders' equity.
Sale of Restricted Stock. Pursuant to agreement on August 25,
1999, a shareholder of the Company purchased 160,257 shares of restricted Common
Stock for an aggregate purchase price of $250,000. The effect of this
transaction on the Company's unaudited condensed consolidated balance sheet is
an addition to equity.
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<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
eGLOBE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JULY 31, 1999
<TABLE>
<CAPTION>
eGLOBE
AS OF 7/31/99 ADJUSTMENTS PRO FORMA
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents $ 3,451,350 $ 1,366,000 (2) $ 4,817,350
Accounts receivable, net 8,598,206 - 8,598,206
Other current assets 1,540,956 - 1,540,956
=========== =========== ===========
TOTAL CURRENT ASSETS 13,590,512 1,366,000 14,956,512
=========== =========== ===========
PROPERTY AND EQUIPMENT, NET 12,381,115 4,937,000 (1) 17,318,115
GOODWILL, NET 15,067,196 - 15,067,196
OTHER INTANGIBLES, NET 12,488,113 - 12,488,113
OTHER ASSETS 1,874,935 (140,000) (1) 1,734,935
=========== =========== ===========
TOTAL ASSETS $ 55,401,871 $ 6,163,000 $ 61,564,871
=========== =========== ===========
LIABILITIES, REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 7,882,883 $ 407,000 (1)(2) $ 8,289,883
Accrued expenses 7,678,822 - 7,678,822
Notes payable principally related to acquisitions 1,125,000 - 1,125,000
Note payable and current maturities of long-term debt 6,205,198 (649,000) (3) 5,556,198
Other current liabilities 2,784,099 - 2,784,099
=========== =========== ===========
TOTAL CURRENT LIAIBLITIES 25,676,002 (242,000) 25,434,002
=========== =========== ===========
LONG-TERM DEBT, NET OF CURRENT MATURITIES 8,586,091 269,000 (3) 8,855,091
=========== =========== ===========
TOTAL LIABILITIES 34,262,093 27,000 34,289,093
=========== =========== ===========
REDEEMABLE PREFERRED STOCK 3,021,411 (3,021,411) (4) -
=========== =========== ===========
STOCKHOLDERS' EQUITY
Preferred stock 1,913 - 1,913
Common stock 20,063 1,000 (5) 21,063
Additional paid-in capital 67,325,885 7,986,411 (4)(5) 75,312,296
Stock to be issued 978,690 3,290,000 (1) 4,268,690
Accumulated deficit (50,397,079) (2,120,000) (5) (52,517,079)
Accumulated other comprehensive loss 188,895 - 188,895
=========== =========== ===========
TOTAL STOCKHOLDERS' EQUITY 18,118,367 9,157,411 27,275,778
=========== =========== ===========
TOTAL LIABILITIES, REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY $ 55,401,871 $ 6,163,000 $ 61,564,871
=========== =========== ===========
</TABLE>
See notes to the pro forma condensed consolidated balance sheet
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eGLOBE, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
The transactions described in Item 5, "Other Transactions", are discussed below:
(a) In August 1999, the Company acquired Swiftcall for an aggregate
purchase price of $3,430,000, consisting of (i) $3,290,000 due in
two equal payments on December 3, 1999 and June 2, 2000 payable in
shares of common stock and (ii) direct acquisition costs of
approximately $140,000. The acquisition was accounted for using
the purchase method of accounting. The preliminary allocation
reflects the preliminary estimates of the fair value of the assets
acquired and liabilities assumed based on management's review and
third-party appraisals. The final purchase price allocation will
be determined as additional information becomes available.
(b) In August 1999, the Company borrowed the remaining $1.5 million
under its $20.0 million secured note agreement and used $1.1
million to prepay a certain Swiftcall lease.
(c) Based on an agreement signed on September 2, 1999, the Company
plans to issue 40 shares of 5% Series J Cumulative Convertible
Preferred Stock ("Series J Preferred") valued at $4.0 million as
prepayment of $4.0 million of the outstanding $20.0 million
secured note agreement. The carrying value of the $4.0 million
note, net of unamortized discount of $2.1 million, is
approximately $1.9 million. The excess of the fair value of the
Series J Preferred over the carrying value of the note of $2.1
million will be recorded as a loss on debt extinguishment in
September 1999. The $4.0 million prepayment was allocated to
reflect a reduction of $649,000 in the current portion of the
note with the remainder to reduce long-term maturities.
(d) On September 3, 1999, the Company issued 30 shares of 5% Series K
Cumulative Convertible Preferred Stock ("Series K Preferred") in
exchange for the share of Series G Cumulative Convertible
Redeemable Preferred Stock ("Series G Preferred").
(e) On August 25, 1999, a stockholder of the Company purchased
160,257 shares of restricted common stock for an aggregate
purchase price of $250,000.
(f) In August 1999, the Company received proceeds of $716,000 from the
exercise of warrants to acquire 712,518 shares of common stock.
The following pro forma adjustments to the unaudited pro forma condensed
consolidated balance sheet are as if the above transactions occurred as of July
31, 1999:
(1)To reflect the acquisition of Swiftcall. The components of the purchase
price and its preliminary allocation to the assets and liabilities
acquired are as follows:
<TABLE>
<S> <C>
COMPONENTS OF PURCHASE PRICE:
Common stock to be issued $ 3,290,000
Direct acquisition costs 140,000
------------------
TOTAL PURCHASE PRICE 3,430,000
ALLOCATION OF PURCHASE PRICE:
Property and equipment (4,937,000)
Current liabilities 1,507,000
------------------
TOTAL $ -
==================
</TABLE>
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eGLOBE, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
(2)Adjustments to cash:
<S> <C>
Proceeds from exercise of warrants (See Note 5) $ 716,000
Proceeds from common stock purchase (See Note 5) 250,000
Proceeds from notes payable 1,500,000
Payment of for Swiftcall liabilities (1,100,000)
------------------
$ 1,366,000
==================
</TABLE>
<TABLE>
<CAPTION>
(3)Adjustments to debt: Notes payable/
current maturities
of long-term debt Long-term debt, net
-----------------------------------------
<S> <C> <C>
Proceeds from notes payable under secured note agreement $ - $ 1,500,000
Prepayment of secured notes, with Series J Preferred Stock
net of unamortized discount of $2,120,000 (See Note 5) (649,000) (1,231,000)
-------------------------------------
$ (649,000) $ 269,000
=====================================
</TABLE>
(4) Adjustment to Redeemable Preferred Stock (See Note 5):
<TABLE>
<S> <C>
Exchange of Series G Redeemable Preferred Stock for Series
K Preferred Stock $ (3,021,411)
==================
</TABLE>
<TABLE>
<CAPTION>
(5)Other adjustments to Stockholders' Equity: Additional Accumulated
Common Stock Paid-in Capital Deficit
-----------------------------------------------------
<S> <C> <C> <C>
Issuance of common stock under warrants agreements $ 1,000 $ 715,000 $ -
Issuance of common stock under purchase agreement - 250,000 -
Issuance of Series J Preferred Stock - 4,000,000 (2,120,000)
Issuance of Series K Preferred Stock (See Note 4) - 3,021,411 -
-----------------------------------------------------
$ 1,000 $ 7,986,411 $ (2,120,000)
=====================================================
</TABLE>
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(c) Exhibits.
