TUCOWS INC. (NASDAQ:TCX) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 under the heading First Amended and Restated
Credit Agreement.
Both Rightside, on the one hand, and the Company and Buyer, on
the other hand, have agreed to indemnify the other party for
losses arising from certain breaches of the Purchase Agreement
and for certain other liabilities, subject to certain
limitations. In connection with the Purchase Agreement, the
Company, Buyer, the Sellers and eNom will also enter into
additional ancillary agreements, including a transition services
agreement.
The foregoing description of the Purchase Agreement and the
transactions contemplated thereby does not purport to be complete
and is subject to and qualified in its entirety by reference to
the full text of the Purchase Agreement, a copy of which is
attached hereto as Exhibit 2.1 and is incorporated herein by
reference.
The representations, warranties and covenants set forth in the
Purchase Agreement have been made only for the purposes of the
Purchase Agreement and solely for the benefit of the parties
thereto and may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk
between the parties to the Purchase Agreement instead of
establishing these matters as facts. In addition, such
representations and warranties were made only as of the dates
specified in the Purchase Agreement and information regarding the
subject matter thereof may change after the date of the Purchase
Agreement. Accordingly, the Purchase Agreement, a copy of which
is attached hereto as Exhibit 2.1, is included only to provide
investors with information regarding its terms and not to provide
investors with any other factual information regarding the
Company, Buyer, eNom or their respective businesses as of the
date of the Purchase Agreement or as of any other date.
First Amended and Restated Credit Agreement
On January 20, 2017, the Company and its wholly owned
subsidiaries, Tucows.com Co., Ting Fiber, Inc., Ting Inc.,
Tucows (Delaware) Inc. and Buyer (each, a Borrower and
together, the Borrowers, collectively with the Company, Tucows)
entered into a First Amended and Restated Credit Agreement (the
Amended Credit Agreement) with Bank of Montreal, as
administrative agent (BMO or the Administrative Agent), and the
lenders party thereto (collectively, the Lenders) to, among
other things, reduce the existing non-revolving facility (such
existing non-revolving facility, together with other existing
facilities, the Existing Facilities) from $40 million to $35
million, and establish a non-revolving credit facility of $85
million (the New Facility, and together with the Existing
Facilities, as amended by the Amended Credit Agreement, the
Credit Facility), of which approximately $84.5 million was
drawn, to assist Tucows in funding the eNom Acquisition in
accordance with the terms and conditions of the Purchase
Agreement. Under the Amended Credit Agreement, the Company has
access to an aggregate of $140 million in funds.
Borrowings under the New Facility will accrue interest and
standby fees based on the Companys Total Funded Debt to EBITDA
and the availment type in the same manner as the Existing
Facilities, as follows:
If Total Funded Debt to EBITDA is less than 1.00, then:
– |
Canadian dollar borrowings based on Bankers Acceptance |
– |
Canadian dollar borrowings based on Prime Rate (CDN$ |
– |
Standby fees will be at 0.40%. |
If Total Funded Debt to EBITDA is greater than or equal to 1.00
and less than 2.00, then:
– |
CDN$ Bankers Acceptance Borrowings or US$ LIBOR |
– |
CDN$ Prime Rate Borrowings, US$ Prime Rate Borrowings or |
– |
Standby fees will be at 0.45%. |
If Total Funded Debt to EBITDA is greater than or equal to 2.00
and less than 2.25, then:
– |
CDN$ Bankers Acceptance Borrowings or US$ LIBOR |
– |
CDN$ Prime Rate Borrowings, US$ Prime Rate Borrowings or |
– |
Standby fees will be at 0.55%. |
If Total Funded Debt to EBITDA is greater than or equal to
2.25, then:
– |
CDN$ Bankers Acceptance Borrowings or US$ LIBOR |
– |
CDN$ Prime Rate Borrowings, US$ Prime Rate Borrowings or |
– |
Standby fees will be at 0.65%. |
The New Facility accrues interest and standby fees at
variable rates based on the Total Funded Debt to EBITDA
ratios described above. Under the payment terms for the New
Facility, the borrowed amount will amortize quarterly over
five years beginning the first full quarter following the
borrowing.
The Amended Credit Agreement contains customary
representations and warranties, affirmative and negative
covenants, and events of default. The Amended Credit
Agreement requires that the Company comply with certain
customary non-financial covenants and restrictions.
The foregoing description of the Amended Credit Agreement
does not purport to be complete and is subject to and
qualified in its entirety by reference to the full text of
the Amended Credit Agreement, a copy of which is attached
hereto as Exhibit 10.1 and is incorporated by reference.
Item2.01Completion
of Acquisition or Disposition of
Assets.
