SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 9, 2000
TALK.COM INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<CAPTION>
DELAWARE 000-26728 23-2827736
<S> <C> <C>
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
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TALK.COM INC.
12020 SUNRISE VALLEY DRIVE
RESTON, VIRGINIA 22091
(Address of Principal Executive Offices, Including Zip Code)
(703) 391-7500
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On August 9, 2000, pursuant to an Agreement and Plan of Merger dated as
of March 24, 2000, as amended (the "Merger Agreement"), Aladdin Acquisition
Corp. ("Merger Sub"), a Delaware corporation and wholly-owned subsidiary of
Talk.com Inc. ("Talk.com"), merged with and into Access One Communications Corp.
("Access One"), a New Jersey corporation (the "Merger"). Under the terms of the
Merger Agreement, Access One stockholders will receive 0.571428 shares of
Talk.com's common stock in exchange for each share of Access One common stock
outstanding at the effective time of the Merger. As a result of the consummation
of the Merger, Access One continued as the surviving corporation and has become
a wholly-owned subsidiary of Talk.com. Based upon the 19,242,102 shares of
Access One common stock outstanding as of the closing date, and 2,057,889 shares
of Access One common stock issuable under certain outstanding warrants that will
be converted directly into Talk.com common stock based on the same conversion
ratio, Talk.com expects to issue approximately 12,171,411 shares of Talk.com
common stock in connection with the Merger. In addition, outstanding options and
warrants to purchase an aggregate of approximately 3.7 million shares of Access
One common stock will be exchanged for equivalent Talk.com options and warrants
to purchase an aggregate of approximately 2.1 million shares of Talk.com common
stock.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Businesses Acquired.
The audited financial statements of the business acquired, Access One
Communications Corp., required by this item, including (i) the audited
consolidated balance sheets of Access One and subsidiaries as of
October 31, 1999 and 1998, and the related audited consolidated
statements of operations, stockholders' equity (deficiency) and cash
flows for the years ended October 31, 1999, 1998 and 1997, together
with the notes thereto, (ii) the unaudited consolidated balance sheet
of Access One and subsidiaries as of April 30, 2000, and the related
unaudited consolidated statements of operations, stockholders' equity
(deficiency) and cash flows for the three month and six month periods
ended April 30, 2000 and 1999, together with the notes thereto, (iii)
the audited balance sheets of OmniCall, Inc. as of December 31, 1998
and 1997 and the audited statements of operations, stockholders' equity
(deficit) and cash flows of OmniCall, Inc. for the years then ended,
together with the notes thereto, and (iv) the unaudited statements of
operations and cash flows of OmniCall, Inc. for the period from January
1, 1999 through November 29, 1999, together with the notes thereto, are
incorporated herein by reference to Talk.com's Registration Statement
on Form S-4 (No. 333-40980), filed with the Securities and Exchange
Commission on July 7, 2000 (the "Registration Statement").
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(b) Pro Forma Financial Information.
The pro forma financial information required by this item is contained
in the pro forma financial statements set forth in the Registration
Statement, and is hereby incorporated by reference.
(c) Exhibits.
The following exhibits are filed with this Report.
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger by and among Talk.com Inc.,
Aladdin Acquisition Corp. and Access One Communications
Corp., dated as of March 24, 2000, and Amendment thereto
(incorporated by reference to Annex A to the Joint Proxy
Statement/Prospectus forming a part of the Registration
Statement).
2.2 Voting Agreement, dated as of March 24, 2000, by and among
Talk.com Inc., Aladdin Acquisition Corp., Access One
Communications Corp. and the other signatories identified on
the signature pages thereto (incorporated by reference to
Annex B to the Joint Proxy Statement/Prospectus forming a
part of the Registration Statement).
2.3 Indemnification Agreement, dated March 24, 2000, by and
among Talk.com Inc. and Access One Communications Corp.
(incorporated by reference to Annex C to the Joint Proxy
Statement/Prospectus forming a part of the Registration
Statement).