2.1 Exchange Agreement dated as of September 3, 1999 by and between
eGlobe, Inc. and American United Global, Inc.
4.1 Certificate of Designations for 5% Series K Cumulative Convertible
Preferred Stock
99.1 Letter from the Nasdaq, dated August 20, 1999, regarding the
Company's re-listing on Nasdaq National Market.
99.2 Press Release, dated August 20, 1999, regarding the Company's
re-listing on Nasdaq National Market.
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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.
eGLOBE, INC.
Date: September 3, 1999 By: /s/ Graeme S.R. Brown
------------------------------
Graeme S.R. Brown
Associate General Counsel and
Assistant Secretary
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EXHIBIT INDEX
Exhibit Description
- ------- -----------
2.1 Exchange Agreement dated as of [September 2], 1999 by and between
eGlobe, Inc. and American United Global, Inc.
4.1 Certificate of Designations for 5% Series K Cumulative Convertible
Preferred Stock
99.1 Letter from the Nasdaq, dated August 20, 1999, regarding the
Company's re-listing on Nasdaq National Market.
99.2 Press Release, dated August 20, 1999, regarding the Company's
re-listing on Nasdaq National Market.
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EXHIBIT 2.2
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (the "Agreement") is entered into this 1st day
of September, 1999, by and between American United Global, Inc. ("AUGI"); and
eGlobe, Inc. (f/k/a Executive TeleCard, Ltd.), a Delaware corporation
("eGlobe").
WHEREAS, American United Global, Inc., Connectsoft Communications
Corporation ("CCC"), Connectsoft Holding Corp. ("Connectsoft"), eGlobe, C-Soft
Acquisition Corp. (the "Buyer") and Vogo Networks, LLC, a Delaware limited
liability company of which eGlobe is the only member ("Vogo LLC") entered into
an Asset Purchase Agreement ("Purchase Agreement") dated July 10, 1998, as
subsequently amended;
WHEREAS, eGlobe, through its subsidiary Vogo LLC, purchased
substantially all the assets of Connectsoft and CCC, for which eGlobe issued one
share of its 6% Series G Cumulative Convertible Redeemable Preferred Stock (the
"Series G Preferred Stock");
WHEREAS, AUGI and eGlobe desire to enter into new arrangements with
respect to the Series G Preferred Stock;
NOW, THEREFORE, in consideration of the promises, the mutual
representations, warranties and covenants set forth herein, eGlobe and AUGI
hereby agree as follows:
1. Exchange. Within 5 business days following the execution and
delivery of this Agreement (the "Closing"), AUGI shall deliver its issued and
outstanding share of Series G Preferred Stock to eGlobe at eGlobe's principal
place of business as set forth on the signature page hereto and eGlobe will
immediately issue and deliver to AUGI 30 shares (the "Series K Shares") of
Series K Cumulative Convertible Preferred Stock, par value $.001 per share, of
eGlobe (the "Series K Preferred Stock") at the address for AUGI as set forth on
the signature page hereto.; The terms of the Series K Preferred Stock shall be
as set forth in the form of Certificate of Designations for the Series K
Preferred Stock attached hereto as Exhibit A.
2. Registration Rights. The Registration Rights Agreement dated June
17, 1999 between eGlobe and AUGI (the "Registration Rights Agreement") shall
remain in full force and effect notwithstanding the exchange contemplated by
this Agreement. The Series K Shares shall for all purposes be Registrable
Securities (as defined in the Registration Rights Agreement).
3. Closing. At the Closing, to the extent permitted by law, AUGI's
share of Series G Preferred Stock shall, by virtue of AUGI's execution of this
Agreement, be deemed converted into the right to receive 30 shares of Series K
Preferred Stock. As a result of AUGI's execution of this Agreement, to the
extent permitted by law, such share of Series G Preferred Stock shall cease to
be outstanding and shall be canceled and retired and shall cease to exist even
if the certificate representing such share of Series G Preferred Stock is not
surrendered.
<PAGE>
4. Miscellaneous.
(a) Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of AUGI and eGlobe.
(b) Waiver. Any breach of any obligation, covenants, agreement
or condition contained herein shall be deemed waived by the non-breaching party,
only by a writing, setting forth with particularity the breach being waived and
the scope of the waiver, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other breach. No waiver shall be
implied from any conduct or action of the non-breaching party. No failure or
delay by any party in exercising any right, power or privilege hereunder or
under the Series B Preferred Stock, the Replacement Warrants or the Series I
Preferred Stock and no course of dealing by any party shall operate as a waiver
and any right, power or privilege hereunder or under the Series B Preferred
Stock, the Replacement Warrants or the Series I Preferred Stock nor shall any
single or partial exercise thereof or the exercise of any other right, power or
privilege.
(c) Binding Nature of Agreement. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
any of the parties hereto without the prior written consent of the other
parties. Any such assignment without the prior written consent of all the
parties shall be invalid.
(d) Governing Law. This Agreement and the legal relations
among the parties hereto shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and performed
therein.
(e) Expenses. Except as provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
(f) Counterparts. This Agreement may be signed in counterparts
with the same effect as if all parties had signed one and the same instrument.
(g) Form of Signature. The parties hereto agree to accept a
facsimile transaction copy of their respective signatures as evidence of their
respective actual signatures to this Agreement; provided, however, that each
party who produces a facsimile signature agreement, by the express terms hereof,
to place, immediately after transmission of its signature by fax, a true and
correct original copy of its signature in overnight mail to the address of the
other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
eGlobe, Inc.
By:
------------------------------------------------
Christopher J. Vizas
Chairman and Chief Executive Officer
Address: 1250 24th Street, NW, Suite 725
Washington, DC 20037
American United Global, Inc.
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
Address: c/o Gersten, Savage & Kaplowitz LLP
101 E. 52nd Street
New York, NY 10022
3
EXHIBIT 4.2
CERTIFICATE OF DESIGNATIONS
RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS
OF 5% SERIES K CUMULATIVE CONVERTIBLE
PREFERRED STOCK BY RESOLUTION OF
THE BOARD OF DIRECTORS OF
EGLOBE, INC.
PURSUANT TO SECTION 151 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
5% SERIES K CUMULATIVE CONVERTIBLE
PREFERRED STOCK
I, Christopher J. Vizas, Chairman of the Board of eGlobe, Inc. (the
"Corporation"), a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware ("DGCL"), DO HEREBY CERTIFY
that, pursuant to authority conferred upon the Board of Directors by the
Restated Certificate of Incorporation, as amended, of the Corporation (the
"Certificate of Incorporation"), the Board of Directors, in accordance with the
provisions of Section 151 of the DGCL, adopted the following resolution,
effective as of August 25, 1999 providing for the creation of the 5% Series K
Cumulative Convertible Preferred Stock:
RESOLVED that, pursuant to Article IV of the Certificate of
Incorporation of the Corporation, there be and hereby is authorized and created
a series of Cumulative Convertible Preferred Stock consisting of 30 shares
having a par value of $.001 per share, which series shall be titled "5% Series K
Cumulative Convertible Preferred Stock."
