Exhibit 99.1
EXCHANGE AGREEMENT AMENDMENT AGREEMENT
EXCHANGE AGREEMENT AMENDMENT AGREEMENT (this "Agreement"), dated as of
the 10th day of July 2001, by and among EasyLink Services Corporation (formerly
Xxxx.xxx, Inc.), a Delaware corporation ("EasyLink"), Xxxxx.xxx, Inc., a New
Jersey corporation ("Xxxxx.xxx"), and the Investors named on the signature pages
hereto (the "Investors").
WHEREAS, EasyLink, Xxxxx.xxx and the Investors are parties to a certain
Exchange Agreement dated as of September 13, 2000 (as amended, the "Exchange
Agreement"), whereby EasyLink granted holders of Xxxxx.xxx's Series A
Exchangeable Convertible Preferred Stock (the "Preferred Stock") the right to
exchange the Preferred Stock for EasyLink's Class A Common Stock, $.01 par value
(the "Common Stock"), subject to the terms and conditions specified therein; and
WHEREAS, EasyLink and the Investors have agreed that the Investors
shall exercise the exchange right provided in the Exchange Agreement today on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the promises and mutual agreements
contained herein, the parties hereto agree as follows (with all capitalized
terms used herein that are not defined herein having the respective meanings
ascribed to such terms in the Exchange Agreement).
SECTION 1. AMENDMENT OF EXCHANGE AGREEMENT.
A. All references in the Exchange Agreement to "Xxxx.xxx, Inc." shall be
deemed to be references to "EasyLink Services Corporation" and all
references to "Xxxx.xxx" shall be deemed to be references to "EasyLink."
B. EasyLink and the Investors hereby agree that the Investors shall
irrevocably exercise, and the Investors do hereby irrevocably exercise,
their rights under the Exchange Agreement to exchange all of the shares of
Preferred Stock held by them for the number of Exchange Shares determined
herein (the "Exchange"). The closing of the exchange (the "Closing") shall
occur upon or as soon as practicable after September 13, 2001 on a date
which is within 3 business days after satisfaction or waiver of all
conditions to closing or such later date as EasyLink and the Investors
shall agree (the date on which the Closing occurs, the "Closing Date"). The
consummation of the Exchange is subject only to satisfaction or waiver of
the conditions set forth in Section 3 of this Agreement.
C. The number of Exchange Shares issuable upon the closing of the Exchange
shall equal the quotient obtained by dividing (A) the product of the
original purchase price per share of the Preferred Stock (i.e. $1.04 per
share), as appropriately adjusted for any stock split, stock dividend,
stock combination or recapitalization having similar effect in respect of
the Preferred Stock, multiplied by the number of shares of Preferred Stock
to be exchanged (or the number of shares of Preferred Stock that were
converted or changed into Other Exchange Consideration, as defined in the
Exchange Agreement, being exchanged) by (B) an Exchange Price equal to the
lower of (i) $3.00 (as appropriately adjusted for any stock split, stock
dividend, stock combination or recapitalization having similar effect in
respect of the Common Stock) and (ii) the average of the closing prices
over the five consecutive trading days ending on September 13, 2001 of the
Common Stock on the Nasdaq National Market or successor market on which the
Common Stock is then traded, provided in the case of this clause (ii) only
that such closing price shall be deemed to be not less than $1.00 (in each
case, as adjusted for any stock split, stock dividend or recapitalization
having similar effect in respect of the Common Stock). Notwithstanding the
foregoing, if the Common Stock has been converted or changed into other
securities, property or cash pursuant to any recapitalization, merger,
consolidation, sale of all or substantially all of the assets of or other
reorganization involving EasyLink prior to the consummation of the
exchange, then (I) all references herein to Exchange Shares shall be deemed
to be a reference to such other securities, property or cash, and (II) in
the case of any merger, consolidation or sale of all or substantially all
of the assets of or other similar sale of EasyLink prior to the
commencement of the Option Period and in which the holders of voting
securities of EasyLink immediately prior to such transaction hold less than
a majority of the total voting power of the outstanding voting securities
of the surviving entity or transferee entity in such transaction, the
Exchange Price for purposes of clause (B) above shall be equal to the lower
of (x) $3.00 (as appropriately adjusted for any stock split, stock
dividend, stock combination or recapitalization having similar effect in
respect of the Common Stock) and (y) the price per share of Common Stock
received pursuant to such merger, consolidation, sale of all or
substantially all of the assets of or other similar sale of EasyLink,
provided that such price shall be deemed to be not less than $1.00 (in each
case, as adjusted for any stock split, stock dividend or recapitalization
having similar effect in respect of the Common Stock).
D. Notwithstanding Section 3.01 of the Exchange Agreement, if EasyLink is not
eligible to file a Form S-3 registration statement at the time of complying
with its obligations under Section 3.01, EasyLink may file an S-1 or other
available registration statement for such purpose. If a registration
statement covering the Exchange Shares has not been declared effective by
December 31, 2001, then the Company shall issue to the original holders of
Exchange Shares an additional 100,000 shares of Class A common stock (to be
allocated pro rata among such holders based on the number of Exchange
Shares initially issued to them) per month (pro rated for partial months)
until the earlier of (i) the effectiveness of such a registration statement
and (ii) the date on which the Exchange Shares are eligible for resale
pursuant to Rule 144 promulgated under the Securities Act.