2.4 Escrow Agreement, dated as of August 9, 2000, among Talk.com
Inc., Aladdin Acquisition Corp., Access One Communications
Corp., Kenneth G. Baritz and Wilmington Trust Company, as
Escrow Agent. (filed herewith)
99.1 Press Release of Talk.com Inc., dated August 9, 2000. (filed
herewith)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
TALK.COM INC.
Date: August 10, 2000 By: /s/ Aloysius T. Lawn, IV
-----------------------------
Name: Aloysius T. Lawn, IV
Title: Executive Vice President -
General Counsel and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger by and among Talk.com Inc.,
Aladdin Acquisition Corp. and Access One Communications
Corp., dated as of March 24, 2000, and Amendment thereto
(incorporated by reference to Annex A to the Joint Proxy
Statement/Prospectus forming a part of the Registration
Statement).
2.2 Voting Agreement, dated as of March 24, 2000, by and among
Talk.com Inc., Aladdin Acquisition Corp., Access One
Communications Corp. and the other signatories identified on
the signature pages thereto (incorporated by reference to
Annex B to the Joint Proxy Statement/Prospectus forming a
part of the Registration Statement).
2.3
Indemnification Agreement, dated March 24, 2000, by and
among Talk.com Inc. and Access One Communications Corp.
(incorporated by reference to Annex C to the Joint Proxy
Statement/Prospectus forming a part of the Registration
Statement).
2.4 Escrow Agreement, dated as of August 9, 2000, among Talk.com
Inc., Aladdin Acquisition Corp., Access One Communications
Corp., Kenneth G. Baritz and Wilmington Trust Company, as
Escrow Agent. (filed herewith)
99.1 Press Release of Talk.com Inc., dated August 9, 2000 (filed
herewith)
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EXHIBIT 2.4
Execution Copy
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") is dated effective
August 9, 2000, by and among TALK.COM, INC., a Delaware corporation ("Parent"),
ALADDIN ACQUISITION CORP., a Delaware corporation and a wholly-owned subsidiary
of Parent ("Parent Subsidiary"), ACCESS ONE COMMUNICATIONS CORP., a New Jersey
corporation (the "Target"), KENNETH G. BARITZ (the "Representative"), and
Wilmington Trust Company, a Delaware banking corporation, as Escrow Agent (the
"Escrow Agent").
W I T N E S S E T H:
WHEREAS, Parent, Parent Subsidiary and Target entered into an
Agreement and Plan of Merger dated March 24, 2000 (the "Merger Agreement"),
pursuant to which Parent agreed to acquire all of the outstanding shares of
voting common stock, $0.001 par value per share (the "Common Stock"), of the
Target pursuant to a merger of Parent Subsidiary with and into Target (the
"Merger");
WHEREAS, at and as of the effective time of the Merger each
holder of Common Stock, including holders of warrants convertible into Common
Stock, will be converted into the right to receive a certain number of Parent's
common stock, par value $0.01 per share (the "Parent Shares")
WHEREAS, certain indemnification obligations exist under the
Merger Agreement and the Indemnification Agreement (as defined in the Merger
Agreement) and these indemnification obligations are secured by the pledge of
the amount of Parent Shares as provided in the Merger Agreement (constituting
10% of the Merger Consideration) and identified on Exhibit A attached hereto and
incorporated herein (the "Pledged Stock") by the holders thereof ("Pledgees");
and
WHEREAS, to provide for the appropriate administration of the
Pledged Stock, Target, Parent and Parent Subsidiary desire to establish an
escrow account with the Escrow Agent subject to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, the receipt and sufficiency of
which are hereby acknowledged, Parent, Parent Subsidiary, Target and the Escrow
Agent (collectively, the "Parties" and sometimes, individually, a "Party"),
intending to be legally bound, hereby agree as follows:
1. Appointment. Parent, Parent Subsidiary and Target hereby
appoint the Escrow Agent as escrow agent, and the Escrow Agent hereby accepts
such appointment, on the terms and conditions set forth herein. Target hereby
appoints the Representative to act as the agent of the holders of the Pledged
Stock hereunder, which Representative shall have full authority to act on behalf
of the Pledgees with respect to the Pledged Stock for purposes of this Agreement
and the Indemnification Agreement.