The designations, rights, preferences, privileges and restrictions of
the 5% Series K Cumulative Convertible Preferred Stock shall be made as follows:
1. Designation and Amount. This series of Preferred Stock shall be
designated and known as "5% Series K Cumulative Convertible Preferred Stock"
(the "Series K Preferred Stock") and shall consist of 30 shares. The par value
of the Series K Preferred Stock shall be $.001 per share. Certain defined terms
used herein are defined in paragraph 10 below.
2. Voting. 2(a) Except as may be otherwise provided by these terms of
the Series K Preferred Stock or by law, the holders of Series K Preferred Stock
shall have no voting rights unless dividends payable on the shares of Series K
Preferred Stock are in arrears for six quarterly periods, in which case the
holders of Series K Preferred Stock voting separately as a class with the shares
of any other Preferred Stock having similar voting rights, will be entitled at
the next regular or special meeting of stockholders of the Corporation to elect
one director (such voting rights will continue until such time as the dividend
arrearage on Series K Preferred Stock has been paid in full). The affirmative
vote or consent of holders of at least 66 2/3% of the outstanding shares of
Series K Preferred Stock will be required for the issuance of any class or
series of stock of the Corporation ranking senior to or pari passu with the
shares of Series K
<PAGE>
Convertible Preferred Stock (other than the series of Preferred Stock authorized
as of the date hereof and other than the Series J Preferred Stock, which is
presently proposed to be authorized), each par value $.001 per share, authorized
as of the date hereof) as to dividends or rights on liquidation, winding up and
dissolution.
2(b) Whenever holders of Series K Preferred Stock are required or
permitted to take any action by vote as a single class or series, such action
may be taken without a meeting by written consent, setting forth the action so
taken and signed by the holders of the Series K Preferred Stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted.
3. Dividends. 3(a) The holders of the Series K Preferred Stock shall be
entitled to receive, out of funds legally available therefor, when, as and if
declared by the Board of Directors, cumulative annual dividends of 5.0% of the
Liquidation Amount (as defined below) per share of Series K Preferred Stock
outstanding (the "Accruing Dividends"). Accruing Dividends shall accrue from the
Issue Date (whether or not the Corporation has earnings, there are funds legally
available therefor or such dividends are declared) and shall be fully
cumulative. Accruing Dividends shall be payable quarterly out of assets legally
available therefor on March 31, June 30, September 30 and December 31 (each of
such dates being hereinafter referred to as a "Dividend Payment Date"),
commencing December 31, 2000, when, as and if declared by the Board of
Directors. All dividends that would accrue through December 31, 2000 on each
share of Series K Preferred Stock (whether or not then accrued) shall be payable
in full upon conversion of such share (when, as and if declared by the Board of
Directors).
3(b) On each Dividend Payment Date commencing December 31, 2000, or
upon conversion of Series K Preferred Stock (subject to Section 5(a)(vii)),
Accruing Dividends are payable in additional fully paid nonassessable shares of
the Common Stock of the Corporation; provided, however that the Corporation may
pay Accruing Dividends in common stock only to the extent that such payment
would not require shareholder approvals (including under rules of the Nasdaq
Stock Market) or such shareholder approvals shall have been obtained.
3(c) All shares of Series K Preferred Stock which may be issued as a
dividend will thereupon be duly authorized, validly issued, fully paid and
nonassessable.
3(d) The record date for the payment of Accruing Dividends shall,
unless otherwise altered by the Corporation's Board of Directors, be the
fifteenth day of the month immediately preceding the month in which the Dividend
Payment Date occurs, but in no event more than sixty (60) days nor less than ten
(10) days prior to the Dividend Payment Date
3(e) No dividends shall be granted on any Common Stock or other Junior
Stock unless and until all accrued but unpaid dividends with respect to the
Series K Preferred Stock have been paid in full. Accruing Dividends shall not be
payable unless and until all accrued but unpaid dividends with respect to any
Senior Stock then outstanding have been paid in full. All
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dividends with respect to the Series K Preferred Stock shall be payable on a
parity basis with dividends (including accrued but unpaid dividends) on Parity
Stock.
4. Liquidation. 4(a) (i) Upon any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the holder(s) of each
outstanding share of Series K Preferred Stock shall first be entitled, before
any distribution or payment is made upon any Junior Stock but after the full
liquidation preference has been paid with respect to all Senior Stock, and on a
parity basis with all Parity Stock, to be paid, in the case of each such share,
an amount equal to $100,000 per share of Series K Preferred Stock (the
"Liquidation Amount"), plus accrued and unpaid dividends thereon (collectively,
the "Liquidation Preference"). If upon such liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the assets to be
distributed among the holders of Series K Preferred Stock shall be insufficient
to permit payment in full to all holders of Series K Preferred Stock of the
aggregate Liquidation Preference and the amount of any payment to all holders of
any other class or series of Preferred Stock ranking on parity with the Series K
Preferred Stock as to liquidation, then the entire assets of the Corporation to
be so distributed shall be distributed ratably among the holders of Series K
Preferred Stock and the holders of any other class or series of Preferred Stock
ranking on parity with the Series K Preferred Stock as to liquidation, in
accordance with the respective amounts payable on liquidation upon the shares of
Series K Preferred Stock and such Preferred Stock ranking on parity with the
Series K Preferred Stock as to liquidation. After payment in full to the holders
of Series K Preferred Stock of the aggregate Liquidation Preference as
aforesaid, holders of the Series K Preferred Stock shall, as such, have no right
or claim to any of the remaining assets of the Corporation.
(ii) Written notice of any such liquidation, dissolution or winding up,
stating a payment date and the place where said payments shall be made, shall be
given (A) by certified or registered mail, postage prepaid, (B) by a nationally
known overnight delivery service or (C) by hand, not less than 45 days prior to
the payment date stated therein, to each holder of record of Series K Preferred
Stock, such notice to be addressed to each such holder at its address as shown
by the records of the Corporation.
4(b) None of the merger or the consolidation of the Corporation, or the
sale, lease or conveyance of all or substantially all of its property and
business as an entirety, shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this paragraph 4, unless
such sale, lease, or conveyance shall be in connection with a plan of
liquidation, dissolution or winding up of the Corporation.
5. Conversion. The holders of shares of Series K Preferred Stock shall
have the following conversion rights:
5(a). Right to Convert. (i) Subject to the terms and conditions of
paragraph 5, from and after the Issue Date, any share or shares of Series K
Preferred Stock shall be convertible at the option of the holder into such
number of fully paid and nonassessable shares of Common Stock (the "Conversion
Rate") as is obtained by (1) multiplying the number of shares of Series K
Preferred Stock by the Liquidation Amount and (2) dividing the result by an
initial conversion
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price equal to $1.56 (such conversion price, as it may have last been adjusted
pursuant to the terms hereof, is referred to herein as the "Conversion Price").
