SHORETEL, INC. (NASDAQ:SHOR) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On September25, 2017, Mitel, in connection with the consummation of the Offer and the Merger entered into a first amendment to its secured credit agreement between, among others, Mitel and Parent as the borrowers (the “Borrowers”), Citizens Bank, N.A., as the administrative agent, BMO Capital Markets Corp., Citizens Bank, N.A., HSBC Bank Canada and Canadian Imperial Bank of Commerce, as lead arrangers and the other banks and financial institutions named therein (the “Credit Agreement Amendment”). The Credit Agreement Amendment provides for incremental term loans in an aggregate principal amount of US$300million (the “Incremental Term Loans”). The Credit Agreement Amendment amends Mitel’s existing credit facility dated as of March9, 2017 among the Borrowers, Citizens Bank, N.A., as the administrative agent, swingline lender and issuing lender, Citizens Bank, N.A., BMO Capital Markets, Canadian Imperial Bank of Commerce and HSBC Bank Canada, as joint lead arrangers and joint bookrunners, Bank of Montreal, Canadian Imperial Bank of Commerce and HSBC Bank Canada as co-syndication agents, Bank of America, N.A., Export Development Canada and KeyBank National Association as co-documentation agents (as amended by the Credit Agreement Amendment, the “Credit Agreement”), to which the lenders made available to Mitel a term credit facility in an aggregate principal amount of $150million (the “Existing Term Loans”) and a revolving credit facility with $350 in aggregate commitments (the “Revolving Credit Facility” and together with the Existing Term Loans, the “Existing Credit Facilities”).
Subject to certain exceptions, all of Mitel’s obligations under the Credit Agreement are or will be guaranteed by each existing or subsequently acquired or created wholly owned material subsidiary of Mitel, including ShoreTel, and are or will be secured on a first priority basis by a perfected first priority security interest in substantially all tangible and intangible assets of Mitel and each of such guarantors and in the equity interests of Mitel’s and such guarantors’ direct material subsidiaries.
Proceeds from the Incremental Term Loans and the Revolving Credit Facility, together with cash on hand from the combined company, were used to finance the acquisition of ShoreTel, as well as fees and expenses related to the foregoing.
The Incremental Term Loans bear interest at LIBOR (subject to a 1.00% floor), or a base rate (at the option of Mitel), plus an applicable margin which is currently 3.75% and 2.75%, respectively, and the Incremental Term Loans mature on September25, 2023. The Incremental Term Loans require quarterly principal repayments of 0.25% of the original outstanding principal amount.
Mitel is also required to repay the Incremental Term Loans, pro rata with the Existing Term Loans, with 50% of annual excess cash flow of the Borrowers and their subsidiaries with step-downs to 25% and 0% under certain conditions. The Incremental Term Loans are also subject to a 1% prepayment premium in connection with repricing transactions for the first six months of its term.
The Incremental Term Loans will contain representations and warranties and affirmative and negative covenants, including, among other things, restrictions on indebtedness, investments, sales of assets, mergers and acquisitions, transactions with affiliates, liens and dividends and other distributions, consistent with the Existing Credit Facilities, subject to certain amendments made to the Credit Agreement Amendment, including to the restricted payments covenant. The Incremental Term Loans will also include events of default, consistent with the Existing Credit Facilities, provided that a breach of the financial covenants in the Credit Agreement shall not constitute an Event of Default under the Incremental Term Loans unless and until the lenders under the Existing Credit Facilities terminate their commitments and accelerate those facilities.
The foregoing description of the Credit Agreement Amendment and the transactions contemplated thereby, and ShoreTel’s guarantee of the obligations thereunder, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Credit Agreement Amendment, which is attached as Exhibit 10.1 and is incorporated herein by reference.
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Item 1.01 Termination of Material Definitive Agreement.
On September25, ShoreTel terminated its Amended and Restated Credit Agreement, dated as of October22, 2014, among ShoreTel, the banks and other financial institutions or entities from time to time parties thereto, Silicon Valley Bank, as the Issuing Lender and Swingline Lender (as such terms are defined therein) and Silicon Valley Bank, as administrative agent and collateral agent, as amended (the “ShoreTel Credit Facility”). There were no amounts outstanding under the ShoreTel Credit Facility. The ShoreTel Credit Facility provided for a revolving loan facility for an aggregate principal amount not exceeding $100.0million. The ShoreTel Credit Facility was secured by substantially all of ShoreTel’s assets. As of June30, 2017, ShoreTel had $51.7million available for borrowing under the ShoreTel Credit Facility.
The information contained in the Introductory Note is incorporated by reference into this Item 1.01.
Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information contained in Item 1.01above is incorporated by reference into this Item 1.01.
Item 1.01 Notice of Delisting or Failure to Satisfy a Continuing Listing Rule or Standard; Transfer of Listing.
On September25, 2017, in connection with the consummation of the Offer and the Merger, ShoreTel (i)notified the NASDAQ Stock Market (“NASDAQ”) of the consummation of the Merger and (ii)requested that NASDAQ (x)halt trading of the Shares effective before the opening of trading on September25, 2017, and permanently suspend trading at the close of trading on September25, 2017, and (y)file with the SEC a Form25 Notification of Removal from Listing and/or Registration to delist and deregister the Shares under Section12(b)of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Shares, which previously traded under the symbol “SHOR”, ceased to be traded on NASDAQ prior to the opening of trading on September25, 2017. ShoreTel intends to file with the SEC a Form15 requesting that the Shares be deregistered and that ShoreTel’s reporting obligations under Sections13 and 15(d)of the Exchange Act be terminated.