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2. Establishment of Escrow.
(a) Concurrently herewith, Target is depositing stock
certificates and warrant certificates representing the Pledged Stock with the
Escrow Agent, together with stock powers executed in blank related thereto.
(b) The Escrow Agent shall hold and disburse the
Pledged Stock deposited with the Escrow Agent under this Agreement (the "Escrow
Stock") pursuant to and in accordance with this Agreement.
(c) The Escrow Agent shall disburse Escrow Stock only
when and to the extent required by Section 3 hereof.
3. Release from Escrow; Escrow Period.
(a) Parent and Parent Subsidiary may at any time, and
from time to time, prior to the termination of this Agreement deliver written
instructions to the Escrow Agent, with a copy to the Representative, directing
the Escrow Agent to disburse all or a portion of the Escrow Stock to any person
(including Parent and Parent Subsidiary) in the amounts specified therein for
the purpose (but only for the purpose) of satisfying any obligation based on,
arising from or in connection with all claims for indemnification asserted in
writing by the Parent, Parent Subsidiary or Surviving Corporation pursuant to
the Indemnification Agreement. On the fifteenth business day after delivery of
these instructions to Representative, and provided that the Representative has
not objected to such notice in writing delivered to both the Parent and Escrow
Agent and the dispute has not been resolved as provided in the Indemnification
Agreement, Escrow Agent shall release to Parent and Parent Subsidiary all or
part of the Escrow Stock in accordance with these instructions. All such
disputes shall be resolved as provided in the Indemnification Agreement.
(b) On or promptly after August 9, 2001, or, if
earlier, on the date on which the Representative, Parent and Parent Subsidiary
deliver to the Escrow Agent a written statement that no further liability exists
pursuant to the Merger Agreement, the Escrow Agent shall disburse to the
Pledgees, in accordance with the joint instructions of the parties, all Escrow
Stock then held by it (i) less any amounts which it shall have then previously
been instructed to disburse pursuant to Section 3(a) hereof but shall not have
disbursed for any reason.
(c) Upon receipt by the Escrow Agent from time to time
and at any time during the term of this Agreement of joint written instructions
executed by the Representative, Parent and Parent Subsidiary or a court order or
arbitration award directing disbursement of Escrow Stock, the Escrow Agent shall
promptly disburse Escrow Stock then held by it to the persons and in the amounts
specified therein.
(d) Notwithstanding anything contained herein to the
contrary, the Escrow Agent shall not be required at any time to disburse more
than the aggregate amount of Escrow Stock then held by it.
(e) Nothing contained herein shall obligate or be
construed to obligate the Representative, Parent and Parent Subsidiary to submit
any dispute or claim to arbitration.
<PAGE>
(f) This Agreement, except Sections 4, 5 and 6, shall
terminate on disbursement of all Escrow Stock.
4. Responsibilities and Duties of Escrow Agent.
(a) The Escrow Agent shall not incur any liability for
following the instructions herein contained or provided for in any written
instructions given by the Representative, Parent and/or Parent Subsidiary
pursuant to the terms hereof. In the event that the Escrow Agent shall be
uncertain as to its duties or rights hereunder, shall fail to receive written
instructions or shall receive instructions, claims or demands from any other
Party which, in its opinion, conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action and its sole
obligation shall be to keep safely all property held in escrow until it shall be
directed otherwise in writing by all of the other Parties or by a final order or
judgment of a court of competent jurisdiction.
(b) The Escrow Agent may rely and shall be protected
in acting or refraining from acting on any written notice, instruction or
request furnished to it hereunder. The Escrow Agent shall not have any
responsibility for the genuineness or validity of any document or other material
presented to or deposited with it nor any liability for any action taken,
suffered or omitted in accordance with any written instructions or certificates
given to it hereunder and believed by it to be signed by the proper party or
parties.