(ii) Each share of Series K Preferred Stock shall automatically be
converted into shares of Common Stock, based on the then-effective Conversion
Rate, on the earliest to occur of (1) the first date as of which the last
reported sales price of the Common Stock on Nasdaq is $5.00 or more for any 20
consecutive trading days during any period in which Series K Preferred Stock is
outstanding, (2) the date that 80% or more of the Series K Preferred Stock
issued by the Corporation, cumulatively from and after the date hereof, whether
or not such Series K Preferred Stock is then outstanding, has been converted
into Common Stock, the holders thereof have agreed with the Corporation in
writing to convert such Series K Preferred Stock into Common Stock or a
combination of the foregoing, or (3) the Corporation closes a public offering of
equity securities of the Corporation at a price of at least $3.00 per share and
with gross proceeds to the Corporation of at least $20 million.
(iii) Upon any Change of Control, however, each holder of Series K
Preferred Stock shall, in the event that the last reported sale price of the
Common Stock on Nasdaq on the date immediately preceding the date of the Change
of Control (the "Change of Control Price") is less than the Conversion Price,
have a one time right to convert such holder's shares of Series K Preferred
Stock into shares of the Common Stock at a conversion price equal to the Change
of Control Price. In lieu of issuing the shares of Common Stock issuable upon
conversion in the event of a Change of Control, the Corporation may, at its
option, make a cash payment equal to the number of shares of Common Stock to be
converted multiplied by the Change of Control Price.
(iv) A holder's rights of conversion shall be exercised by the holder
thereof by giving written notice that the holder elects to convert a stated
number of shares of Series K Preferred Stock into Common Stock. Such written
notice may be given by telecopying a written and executed notice of conversion
to the Corporation at its main telecopier number at its principal office and
delivering within five (5) business days thereafter, to the Corporation at its
principal office (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holders of the Series K
Preferred Stock), together with a copy to the Corporation's transfer agent, the
original notice of conversion by express courier, together with a certificate or
certificates for the shares to be so converted, duly endorsed to the Corporation
or in blank, and with a statement of the name or names (with address) in which
the certificate or certificates for shares of Common Stock shall be issued;
provided, however, that the Corporation shall not be obligated to issue
certificates for shares of Common Stock in any name other than the name or names
set forth on the certificates for the shares of Series K Preferred Stock being
converted unless all requirements for transfer of Series K Preferred Stock have
been complied with. Conversion shall be effective upon receipt by the
Corporation and the transfer agent of the telecopied notice (provided that the
original notice and the share certificate or certificates are sent to the
Corporation and the transfer agent as contemplated above).
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(v) In the case of automatic conversion, the outstanding shares of
Series K Preferred Stock shall be converted into Common Stock automatically
without any further action by the holders of such shares or by the Corporation
and whether or not the certificates representing such shares are surrendered to
the Corporation or its transfer agent.
(vi) In case of any liquidation of the Corporation, all rights of
conversion shall cease and terminate at the close of business on the business
day preceding the date fixed for payment of the amount to be distributed to the
holders of the Series K Preferred Stock pursuant to paragraph 4.
(vii) The number of shares into which the Series K Preferred Stock is
convertible will be determined without giving effect to any Accruing Dividends
on the Series K Preferred Stock. No consideration will be payable in respect of
any Accrued Dividends that may exist with respect to any Series K Preferred
Stock that the holder elects to convert into Common Stock and the exercise by a
holder of Series K Preferred Stock into Common Stock shall constitute a waiver
in all respects of any and all rights that the holder may have to such Accruing
Dividends, except for Accruing Dividends which accrue through December 31, 2000,
which shall be payable in full upon conversion, as provided in the last sentence
of paragraph 3(a).
5(b). Issuance of Certificates; Time Conversion Effected. (i) Promptly
after the receipt of the written notice referred to in subparagraph 5(a)(iv), or
upon automatic conversion as referred to in subparagraph 5(a)(vi), as
applicable, and surrender of the certificate or certificates for the share or
shares of Series K Preferred Stock to be converted, the Corporation shall issue
and deliver or cause to be issued and delivered, to such holder of Series K
Preferred Stock or to such holder's nominee or nominees, registered in such name
or names as such holder may direct, a certificate or certificates for the number
of shares of Common Stock, including, subject to subparagraph 5(c) below,
fractional shares, as necessary, issuable upon the conversion of such share or
shares of Series K Preferred Stock. Upon the effectiveness of conversion the
rights of the holder of such share or shares of Series K Preferred Stock being
converted shall cease, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby.
(ii) The Corporation shall not be obligated to issue certificates
evidencing the shares of Common Stock issuable upon such conversion unless the
certificates evidencing such shares of Series K Preferred Stock are either
delivered to the Corporation or its transfer agent as provided below, or the
holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. Upon surrender by any holder of the
certificates formerly representing shares of Series K Preferred Stock at the
office of the Corporation or any transfer agent for the Series K Preferred
Stock, there shall be issued and delivered to such holder promptly at such
office and in its name as shown on such surrendered certificate or certificates,
a certificate or certificates for the number of shares of Common Stock into
which the shares of Series K Preferred Stock surrendered were convertible on the
date on which such automatic conversion occurred. Until surrendered as provided
above, each certificate formerly representing shares of Series K Preferred Stock
shall be deemed for all
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corporate purposes to represent the number of shares of Common Stock resulting
from such automatic conversion.
5(c). Fractional Shares; Partial Conversion. In the event that the
computation pursuant to subparagraph 5(a) of the number of shares of Common
Stock issuable upon conversion of shares of Series K Preferred Stock results in
any fractional share of Common Stock, the Corporation may, at its option, issue
fractional shares or scrip representing fractional shares of Common Stock or pay
in cash the value of such fractional shares of Common Stock upon such
conversion, which for this purpose shall be deemed to equal the last reported
sales price of the Common Stock prior to the First Conversion Date. In case the
number of shares of Series K Preferred Stock represented by the certificate or
certificates surrendered pursuant to subparagraph 5(a) exceeds the number of
shares converted, the Corporation shall, upon such conversion, issue and deliver
to the holder of the Certificate or Certificates so surrendered, at the expense
of the Corporation, a new certificate or certificates for the number of shares
of Series K Preferred Stock represented by the certificate or certificates
surrendered which are not to be converted, and which new certificate or
certificates shall entitle the holder thereof to the rights of the shares of
Series K Preferred Stock represented thereby to the same extent as if the
Certificate theretofore covering such unconverted shares had not been
surrendered for conversion.
