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 Commission File Number:
earliest event reported):
OCTOBER 14, 1999 1-10210
eGLOBE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3486421
(State or other jurisdiction of (IRS Employer Identification
incorporation) Number)
1250 24th Street, NW, 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)
NA
EGLOBE, INC.
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On October 14, 1999, eGlobe, Inc. ("eGlobe" or the "Company"), acquired
iGlobe, Inc. ("iGlobe"), a wholly owned subsidiary of Highpoint
Telecommunications, Inc. ("Highpoint" or "Seller"). Recently established by
Highpoint, iGlobe has created an infrastructure supplying Internet Protocol
("IP") Services, particularly Voice over IP ("VoIP"), throughout Latin America.
Pursuant to the Stock Purchase Agreement dated as of October 4, 1999 by
and among eGlobe, iGlobe, and Highpoint, attached hereto as Exhibit 2.1, eGlobe
purchased iGlobe for convertible preferred stock with a liquidation value of
$9.0 million and the assumption of $1.5 million in liabilities. As set forth in
the Certificate of Designations attached hereto as Exhibit 4.1, the convertible
preferred stock carries an annual cumulative dividend of twenty percent (20%),
which will accrue and be paid annually or at conversion in cash or eGlobe common
stock, at the option of eGlobe. The eGlobe convertible preferred stock is
convertible into common stock one (1) year after the date of closing at the
conversion price of $2.385 or 3,772,003 shares of eGlobe common stock.
Additionally, the Seller will be given a non-voting beneficial interest
in a joint venture business currently known as IP Solutions, B.V. (the "Carried
Interest"). The Carried Interest will be equal to twenty percent (20%) of the
equity interest subscribed or held by the Company in IP Solutions, B.V. at
October 14, 1999, subject to pari pasu adjustment and dilution for investment in
excess of five million dollars ($5,000,000) in IP Solutions, B.V., eGlobe will
escrow twenty percent (20%) of its equity interest in IP Solutions, B.V. as
security for the Carried Interest, and will take all reasonable and appropriate
actions to provide to Highpoint the economic benefit of the Carried Interest.
The purchase price (other than Carried Interest described above) was paid in
full at closing, however, the number of shares of eGlobe convertible preferred
stock equivalent in value to twenty-five percent (25%) of the total value of the
preferred stock issued to Seller will serve as collateral for a period of one
year following the closing for the payment of any indemnifiable claim identified
in the Stock Purchase Agreement.
On August 1, 1999 eGlobe and Highpoint entered into a Transition
Management and Services Agreement (the "TSA"), attached hereto as Exhibit 2.2,
wherein eGlobe agreed to take responsibility for the ongoing financial condition
(as set forth in the TSA) of iGlobe and its businesses with effect from August
1, 1999. The TSA terminates with the consummation of the transactions
contemplated by the Stock Purchase Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial statements of Business Acquired
It is not practicable to provide financial statements for iGlobe, Inc.
at this time. The statements will be filed as soon as they are prepared and not
later than December 28, 1999.
(b) Pro Forma Financial Information
It is not practicable to provide pro forma financial statements for
iGlobe, Inc. at this time. The statements will be filed as soon as they are
prepared and not later than December 28, 1999.
(c) Exhibits.
2.1 Stock Purchase Agreement dated as of October 4, 1999 by and
among eGlobe, Inc., iGlobe, Inc. and Highpoint
Telecommunications, Inc.
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4.1 Certificate of Designations, Rights, Preferences and
Restrictions of 20% Series M Cumulative Convertible Preferred
Stock
10.1 Transition Management & Services Agreement between eGlobe,
Inc. and Highpoint Telecommunications Inc. dated as of August
1, 1999
99.1 Press Release, dated October 6, 1999, regarding the
Stock Purchase Agreement and the transactions contemplated
thereby.
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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: October 29, 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 Page
- ------- ----------- ----
2.1 Stock Purchase Agreement dated as of October 4, 1999 by and among
eGlobe, Inc., iGlobe, Inc. and Highpoint Telecommunications, Inc..
4.1 Certificate of Designations, Rights, Preferences and Restrictions of
20% Series M Cumulative Convertible Preferred Stock
10.1 Transition Management & Services Agreement between eGlobe, Inc. and
Highpoint Telecommunications Inc. dated as of August 1, 1999
99.1 Press Release, dated October 4, 1999, regarding the Stock Purchase
Agreement and the transactions contemplated thereby.