(c) The Escrow Agent shall not be liable for any
action taken by it in good faith and believed by it to be authorized or within
the rights or powers conferred on it by this Agreement. The Escrow Agent may
consult with counsel of its choice, and shall not be liable for any action
taken, suffered or omitted by it in good faith in accordance with the opinion of
such counsel.
(d) The Escrow Agent shall not be required to
institute legal proceedings of any kind and shall not be required to initiate or
defend any legal proceedings that may be instituted against it by third parties
with respect to the subject matter of this Agreement. If the Escrow Agent does
elect to act it will do so only to the extent that it is indemnified to its
satisfaction against the cost and expense of such defense or initiation.
(e) The duties and responsibilities of the Escrow
Agent are those herein specifically provided and no other. The Escrow Agent
shall not have any liability under, or duty to inquire into, the terms and
provisions of the Merger Agreement or of any other agreement or instrument,
other than this Agreement. Its duties are ministerial in nature and the Escrow
Agent shall not incur any liability whatsoever other than for its own willful
misconduct or gross negligence.
5. Indemnification. Parent, Parent Subsidiary and the
Representative on behalf of the Pledgees hereby, jointly and severally, agree to
indemnify, defend and hold the Escrow Agent harmless from and against any and
all loss, damage, tax, liability and expense that may be incurred by the Escrow
Agent arising out of or in connection with its duties, obligations or
performance as escrow agent under this Agreement, except as caused by its gross
negligence or willful misconduct, including the legal costs and expenses of
defending itself against or
<PAGE>
initiating any claim or liability in connection with its performance hereunder.
The terms of this paragraph shall survive the termination of (i) this Agreement
and, (ii) with respect to claims arising in connection with the Escrow Agent's
duties while acting as such, the resignation or removal of the Escrow Agent.
6. Expenses of Escrow Agent. The Representative on behalf of
the Pledgees, Parent and Parent Subsidiary, jointly and severally, agree to pay
or reimburse the Escrow Agent on request for all expenses, disbursements and
advances, including reasonable attorneys' fees, incurred or made by it in
connection with carrying out its duties hereunder.
7. Discharge and Resignation of Escrow Agent. The Escrow Agent
may resign and be discharged from its duties or obligations hereunder by giving
the Representative, Parent and Parent Subsidiary at least 30 days prior notice
in writing of such resignation, but such resignation shall not be effective
until a successor escrow agent shall have been appointed and shall have accepted
such appointment in writing. As soon as practicable after its resignation, the
Escrow Agent shall turn over to a successor escrow agent appointed by the
Representative, Parent and Parent Subsidiary the Escrow Stock on presentation of
the document appointing the successor escrow agent and its acceptance thereof
whereupon all of the Escrow Agent's duties and obligations hereunder shall cease
and terminate. If no successor escrow agent is so appointed within the 30 day
period following such notice of resignation, the resigning Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
escrow agent.
8. Notice. All notices required or permitted to be given
pursuant to this Agreement shall be given in writing, shall be transmitted by
registered or certified mail, postage prepaid, and shall be addressed as
follows:
When Escrow Agent is the intended recipient:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Attention: Margaret Pulgini
Facsimile: (302) 427-4605
If to Parent or Parent Subsidiary:
Talk.com, Inc.
6805 Route 202
New Hope, PA 18938
Attention: Aloysius T. Lawn, IV, Esq.
Executive Vice President -
General Counsel and Secretary
Facsimile: (215) 862-1960
With a copy to:
<PAGE>
Kelley Drye & Warren LLP
1200 19th Street, N.W.
Suite 500
Washington, D.C. 20036
Attention: Joseph B. Hoffman, Esq.