5(d). Adjustment of Price Upon Issuance of Common Stock. Except as
provided in subparagraph 5(m) below or in the case of any Permitted Issuance, if
and whenever the Corporation shall issue or sell, or is, in accordance with
subparagraphs 5(d)(1) through 5(d)(4), deemed to have issued or sold, any shares
of Common Stock for a consideration per share less than the Conversion Price,
forthwith upon such issue or sale, the Conversion Price shall be reduced to the
price determined by multiplying the Conversion Price by a fraction (i) the
numerator of which shall be equal to the sum of (A) the number of shares of
Common Stock outstanding (on a fully diluted basis as provided in subparagraph
5(d)(5) below) immediately prior to such issue or sale and (B) the number of
shares of Common Stock that the consideration, if any, received by the
Corporation upon such issuance or sale would have purchased at the Conversion
Price divided by the Conversion Price and (ii) the denominator of which shall be
equal to the total number of shares of Common Stock outstanding (on a fully
diluted basis as provided in subparagraph 5(d)(5)) immediately after such issue
or sale.
For purposes hereof, "Permitted Issuances" means the issue or sale of
(i) shares of Common Stock by the Corporation pursuant to the exercise or
conversion, as the case may be, of Convertible Securities outstanding, or
issuable under a binding contract existing, immediately prior to the first
issuance date of the Series K Preferred Stock (as adjusted pursuant to the terms
of such securities to give effect to stock dividends or stock splits or a
combination of shares in connection with a recapitalization, merger,
consolidation or other reorganization occurring after the first issuance date of
the Series K Preferred Stock), and (ii) options to acquire Common Stock by the
Corporation pursuant to a resolution of, or a stock option plan approved by a
resolution of, the Board of Directors of the Corporation (or the compensation
committee thereof) to the Corporation's employees or directors.
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For purposes of this subparagraph 5(d), the following subparagraphs
5(d)(1) to 5(d)(5) shall also be applicable:
5(d)(1). Issuance of Rights or Options. Except in the event of any
Permitted Issuance, in case at any time the Corporation shall in any manner
grant or sell (whether directly or by assumption in a merger or otherwise) any
warrants or other rights to subscribe for or to purchase, or any options for the
purchase of, Common Stock or any stock or security convertible into or
exchangeable (with or without further consideration) for Common Stock (such
warrants, rights or options being called "Options" and such convertible or
exchangeable stock or securities being called "Convertible Securities"), whether
or not such Options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such Options or upon the conversion or
exchange of such Convertible Securities (determined by dividing (i) the total
amount, if any, received or receivable by the Corporation as consideration for
the granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable upon the
issue or sale by the Corporation of all such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of all such Options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such Options) shall be less than the Conversion Price, then the
total maximum number of shares of Common Stock issuable upon the exercise of all
such Options or upon conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have been issued
for such price per share as of the date of granting of such Options and
thereafter shall be deemed to be outstanding when computing the Conversion
Price. Except as otherwise provided in subparagraph 5(d)(3), no adjustment of
the Conversion Price shall be made upon the actual issue of Common Stock or
Convertible Securities upon exercise of such Options or upon the actual issue of
Common Stock upon conversion or exchange of such Convertible Securities.
5(d)(2). Issuance of Convertible Securities. Except in the event of any
Permitted Issuance, in case at any time the Corporation shall in any manner
issue (whether directly or upon assumption in a merger or otherwise) or sell any
Convertible Securities, whether or not the rights to exchange or convert any
such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon such conversion or exchange (determined
by dividing (i) the total amount received or receivable by the Corporation as
consideration for the issue or sale of all such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Corporation upon the conversion or exchange thereof, by (ii) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Conversion Price, then the
total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to have been issued
for such price per share as of the date of the issue or sale of such Convertible
Securities and thereafter shall be deemed to be outstanding when computing the
Conversion Price; provided, that (A) except as otherwise provided in
subparagraph 5(d)(3), no adjustment of the Conversion Price shall be made
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upon the actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities and (B) if any such issue or sale of such Convertible
Securities is made upon exercise of any Options to purchase any such Convertible
Securities for which adjustments of the Conversion Price have been or are to be
made pursuant to other provisions of this subparagraph 5(d), no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale.
5(d)(3). Change in Option Price or Conversion Rate. If (i) the exercise
price provided for in any Option referred to in subparagraph 5(d)(1), (ii) the
additional consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subparagraph 5(d)(1) or 5(d)(2), (iii) the
additional consideration, if any, payable upon the issuance of any Convertible
Securities issuable upon the exercise of any Options referred to in subparagraph
5(d)(1), (iv) the number of shares of Common Stock issuable upon the exercise of
Options referred to in subparagraph 5(d)(1), or (v) the rate at which
Convertible Securities referred to in subparagraph 5(d)(1) or 5(d)(2) are
convertible into or exchangeable for Common Stock, shall change at any time
(including, but not limited to, changes under or by reason of provisions
designed to protect against dilution), then upon the happening of such event the
Conversion Price shall forthwith be readjusted to the Conversion Price which
would have been in effect had such Options or Convertible Securities still
outstanding provided for such changed purchase price, additional consideration,
number of shares or conversion rate, as the case may be, at the time initially
granted, issued or sold. Upon the expiration of any Option referred to in
subparagraph 5(d)(1) or the expiration or termination of any right to convert or
exchange Convertible Securities referred to in subparagraphs 5(d)(1) or (2), the
Conversion Price then in effect hereunder shall forthwith be increased to the
Conversion Price which would have been in effect at the time of such expiration
or termination had such Option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination, never been
issued;
5(d)(4). Consideration for Stock. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the amount received by the
Corporation therefor, without deduction therefrom of any amounts paid or
receivable for accrued interest or accrued dividends and any expenses incurred
or any underwriting commissions or concessions paid or allowed by the
Corporation in connection therewith. In case any shares of Common Stock, Options
or Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the
Corporation shall be deemed to be the fair value of such consideration at the
time of such issuance or sale as determined in good faith by the Board of
Directors of the Corporation, without deduction of any amounts paid or
receivable for accrued interest or accrued dividends and any expenses incurred
or any underwriting commissions or concessions therewith. In case any Options
shall be issued in connection with the issue and sale of other securities of the
Corporation, together comprising one integral transaction in which no specific
consideration is allocated to such Options by the parties thereto, such Options
shall be deemed to have been issued for such consideration as determined in good
faith by the Board of Directors of the Corporation. If the Board of Directors of
the Corporation shall not make any determination, the consideration for the
options shall be deemed to be zero.
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5(d)(5). Treasury Shares: Full Dilution. The number of shares of Common
Stock outstanding at any given time shall not include shares owned or held by or
for the account of the Corporation, and the disposition of any such shares shall
be considered an issue or sale of Common Stock for the purpose of this
subparagraph 5(d). The number of shares outstanding at any given time shall
include, in addition to shares of Common Stock then issued and outstanding, all
shares of Common Stock issuable upon the exercise of all Options or Convertible
Securities outstanding.
5(e). Subdivision or Combination of Common Stock or Series K Preferred
Stock. In case the Corporation shall at any time subdivide (by any stock split,
stock dividend or otherwise) its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price shall be proportionately reduced,
and, conversely, in case the outstanding shares of Common Stock shall be
combined into a smaller number of shares, the Conversion Price shall be
proportionately increased. Any dividend or other distribution made upon any
capital stock of the Corporation payable in Common Stock or in any security
convertible into or exercisable for Common Stock (other than the Series K
Preferred Stock) without or for de minimus consideration shall be deemed to be a
subdivision for purposes of this subparagraph 5(e). In the event of a
subdivision or combination of the Series K Preferred Stock, the Liquidation
Amount (and the public offering price referred to in paragraph 5(a)) shall be
proportionately reduced or increased, as the case may be.