The information contained in the Introductory Note is incorporated by reference into this Item 1.01.
Item 1.01 Material Modification of Rights of Security Holders.
The information contained in the Introductory Note, Item 1.01 and Item 1.01 is incorporated by reference into this Item 1.01.
Item 1.01 Changes in Control of Registrant.
As described in the Introductory Note above, on September25, 2017, the Offeror accepted for payment all Shares that were validly tendered and not properly withdrawn prior to the expiration of the Offer. As a result of the acceptance of such Shares, a change in control of ShoreTel has occurred.
The information contained in the Introductory Note and in Item 1.01 is incorporated by reference into this Item 1.01.
Item 1.01 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
At the Effective Time, the members of the board of directors of ShoreTel resigned, and immediately following the Effective Time, Steve E. Spooner, Colin McAnuff and Greg Hiscock were elected as members of the board of directors of the Surviving Corporation, each to hold office until their respective successors are duly elected or appointed and qualified or until their earlier respective deaths, resignations or removals from office.
Following the Effective Time on September26, 2017, Don Joos, President and Chief Executive Officer of ShoreTel, David Petts, Senior Vice President of Worldwide Sales and Customer Success of ShoreTel, Eugenia Corrales, Senior Vice President of Solutions Group of ShoreTel and Bharath Oruganti, Senior Vice
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President of Worldwide Business Operations of ShoreTel were terminated as officers of ShoreTel effective immediately and Michael Healy, Senior Vice President and Chief Financial Officer of ShoreTel, was terminated as an officer of ShoreTel effective October13, 2017. On September26, 2017, Mr.Spooner was appointed as President, Mr.McAnuff was appointed as Treasurer, Mr.Hiscock was appointed as Secretary and Mr.Pethakas was appointed as Vice President of the Surviving Corporation.
Information about Mr.Spooner, age 59, is contained in Mitel’s Definitive Proxy Statement filed on April21, 2017, which information is incorporated herein by reference. Information about Mr.McAnuff, age 56, and Mr.Hiscock, age 50, is contained in Exhibit (a)(1)(A) to Mitel’s Schedule TO filed on August17, 2017, which information is incorporated by reference.
Mr.Pethakas, age 53, was appointed Vice President – Global Tax of Mitel in September 2016. Prior to joining Mitel, Mr.Pethakas served as Head – Global Tax& Transfer Pricing at Redknee Solutions Inc. and prior to that Vice President – Taxation at Constellation Software Inc. Mr.Pethakas does not currently hold any directorships.
Item 1.01 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
In connection with the consummation of the Merger, the certificate of incorporation of ShoreTel and the bylaws of ShoreTel were each amended and restated in their entirety as set forth in Exhibits 3.1 and 3.2 hereto, which are incorporated by reference into this Item 1.01.
Item 1.01 Other Events.
On September25, 2017, Mitel issued the press release attached hereto as Exhibit 99.1 (the “Press Release”) announcing that Mitel, Parent, the Offeror and ShoreTel consummated the Merger. The Press Release is incorporated by reference herein.
| Item | 9.01 Financial Statements and Exhibits. |
(d) Exhibits.
|
ExhibitNo. |
Description |
| 2.1 | Agreement and Plan of Merger, dated as of July 26, 2017, by and among Mitel U.S. Holdings, Inc., Shelby Acquisition Corporation, ShoreTel, Inc. and Mitel Networks Corporation (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Mitel Networks Corporation on July28, 2017). |
| 3.1 | Amended and Restated Certificate of Incorporation of ShoreTel, Inc. |
| 3.2 | Amended and Restated By-laws of ShoreTel, Inc. |
| 10.1 | First Amendment to Credit Agreement, dated September 25, 2017, by and among Mitel Networks Corporation and Mitel US Holdings, Inc. as the borrowers, Citizens Bank, N.A., as the administrative agent, BMO Capital Markets Corp., Citizens Bank, N.A., HSBC Bank Canada and Canadian Imperial Bank of Commerce, as lead arrangers and the other banks and financial institutions named therein (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by Mitel Networks Corporation on September27, 2017). |
| 99.1 | Press Release, dated September25, 2017. |
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ShoreTel Inc ExhibitEX-3.1 2 d396545dex31.htm EX-3.1 EX-3.1 Exhibit 3.1 FOURTH RESTATED CERTIFICATE OF INCORPORATION OF SHORETEL,…To view the full exhibit click here
About SHORETEL, INC. (NASDAQ:SHOR)
ShoreTel, Inc. is a provider of business communication solutions. The Company is engaged in the design, development, marketing and sale of business communication solutions. The Company is focused on the small and medium sized businesses seeking a unified communications (UC) solution allowing them to communicate anytime, anyplace and through any device they chose. The Company provides this to the market through two solutions: ShoreTel Connect, its UC solution, and Contact Center offering and ShoreTel Summit, its platform for developers and integrators. ShoreTel Connect delivers a featured UC solution and applications, such as mobility, collaboration and workgroups. ShoreTel Connect offers three different delivery models, including cloud, onsite and hybrid. Connect Cloud provides a hosted voice solution to its customers. Connect OnSite provides its customers the ability to own and operate their equipment. Connect Hybrid enables its customers to use both its cloud and onsite offerings.