-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DBY7D0TdmoH3F2fPxSYIPSzVcXiGwlJmla5fZr550d5HvsGGDIUwFGHH0s1XcV2r 61UgeWl+i6G9k/J7ul5Zhw== 0000950149-01-501754.txt : 20020410 0000950149-01-501754.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950149-01-501754 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011108 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRITICAL PATH INC CENTRAL INDEX KEY: 0001060801 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 911788300 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25331 FILM NUMBER: 1785025 BUSINESS ADDRESS: STREET 1: 320 FIRST STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 4158088800 MAIL ADDRESS: STREET 1: 320 FIRST STREET CITY: SAN FRNACISCO STATE: CA ZIP: 94105 8-K 1 f77097e8-k.txt CURRENT REPORT UNITED STATES 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 NOVEMBER 8, 2001 ---------------- DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) CRITICAL PATH, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) CALIFORNIA 000-25331 91-1788300 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 532 FOLSOM STREET, SAN FRANCISCO, CALIFORNIA 94105 - -------------------------------------------------------------------------------- (Address of principal executive offices) (415) 808-8800 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) -more- ITEM 5. OTHER EVENTS. (a) On Thursday, November 8, 2001, the Company announced that it signed binding memoranda of understanding with respect to the settlement of securities class action and shareholder derivative litigation pending against it in the U.S. District Court for the Northern District of California. A copy of the Company's Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K. (b) On Friday, November 9, 2001, the Company announced the closing of a $95 million financing transaction from a group of investors and their affiliate entities ("Buyers"). The financing transaction consists of $30 million in new equity in the form of shares of Series D Cumulative Redeemable Convertible Participating Preferred Stock ("Preferred Stock") at a conversion price per share (into common stock) of $1.05, the retirement of $65 million in face value of the Company's 5-3/4% Convertible Subordinated Notes (the "Notes") held by General Atlantic Partners LLC and affiliates ("GA"), and the issuance to GA of warrants to purchase 2.5 million shares of common stock (the "Warrants"). In the transaction, the Company issued and sold (subject to the escrow described below) approximately 4 million shares of Preferred Stock (convertible into approximately 52.4 million shares of the Company's common stock) to a group of investors led by GA and including Cheung Kong Limited and affiliates, Hutchison Whampoa Limited and Vectis Group LLC. In addition, a portion of GA's equity in the transaction (representing 6.2% of the ownership of the Company, on a pro forma basis after giving effect to the transaction and the conversion of the shares into common stock) has been placed in a separate escrow to be released to GA only upon either the approval by the shareholders by a majority vote or approval by the Nasdaq Stock Market. As previously announced, the Company has executed binding memoranda of understanding to settle shareholder and derivative litigation pending in the U.S. District Court for the Northern District of California. The receipt by the Company of all financing proceeds from escrow is contingent upon the execution of final settlement agreements in that litigation. The Preferred Stock shall accrue and cumulate dividends at eight percent (8%) per year, and is convertible into the Company's Common Stock at the option of the holder. The conversion rights of the Preferred Stock do not include any Common Stock trading price-related anti-dilution adjustments. Rather, the only anti-dilution protection for the Preferred Stock is customary anti-dilution protection in the event of stock splits, stock dividends, reorganizations or the like. In the event of a liquidation or change of control of the Company, the Preferred Stock is entitled to a liquidation preference payment equal to the purchase price of the Preferred Stock, plus accrued dividends to such date. The Preferred Stock shall also participate with the Common Stock in the event of a liquidation or change of control, after payment of the foregoing preference, up to certain agreed upon amounts. After four years, the Company has the option to redeem the Preferred Stock if the Common Stock trading price at such time is in excess of certain agreed upon price levels. After five years, the Preferred Stock shall be automatically redeemed. GA, as lead investor, is entitled to elect one person to the Company's Board of Directors. The Board size shall also increase to seven (7) directors from the current five (5). The Preferred Stock also has certain voting rights in connection with major corporate events, as well as preemptive rights in connection with any future Company private placements. The Buyers have also executed a seven (7) year standstill agreement with the Company. The offer and sale of these securities in the United States was completed pursuant to the exemption from registration under the Securities Act of 1933. In addition to the Preferred Stock and the Warrants, and in connection with the investment, the Company and the Buyers have entered into a Stock and Warrant Purchase and Exchange Agreement, an Escrow Agreement, a Stockholders Agreement and a Registration Rights Agreement (these documents, together with a Certificate of Designation, are referred to collectively herein as the "Transaction Documents"). The Warrants are fully-vested and exercisable at any time after November 8, 2002 until November 7, 2006. The exercise price for the Common Stock underlying the Warrants is $1.05 with a four (4) year term. Pursuant to the Registration Rights Agreement, the Company has granted demand registration rights to certain of the investors, whereby under enumerated circumstances the Company is obligated to file a registration statement for an underwritten offering with the Securities and Exchange Commission, in addition to the grant of "piggyback" registration rights for other underwritten offerings. In connection with this transaction, the Board of Directors has approved an amendment to the Company's Preferred Stock Rights Agreement, dated as of March 19, 2001 (the "Rights Agreement"), in order to permit the Buyers to Beneficially Own (as such term is defined in the Rights Agreement) additional shares of the Company's Common Stock without triggering the occurrence of a Distribution Date (as such term is defined in the Rights Agreement). The foregoing description of the transaction is only a summary and is qualified in its entirety by reference to the Transaction Documents. The proceeds from this investment will be used for working capital and general corporate purposes. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Not applicable. (b) Not applicable. (c) Exhibits.