E. In the event of any conflict between this Agreement and the Exchange
Agreement, this Agreement shall govern.
SECTION 2. IRREVOCABLE PROXY; WAIVER OF CLAIMS; DELIVERY OF SHARE CERTIFICATES.
A. Each Investor hereby grants to EasyLink to the extent permitted by
applicable law an irrevocable proxy to vote, to dispose of and to take all
other actions in respect of the Preferred Stock held by such Investor
pending the Closing of the Exchange. The parties acknowledge that by virtue
of, among other things, this Agreement and the Exchange Agreement, such
proxy is coupled with an interest. Such proxy shall expire upon the earlier
of (i) the termination of this Agreement by mutual written consent of the
Company, on the one hand, and the Investors, on the other hand, and (ii)
one year after the date hereof. Each Investor acknowledges that EasyLink
may, in its sole discretion, take any all actions in respect of such shares
of Preferred Stock that any holder of such shares may take, including but
not limited to voting in favor of, or executing a written consent in favor
of, any sale of Xxxxx.xxx, Inc. or any of its assets (whether by merger or
consolidation, sale of stock (including such shares of Preferred Stock) or
the sale or transfer of all or substantially all of the assets of
Xxxxx.xxx, Inc.), the amendment or waiver of any rights or obligations of
Xxxxx.xxx, Inc. under the bridge notes or warrants issued pursuant to
bridge funding agreement dated as of February 5, 2001 or any under any
other agreements to which Xxxxx.xxx, Inc. is a party or any liquidation and
dissolution of Xxxxx.xxx, Inc. The Investors also hereby waive any and all
claims against EasyLink arising out of or relating to any actions taken or
omitted to be taken by EasyLink with respect to Xxxxx.xxx, Inc. on or
before the termination of this Agreement.
B. Each Investor agrees to deliver to EasyLink promptly after the date hereof
all certificates evidencing all of the shares of Preferred Stock held by
such Investor. EasyLink shall, pending the Closing, hold such shares and
any other securities or other property into or for which such shares shall
have been converted or exchanged or that shall have been distributed in
respect of such shares. EasyLink shall affix a legend to each certificate
evidencing shares of Preferred Stock and any such other securities to the
effect that the shares evidenced by such certificate are subject to, among
any other applicable restrictions, the restrictions contained in this
Agreement and the Exchange Agreement.
SECTION 3. NASDAQ WAIVER OR STOCKHOLDER APPROVAL
A condition to the consummation of the Exchange on the terms provided
herein shall be that EasyLink shall have either (i) received a waiver from the
NASDAQ Stock Market from its shareholder approval rules to the extent applicable
in connection with the issuance of the Exchange Shares as a result of this
Agreement and complied with any conditions contained in such waiver in order to
consummate the Exchange at the Closing or (ii) obtained shareholder approval to
the extent required under the rules of the NASDAQ Stock Market of the issuance
of the Exchange Shares in accordance with the terms of this Agreement pursuant
to a duly called meeting of shareholders of EasyLink. EasyLink agrees to take
all action necessary to obtain the waiver described in clause (i) above and in
the absence of such waiver to obtain shareholder approval as promptly as
practicable, but in any event on or before September 13, 2001. Xxxxx.xxx and the
Investors agree to a make any reasonable non-economic adjustments to the terms
of the transactions contemplated hereby to accommodate any requests by NASDAQ.
SECTION 4. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with, and governed
by, the laws of the State of New York without giving effect to the principles of
the conflict of laws thereof.
WHEREAS, the undersigned have executed this Exchange Agreement
Amendment Agreement as of the date first above written.
EASYLINK SERVICES CORRPORATION
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, Chief Executive Officer
XXXXX.XXX, INC.
By: s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, Chairman
INVESTORS:
ASIASTAR IT FUND, L.P.
By: AsiaStar Partners, L.P., its General Partner
By: Sycamore Management Corporation,
its General Partner
By: /s/Xxxx X.Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Treasurer
PRIMUS CAPITAL FUND V LIMITED PARTNERSHIP
By: PRIMUS VENTURE PARTNERS V, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
PRIMUS EXECUTIVE FUND V LIMITED PARTNERSHIP
By: PRIMUS VENTURE PARTNERS V, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
THE XXXXXXXX FUND, INC.
By: /s/ Xxxxxxxx Xxxxxxx
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Name:
Title:
/s/ Xxxxxxxx Xxxxxxx
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XXXXXXXX XXXXXXX
XXXXX XXXXXX AND XXXXX XXXXXX, JTROS
/S/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
/S/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
EMC INVESTMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: VP Corporate Development
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Xxxxxx Xxxxxxx
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Xxxxxxxxxxx Xxxxxx
/s/ Xxxx Xxxxxxx Authorized Signer
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Xxxx Xxxxxx
/s/ Xxxx Xxxxxxx Authorized Signer
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Xxxxxxx Xxxxx
/s/ Xxxx Xxxxxxx Authorized Signer
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Kilin To
/s/ Xxxx Xxxxxxx Authorized Signer
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Xxxxxxx Xxxxxx