5(f). Reorganization. Reclassification. Merger or Distribution. If any
of the following shall occur: (i) any distribution on the capital stock of the
Corporation or capital reorganization or reclassification of such capital stock
which is effected in such a way that holders of Common Stock shall be entitled
to receive stock, securities, evidence of indebtedness or other assets (other
than cash dividends out of current or retained earnings) with respect to or in
exchange for Common Stock, (ii) any consolidation or merger to which the
Corporation is a party other than a merger in which the Corporation is the
continuing corporation and which does not result in any reclassification of, or
change (other than a change in name, or par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination) in, the outstanding shares of Common Stock, or (iii) any sale or
conveyance of all or substantially all of the property or business of the
Corporation as an entirety, then, as a condition of such distribution,
reorganization, classification, consolidation, merger, sale or conveyance,
lawful and adequate provisions shall be made whereby each holder of a share or
shares of Series K Preferred Stock shall thereupon have the right to receive,
upon the basis and upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately theretofore receivable upon the
conversion of such share or shares of Series K Preferred Stock, such shares of
stock, securities, evidence of indebtedness or assets as may be issued or
payable in such transaction with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore receivable upon such conversion had such
distribution, reorganization, reclassification, consolidation, merger, sale or
conveyance not already taken place, and in such case appropriate provisions
shall be made with respect to the right and interests of such holder to the end
that the provisions hereof (including without limitation provisions for
adjustment of the Conversion Price) shall thereafter be applicable, as nearly as
may be, in relation to any shares of stock, securities, evidence of
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indebtedness or assets thereafter deliverable upon the exercise of such
conversion rights. Anything herein to the contrary notwithstanding, if the
provisions of this subparagraph 5(f) shall be deemed to apply to any
distribution, reorganization, reclassification, consolidation, merger, sale or
conveyance in respect of the Corporation or its capital stock, no duplicative
adjustments shall be made to the Conversion Price pursuant to subparagraph 5(d)
or 5(e) upon the occurrence of such distribution, reorganization,
reclassification, consolidation, merger, sale or conveyance.
5(g). Notice of Adjustment. Upon any adjustment of the Conversion
Price, then and in each such case the Corporation shall give written notice
thereof, (i) by certified or registered mail, postage prepaid, (ii) by a
nationally known overnight delivery service or (iii) delivered by hand,
addressed to each holder of shares of Series K Preferred Stock at the address of
such holder as shown on the books of the Corporation, which notice shall state
the Conversion Price resulting from such adjustment, setting forth in reasonable
detail the method upon which such calculation is based.
5(h). Other Notices. In case at any time:
(i) the Corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the holders of
its Common Stock;
(ii) the Corporation shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any class or
other rights;
(iii) there shall be any distribution (other than a cash
dividend) on the capital stock of the Corporation or capital reorganization or
reclassification of the capital stock of the Corporation, or a consolidation or
merger of the Corporation with or into, or a sale of all or substantially all
its assets to, another entity or entities; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give (A) by
certified or registered mail, return receipt requested, postage prepaid, (B) by
a nationally known overnight delivery service or (C) delivered by hand,
addressed to each holder of any shares of Series K Preferred Stock at the
address of such holder as shown on the books of the Corporation at least 30
days' prior written notice of the date on which the books of the Corporation
shall close or a record shall be taken for such dividend, distribution or
subscription rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up and the date when the same shall take place. Such
notice in accordance with the foregoing sentence shall also specify, in the case
of any such dividend, distribution or subscription rights, the date on which the
holders of Common Stock shall be entitled thereto and the date on which the
holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.
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<PAGE>
5(i). Stock to be Reserved. The Corporation shall at all times reserve
and keep available out of its authorized but unissued Common Stock, solely for
the purpose of issuance upon the conversion of Series K Preferred Stock as
herein provided, including any dividends that accrue on the Series K Preferred
Stock, as specified in paragraph 3 above, such number of shares of Common Stock
as shall then be issuable upon the conversion of all outstanding shares of
Series K Preferred Stock. The Corporation covenants that all shares of Common
Stock which shall be so issued shall be duly and validly issued and fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issue thereof, and, without limiting the generality of the foregoing, the
Corporation covenants that it will from time to time take all such action as may
be required to assure that the par value per share of the Common Stock is at all
times equal to or less than the lowest Conversion Price in effect at the time.
The Corporation will take all such action as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any applicable
law or regulation, or of any requirement of any national securities exchange
upon which the Common Stock may be listed. The Corporation will not take any
action which results in any adjustment of the Conversion Price if the total
number of shares of Common Stock issued and issuable after such action upon
conversion of the Series K Preferred Stock would exceed the total number of
shares of Common Stock then authorized by the Certificate of Incorporation.
5(j). Reissuance of Preferred Stock. Shares of Series K Preferred Stock
which are converted into shares of Common Stock as provided herein shall resume
the status of authorized and unissued shares of Preferred Stock without
designation as to series or class until shares are once more designated as part
of a particular series or class by the Board of Directors of the Corporation.
5(k). Issue Tax. The issuance of certificates for shares of Common
Stock upon conversion of Series K Preferred Stock shall be made without charge
to the holders thereof for any issuance tax in respect thereof; provided. that
the Corporation shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the holder of the Series K Preferred Stock which is
being converted.
5(l). Closing of Books. The Corporation will at no time close its
transfer books against the transfer of any Series K Preferred Stock or of any
shares of Common Stock issued or issuable upon the conversion of any shares of
Series K Preferred Stock in any manner which interferes with the timely
conversion of such Series K Preferred Stock, except as may otherwise be required
to comply with applicable securities laws.
5(m). Limitations on Adjustments. Anything herein to the contrary
notwithstanding, no adjustment in the Conversion Price shall be required unless
such adjustment, either by itself or with other adjustments not previously made,
would require a change of at least $0.01 (one cent) in such Conversion Price;
provided, that any adjustment which by reason of this subparagraph 5(m) is not
required to be made shall be carried forward and taken into account in any
subsequent
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<PAGE>
adjustment. All calculations of shares of Common Stock or Series K Preferred
Stock under this paragraph 5 shall be rounded to the nearest three decimal
points.