Facsimile: (202) 955-9792
When the Pledgees or the Representative are the intended
recipients:
Kenneth G. Baritz
3427 NW 55th Street
Fort Lauderdale, FL
Facsimile: (954) 739-2476
A Party may designate a new address to which notices required
or permitted to be given pursuant to this Agreement shall thereafter be
transmitted by giving written notice to that effect to the other Parties. Each
notice transmitted in the manner described in this Section 8 shall be deemed to
have been given, received and become effective for all purposes at the time it
shall have been delivered to the addressee as indicated by the return receipt.
9. Entire Agreement; Binding Effect; Assignment. The terms and
provisions of this Agreement together with the Indemnification Agreement
constitute the entire agreement between the Parties with respect to the subject
matter hereof. This Agreement shall be binding on and inure to the benefit of
the Parties and their respective successors and assigns. No Party shall assign
any of its rights or delegate any of its duties under this Agreement (by
operation of law or otherwise) without the prior written consent of the other
Parties. In the case of any inconsistency or conflict between the provisions of
this Agreement and the provisions of the Merger Agreement, the provisions of
this Agreement shall govern.
10. Amendments. The Escrow Agent shall not be bound by any
modification, amendment, termination, cancellation, rescission or supersession
of this Agreement unless the same shall be in writing and signed by all of the
other Parties and, if its rights, duties, immunities or indemnities as Escrow
Agent are affected thereby, unless it shall have given its prior written consent
thereto.
11. Governing Law; Jurisdiction. Except as expressly set forth
below, this Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Delaware without giving effect to any choice or
conflict of law provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in the Commonwealth of
Virginia in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each Party also agrees not to bring
any action or proceeding arising out of or relating to this Agreement in any
other court. Each of the parties hereto waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought and waives any bond,
surety or other security that might be required of
<PAGE>
any other Party with respect thereto. Each Party appoints C-T Corporation (the
"Process Agent") as his or its agent to receive on his or its behalf service of
copies of the summons and complaint and any other process that might be served
in the action or proceeding. Any Party may make service on any other Party by
sending or delivering a copy of the process (A) to the Party to be served at the
address and in the manner provided for the giving of notices in Section 8 above
or (B) to the party to be served in care of the Process Agent at the address and
in the manner provided for the giving of notices in Section 8 above. Nothing in
this Section 11, however, shall affect the right of any Party to serve legal
process in any other manner permitted by law or at equity. Each Party agrees
that a final judgment in any action or proceeding so brought shall be conclusive
and may be enforced by suit on the judgment or in any other manner provided by
law or at equity. EACH OF PARENT, PARENT SUBSIDIARY, TARGET, REPRESENTATIVE (ON
BEHALF OF PLEDGEES) AND ESCROW AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.
12. Headings; Counterparts. The headings in this
Agreement have been inserted for convenience of reference only, shall not be
considered a part of this Agreement and shall not limit, modify or affect in any
way the meaning or interpretation of this Agreement. This Agreement may be
signed in any number of counterparts.
13. No Modification of Merger Agreement. Except as
expressly provided herein, the rights and obligations of Parent, Parent
Subsidiary and Target in this Agreement shall in no way affect their respective
rights and obligations under the Merger Agreement.
<PAGE>
IN WITNESS WHEREOF, the Parties have duly executed this
Agreement effective the date first above written.
ACCESS ONE COMMUNICATIONS CORP.
By: /s/ Elizabeth Stallings
------------------------------------------
Name: Elizabeth Stallings
Title: President
ALADDIN ACQUISITION CORP.
By: /s/ Aloysius T. Lawn IV
------------------------------------------
Name: Aloysius T. Lawn IV
Title: Executive Vice President -
General Counsel and Secretary
TALK.COM, INC.
By: /s/ Aloysius T. Lawn IV
------------------------------------------
Name: Aloysius T. Lawn IV
Title: Executive Vice President -
General Counsel and Secretary
/s/ Ken Baritz
------------------------------------------
Kenneth G. Baritz (as Representative)
WILMINGTON TRUST COMPANY,
as Escrow Agent
By: /s/ D. P. Fontello
------------------------------------------
Name: David P. Fontello
Title: Vice President