On January 20, 2017, the eNom Acquisition was consummated to
the Purchase Agreement. The information disclosed above in
Item 1.01 under the heading eNom Acquisition is
incorporated herein by reference.
The foregoing description of the Purchase Agreement and the
transactions contemplated thereby does not purport to be
complete and is subject to and qualified in its entirety by
reference to the full text of the Purchase Agreement, a copy
of which is attached hereto as Exhibit 2.1 and is
incorporated herein by reference.
Item2.03 Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of Registrant.
The information disclosed above in Item 1.01 under the
heading First Amended and Restated Credit
Agreement is incorporated herein by reference.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this Current Report on Form 8-K and in any
exhibits furnished or filed herewith that relate to the
Companys future plans, objectives, expectations, performance,
events and the like may constitute forward-looking statements
within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended.
Forward-looking statements are statements that are not
historical facts and can be identified by the use of
forward-looking terminology such as believe, expect, may,
will, likely, could, should, project, could, plan, goal,
potential, pro forma, seek, estimate, intend or anticipate or
the negative thereof, and may include discussions of
strategy, financial projections, guidance and estimates
(including their underlying assumptions), statements
regarding expected timing, completion, costs, effects, plans,
objectives, expectations or consequences of the eNom
Acquisition, and statements about the future performance,
operations, products and services of the Company, including
future financial and operating results and expectations for
sales growth. Such forward-looking statements are subject to
a number of risks and uncertainties that could cause actual
results to differ materially from those anticipated,
including uncertainties regarding the completion of and
proceeds from the eNom Acquisition, uncertainties relating to
the Companys future costs, and other risks and uncertainties
detailed in the Companys filings with the Securities and
Exchange Commission, including under Item 1A. Risk Factors in
the Companys Annual Report on Form 10-K for the year ended
December 31, 2015. All forward-looking statements speak only
as of the date hereof and are based on current information,
expectations and estimates and involve risks, uncertainties,
assumptions and other factors that are difficult to predict
and that could cause actual results and events to vary
materially from what is expressed in or indicated by the
forward-looking statements. In such an event, the Companys
business, financial condition, results of operations or
liquidity could be materially adversely affected and
investors in the Companys securities could lose part or all
of their investments. Readers are strongly urged to read the
full cautionary statements contained in those materials. The
Company assumes no obligation to update any forward-looking
statements to reflect events that occur or circumstances that
exist after the date on which they were made.
Item9.01Financial Statements and
Exhibits.
(a) Financial Statements of Business Acquired
To the extent required by this item, the financial
statements of eNom will be filed by amendment no later than
71 calendar days from the date of the filing of this
Current Report on Form 8-K.
(b) Pro Forma Financial Information
To the extent required by this item, pro forma financial
information will be filed by amendment no later than 71
calendar days from the date of the filing of this Current
Report on Form 8-K.
(d)
ExhibitNo. |
ExhibitTitle |
|
2.1* |
Stock Purchase Agreement, dated as of January 20, |
|
10.1* |
First Amended and Restated Credit Agreement, dated as |
*Schedules to the agreement have been omitted to Item
601(b)(2) of Regulation S-K. The Company undertakes to
furnish supplementally copies of any of the omitted
schedules upon request by the SEC.
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.
Date: January 23, 2017 |
TUCOWSINC. |
|
By: |
/s/ Michael Cooperman |
|
Name: |
Michael Cooperman |
|
Title: |
Chief Financial Officer |
EXHIBITINDEX
ExhibitNo. |
ExhibitTitle |
|
2.1* |
Stock Purchase Agreement, dated as of January 20, |
|
10.1* |
First Amended and Restated Credit Agreement, dated |
*Schedules to the agreement have been omitted
About TUCOWS INC. (NASDAQ:TCX)
Tucows Inc. is engaged in providing Internet services. The Company’s segments include Domain Services and Network Access Services. The Domain Services segment has over three service offerings, being wholesale and retail domain name registration services, value added services and portfolio. The Network Access Services segment includes mobile services and other services. The Network Access Services segment is engaged in the sale of retail mobile phones and services (Ting Mobile) to individuals and small businesses through the Ting Website, as well as other network access services, including high speed Internet access, Internet hosting and network consulting services. The Company focuses on serving the needs of network of resellers by providing services, interfaces, customer service, reseller-oriented technology, and design and development processes. The Company focuses its service offerings under brands, including OpenSRS, YummyNames, Platypus, Hover and Ting. TUCOWS INC. (NASDAQ:TCX) Recent Trading Information
TUCOWS INC. (NASDAQ:TCX) closed its last trading session up +0.05 at 49.00 with 228,936 shares trading hands.