6. Certain Approvals. The Corporation acknowledges that as a
prerequisite to the conversion of Series K Preferred Stock as contemplated
hereby it may be necessary for a holder of Series K Preferred Stock to comply
with the filing and notice requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the filing fee for which shall be paid by
the Corporation; provided, that all reasonable efforts shall be made by the
holders of Series K Preferred Stock to require only one such filing), the
requirements of any exchange or market on which the Common Stock may be listed
(including, without limitation, the requirement of shareholder approval prior to
the issuance of Common Stock upon conversion) or other laws, rules or
regulations applicable to such conversion. The Corporation will, at its expense,
fully cooperate with the holders of Series K Preferred Stock and use its best
efforts to cause any such prerequisite to be met. In the event such prerequisite
has not been met on the applicable conversion date, then such date shall, as to
such holder of Series K Preferred Stock, be extended until such prerequisite is
met, and during such time Accruing Dividends shall continue to accrue as
contemplated by paragraph 3 above and such shares of Series K Preferred Stock
shall remain outstanding and be entitled to all rights and preferences provided
herein.
7. Information Rights. Each holder of Series K Preferred Stock will be
entitled to copies of all material provided to holders of Common Stock and
copies of all filings made with the Securities and Exchange Commission pursuant
to rules and regulations thereof upon request by such holder.
8. Definitions.
"Affiliate" of a Person shall mean someone that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person.
"Board of Directors" shall mean the Board of Directors of the
Corporation or the Executive Committee of the Board of Directors in
circumstances in which the Committee is empowered to act on behalf of the Board.
"Change of Control" shall mean the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Corporation to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group"), together with any
Affiliates thereof; (ii) the approval by the holders of the capital stock of the
Corporation of any plan or proposal for the liquidation or dissolution of the
Corporation; (iii) any Person or Group shall become the owner, directly or
indirectly, beneficially or of record, of shares representing more than 50.0% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Corporation; or (iv) the replacement of a majority of the
Board of Directors of the Corporation over a two-year period, and such
replacement shall not have been approved by a vote of at least a majority of the
Board of Directors of the Corporation then still in office who either were
members of such Board of Directors at the beginning of such period or
-12-
<PAGE>
whose election as a member of such Board of Directors at the beginning of such
period or whose election as a member of such Board of Directors was previously
so approved.
"Common Stock" shall mean the common stock, $.001 par value, of the
Corporation.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Issue Date" shall mean the date of original issuance of any share of
Series K Preferred Stock.
"Junior Stock" shall mean any class or series of capital stock
(including Common Stock) of the Corporation (other than the series of Preferred
Stock authorized as of the date hereof) which may be issued which, at the time
of issuance, is not declared to be on a parity with or senior to the Series K
Preferred Stock as to dividends and rights upon liquidation (or in the case of
Preferred Stock issued after the date hereof which has not received the consent
required by paragraph 2(a) hereto).
"Nasdaq" shall mean the Nasdaq Stock Market.
"Parity Stock" shall mean any class or series of Preferred Stock of the
Corporation which, at the time of issuance, is declared to be on a parity with
the Series K Preferred Stock as to dividends and rights upon liquidation and (in
the case of Preferred Stock issued after the date hereof) which has received the
consent required by paragraph 2(a) hereto.
"Person" shall mean an individual, corporation, trust partnership,
limited liability company, joint venture, unincorporated organization,
government agency or any agency or political subdivision thereof, or other
entity.
"Preferred Stock" shall mean any class or series of preferred stock of
the Corporation.
"Senior Stock" shall mean any class or series of Preferred Stock of the
Corporation (including the series of Preferred Stock authorized as of the date
hereof) which, at the time of issuance, is declared to be senior to the Series K
Preferred Stock as to dividends and rights upon liquidation and (in the case of
Preferred Stock issued after the date hereof) which has received the consent
required by paragraph 2(a) hereto.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto signed his name and
affirms that the statements made herein are true under the penalties of perjury
this 2d day of September, 1999.
------------------------------------------
Christopher J. Vizas
Chairman of the Board and President
ATTEST:
- -----------------------------------
Graeme S.R. Brown
Assistant Secretary
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EXHIBIT 99.6
NASDAQ [Symbol] AMEX (Letterhead)
KATHERINE M. ROBERSON
Counsel
SENT VIA FACSIMILE AND FEDERAL EXPRESS
August 20, 1999
Steven M. Kaufman, Esq.
Hogan & Hartson, LLP
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
RE: eGLOBE, INC.
(F/K/A EXECUTIVE TELECARD, LTD.)
NASDAQ LISTING QUALIFICATIONS PANEL
RECONSIDERATION OF DECISION NQ 2826C-99
Dear Mr. Kaufman:
This is to inform you that the Nasdaq Listing Qualifications Panel (the "Panel")
has rendered a determination in the matter of eGlobe, Inc. (the "Company") with
respect to the Company's request for reconsideration of the decision, dated
August 17, 1999, whereby the Company's securities were delisted from the Nasdaq
National Market effective with the close of business on that date. In its
original decision dated August 10, 1999, the Panel granted the Company an
exception, pursuant to which the Company was required to evidence a minimum of
$9,900,000 in net tangible assets on or before August 16, 1999.(1) Thereafter,
on or before October 15, 1999, the Company was required to evidence a minimum of
$20,000,000 in net tangible assets.
The Company filed the Form 10-Q for the quarter ended June 30, 1999 on August
16, 1999 evidencing a net worth of approximately $10,500,000; however, that
figure included approximately $3,000,000 in redeemable preferred stock. The
Panel determined to treat the redeemable preferred stock as a liability for
purposes of calculating the Company's net tangible
- ---------------------
1 The Panel's August 10, 1999 decision is hereby incorporated by reference.
<PAGE>
assets;(2) Pursuant to such determination, the Company's securities were
delisted from The Nasdaq Stock Market effective with the close of business,
August 17, 1999.(3)
In correspondence dated August 18, 1999, the Company asserted that the Series G
Convertible Redeemable Preferred Stock (the "Series G") should be included in
the calculation of its net tangible assets and that it had evidenced compliance
with the first term of the Panel's decision. It requested that its securities be
relisted on the Nasdaq National Market. In the alternative, the Company
proffered a revised plan, which it believes will enable it to evidence
approximately $15,400,000 in net tangible assets within the very near term.
The Company represented that it has received firm commitments from several of
its "prominent" investors to purchase additional securities in the total amount
of $1,000,000. In addition, the Company's largest shareholder and creditor has
agreed to convert $4,000,000 of debt into equity. Finally, as of the morning of
August 20, 1999, the Company had received oral confirmation that the holder of
the Series G has agreed to convert those shares into common shares resulting in
$3,000,000 in additional equity. The Company continues to pursue its plan to
raise an additional $10,000,000 in the near term to enable it to evidence
compliance with the second term of the Panel's decision as well.
PANEL DECISION
The Panel was of the opinion that the Company presented a definitive plan which
will enable it to evidence net tangible assets in excess of the original
$9,900,000 requirement within the very near term. The Panel particularly noted
the immediate actions taken by the Company upon notification that the Series G
would be considered a liability for purposes of calculating its net tangible
assets. The Panel again expressed confidence in the Company's ability to sustain
compliance with the net tangible assets requirement going forward, even in light
of its projected losses, so long as it is able to timely comply with the second
term of the August 10, 1999 decision.
