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 earliest event reported) August 6, 2001
E-SYNC NETWORKS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-2401 06-0625999
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
35 Nutmeg Drive, Trumbull, Connecticut 06611
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(Address of principal executive offices) (Zip Code)
(203) 601-3000
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Registrant's telephone number, including area code
(Former name or former address, if changed since last report)
Item 5. Other Events.
On August 6, 2001, E-Sync Networks, Inc., a Delaware corporation
("E-Sync"), entered into a definitive agreement (the "Agreement") relating to
the transactions proposed by that certain non-binding Letter of Intent dated
June 14, 2001 with CRC, Inc., a New York corporation ("CRC"). Pursuant to the
Agreement, upon the satisfaction or waiver of all of the conditions to closing
set forth therein, ESNI will contribute substantially all of its assets and
business (the "ESNI Contributed Assets") to a newly formed joint venture entity
(the "JV") and CRC will contribute assets and business (the "CRC Contributed
Assets") substantially equal in projected revenues to the ESNI Contributed
Assets to the JV (collectively, the "Proposed Transaction"). In connection with
the consummation of the Proposed Transaction, E-Sync will initially receive a
51% equity interest in the JV and the JV will assume substantially all of the
liabilities of E-Sync arising from and after the closing associated with the
ESNI Contributed Assets. CRC will receive a 49% equity interest in the JV in
exchange for the contribution of the CRC Contributed Assets and the assumption
by the JV of all of the liabilities relating thereto arising from and after the
closing. The Agreement, including the exhibits thereto, is filed herewith as
Exhibit 2.1 and is incorporated by reference herein.
In addition to the consideration set forth above, CRC will make available
to E-Sync a $2 million revolving loan commitment (any such loans made thereby,
the "Loans"), of which $250,000 was borrowed by E-Sync on June 14, 2001 (the
"June Note") and $250,000 was borrowed on August 7, 2001 (the "August Note", and
together with the June Note, the "Notes"). The Notes are filed herewith as
Exhibits 2.2 and 2.3 and are incorporated by reference herein. Pursuant to that
certain Waiver of Maturity Date filed herewith as Exhibit 2.4 and incorporated
by reference herein, CRC agreed, subject to the continuing satisfaction by
E-Sync of certain conditions set forth therein, to extend the maturity date of
the June Note from September 12, 2001 until at least October 15, 2001. As
additional consideration for entering into the Proposed Transaction, E-Sync will
grant CRC a warrant to acquire up to 10% of E-Sync's capital stock on a fully
diluted basis determined as of the close of business on the closing date of the
Proposed Transaction. The exercise price for such warrants will be at a discount
to market. E-Sync will grant registration rights to CRC at the closing in
connection with the issuance of the warrant.
In connection with the borrowing made on August 7, 2001, E-Sync and CRC
entered into an Amended and Restated Pledge and Security Agreement (the
"Security Agreement"), pursuant to which the Loans, along with all other
liabilities of E-Sync to CRC, are secured by all of the assets of E-Sync. The
Security Agreement is filed herewith as Exhibit 2.5 and is incorporated by
reference herein.
Subject to certain exceptions, in the event that the Proposed Transaction
does not close by December 31, 2001, E-Sync would owe a break-up fee to CRC of
$500,000.
The joint press release issued by E-Sync and CRC with respect to the
foregoing is filed herewith as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
2.1 Contribution Agreement dated as of August 6, 2001 by and between E-Sync
Networks, Inc. and CRC, Inc.
2.2 Secured Promissory Note dated June 14, 2001 made by E-Sync Networks, Inc. in
favor of CRC, Inc.
2.3 Secured Promissory Note dated August 7, 2001 made by E-Sync Networks, Inc.
in favor of CRC, Inc.
2.4 Waiver of Maturity Date dated August 6, 2001 made by CRC, Inc. in favor of
E-Sync Networks, Inc.
2.5 Amended and Restated Pledge and Security Agreement dated as of August 6,
2001 by and between E-Sync Networks, Inc. and CRC, Inc.
99.1 Joint Press Release issued by E-Sync Networks, Inc. and CRC, Inc. on August
6, 2001.
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.
E-SYNC NETWORKS, INC.
Date: August 10, 2001 By: /s/ Michael A. Clark
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Michael A. Clark
President & COO