BASED UPON THE COMPANY'S UPDATED AND REVISED PLAN OF COMPLIANCE AND THE SHORT
DURATION OF THE EXTENSION, THE PANEL DETERMINED TO RELIST THE COMPANY'S
SECURITIES ON THE NASDAQ NATIONAL MARKET EFFECTIVE WITH THE OPEN OF BUSINESS ON
AUGUST 23, 1999, PURSUANT TO THE FOLLOWING EXCEPTION. ON OR BEFORE SEPTEMBER 3,
1999, THE COMPANY MUST MAKE A PUBLIC
- ---------------------
2 The Company was advised by staff of Nasdaq's policy regarding the treatment of
redeemable preferred stock with respect to the calculation of net tangible
assets prior to and at the hearing.
3 At the hearing, the Company estimated a net loss of approximately $4,500,000
for the June 30, 1999 quarter, however, the Company reported an operating loss
of $(8,058,894) and a net loss of $(11,247,821) in the Form 10-Q for that
period. In accordance with the information discussed in the Panel's original
decision, the Company projects continued losses through the month ending April
30, 2000.
<PAGE>
FILING WITH THE SECURITIES AND EXCHANGE COMMISSION AND NASDAQ, EVIDENCING A
MINIMUM OF $9,900,000 IN NET TANGIBLE ASSETS. THE FILING MUST CONTAIN A JULY 31,
1999 BALANCE SHEET WITH PRO FORMA ADJUSTMENTS FOR ANY SIGNIFICANT EVENTS OR
TRANSACTIONS OCCURRING ON OR BEFORE THE FILING DATE. THEREAFTER, ON OR BEFORE
OCTOBER 15, 1999, THE COMPANY MUST MAKE A PUBLIC FILING WITH THE SECURITIES AND
EXCHANGE COMMISSION AND NASDAQ, EVIDENCING A MINIMUM OF $20,000,000 IN NET
TANGIBLE ASSETS. THE FILING MUST CONTAIN AN AUGUST 31, 1999 BALANCE SHEET WITH
PRO FORMA ADJUSTMENTS FOR ANY SIGNIFICANT EVENTS OR TRANSACTIONS OCCURRING ON OR
BEFORE THE FILING DATE. IN ORDER TO FULLY COMPLY WITH THE TERMS OF THIS
EXCEPTION, THE COMPANY MUST BE ABLE TO DEMONSTRATE COMPLIANCE WITH ALL
REQUIREMENTS FOR CONTINUED LISTING ON THE NASDAQ NATIONAL MARKET, INCLUDING
NASDAQ'S SHAREHOLDER APPROVAL REQUIREMENT AS SET FORTH IN NASDAQ MARKETPLACE
RULE 4460(I). IN THE EVENT THE COMPANY FAILS TO COMPLY WITH THE TERMS OF THIS
EXCEPTION, THE COMPANY'S SECURITIES MAY BE TRANSFERRED TO THE NASDAQ SMALLCAP
MARKET OR DELISTED FROM THE NASDAQ STOCK MARKET.
It is a requirement during the exception period that the Company must provide
prompt notification of any significant events which occur during this time.
Should there be a material change in the Company's financial or operational
character the Panel reserves the right to reconsider the terms of this
exception. In addition, any compliance document will be subject to review by the
Panel, which may at its discretion request additional information before
approving the Company's compliance.
The Company should be aware that the Nasdaq Listing and Hearing Review Council
("Review Council") may, on its own motion, determine to review any Panel
decision within 45 calendar days after issuance of the written decision. If the
Review Council determines to review this decision it may affirm, modify,
reverse, dismiss, or remand the decision to a Panel. The Company will be
immediately notified in the event the Review Council determines that this matter
will be called for review.
All other terms and conditions of the Panel's August 10, 1999 decision shall
remain in effect.
<PAGE>
If you have any questions, please do not hesitate to contact me at (202)
496-2656.
Sincerely,
/s/ Katherine M. Roberson
Katherine M. Roberson
Counsel
Nasdaq Listing Qualifications Hearings
cc: W.P. Colin Smith, Jr., General Counsel, eGlobe, Inc.
EXHIBIT 99.7
FRIDAY AUGUST 20, 7:25 PM EASTERN TIME
COMPANY PRESS RELEASE
SOURCE: eGlobe, Inc.
eGLOBE STOCK TO RESUME TRADING ON NASDAQ NATIONAL MARKET
WASHINGTON, Aug. 20 /PRNewswire/ -- eGlobe, Inc. (Nasdaq: EGLO) today announced
that its common stock will resume trading on the Nasdaq National Market
effective at the opening of trading on Monday, August 23, 1999. The Company
received word of the development in a letter from Nasdaq, today, August 20,
1999. Trading in eGlobe's stock had been moved from the Nasdaq National Market
to the OTC Bulletin Board on Wednesday, August 18, 1999. The movement back to
the Nasdaq National Market resulted from eGlobe's request for reconsideration of
Nasdaq's original decision to delist the Company's stock from the Nasdaq
National Market.
In reconsidering its initial decision, Nasdaq placed conditions on the continued
National Market listing of eGlobe's stock. The Company believes that it can meet
Nasdaq's conditions. The conditions principally include satisfying benchmarks
relating to the amount of the Company's net tangible assets, as defined by
Nasdaq. Key among the requirements, eGlobe needs to file a form 8K with the SEC
by September 3, 1999, which includes a balance sheet with $9.9 million of net
tangible assets. The Company needs to make a further filing in October, which
includes a balance sheet with $20.0 million of net tangible assets.
To assure that it meets the net tangible asset requirements, the Company took a
series of steps in the last three days. The Company reached agreement to convert
the redeemable preferred stock categorized by Nasdaq as a liability into a
convertible preferred stock of the Company, which will result in an increase in
net tangible assets of more than $3 million. The Company also reached agreement
to convert $4 million of debt into common stock, resulting in an additional $4
million in net tangible assets. Finally, the Company received commitments from
warrant holders for the exercise of approximately $1 million in existing
warrants, adding $1 million in cash to the net tangible assets of the Company.
eGlobe is a leading supplier of global enhanced telecommunications and
information services, including Internet voice and fax, calling card services
along with related validation, billing and payment systems, and other
international Intranet and inter-networking services in partnership with
telecommunications operators around the world. Operating through its World
Direct network, eGlobe originates traffic in 90 territories and countries and
terminates anywhere in the world. eGlobe provides its services principally to
telecommunications companies and financial institutions.
Certain statements in this news release are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 and involve
known and unknown risks,
<PAGE>
uncertainties and other factors that may cause the Company's actual results,
performance or achievements to be materially different from the results,
performance or achievements expressed or implied by the forward looking
statement. Factors that impact such forward looking statements include, among
others, the ability of the Company to attract additional business, the ability
of the Company to successfully integrate the IDX acquisition and unified
messaging technology, complete software development and offer new products,
changes in expectations regarding restructurings, including tax liabilities and
reductions in cost, possible changes in collections of accounts receivable,
risks of competition, price and margin trends, changes in worldwide general
economic conditions, changes in interest rates, currency rates and worldwide
competition.
SOURCE: eGlobe, Inc.