EXHIBIT NO. DESCRIPTION ----------- ----------- 99.1 Press Release dated as of November 8, 2001
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CRITICAL PATH, INC. Date: November 12, 2001 /s/ Laureen DeBuono ---------------------------------- Laureen DeBuono Interim Chief Financial Officer INDEX TO EXHIBITS FILED WITH THE CURRENT REPORT ON FORM 8-K DATED NOVEMBER 8, 2001
Exhibit Description ------- ----------- 99.1 Press Release dated as of November 8, 2001
EX-99.1 3 f77097ex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 FOR IMMEDIATE RELEASE CRITICAL PATH ANNOUNCES AGREEMENT TO SETTLE SECURITIES CLASS ACTION LAWSUITS SAN FRANCISCO -- NOV. 8, 2001 -- Critical Path, Inc. (Nasdaq: CPTH), a global technology leader in communication platforms and integrated messaging solutions, announced today that it has reached binding memoranda of understanding to settle shareholder and derivative litigation pending against the Company and several of its former officers and directors in the United States District Court for the Northern District of California. The shareholder litigation settlement provides for a payment of $17.5 million in cash and the issuance by Critical Path of warrants to purchase 850,000 shares of Critical Path common stock at an exercise price of $10.00 per share. The settlement amount will be covered by the Company's liability insurance. In the derivative litigation, settlement provides for certain corporate governance changes and the payment of plaintiffs' attorneys' fees. Under the terms of the settlements, all claims against the Company and all other defendants will be dismissed without admission of liability or wrongdoing by any party. The settlements are subject to negotiation and execution of final settlement documents, notice to class members and shareholders, and review and approval by the court. "This closes an important chapter in Critical Path's history and represents a completed step in our turnaround," said David Hayden, executive chairman of Critical Path. "With these settlements behind us, the Company can focus aggressively on our future and technological leadership in the messaging market." About Critical Path Critical Path, Inc. (Nasdaq: CPTH) is a global leader in communication technology and complete messaging solutions for wireless and wireline carriers, service providers and corporations through its integrated platform of messaging applications and directory infrastructure. Critical Path is headquartered in San Francisco, with offices throughout North America, Europe, Asia and Latin America. More information on Critical Path can be found at http://www.cp.net/. FORWARD-LOOKING STATEMENTS This announcement contains forward-looking statements including statements relating to the proposed settlement of the class action lawsuit and its impact on our financial results and our future strategic plans for our business. Actual results could differ materially from those projected in the forward-looking statements as a result of the following factors, among others: there can be no assurance that the parties in the securities class action lawsuit will be able to reach agreement regarding the final terms of the settlement agreement or that the settlement will be approved by the Court as proposed, or at all. These and other risks and uncertainties are described in more detail in Critical Path's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, as amended, and the quarterly report on Form 10-Q for the quarter ended June 30, 2001, as may be amended from time to time, and all subsequent filings with the Securities and Exchange Commission (www.sec.gov). Note to Editors: Critical Path and the Critical Path logo are the trademarks of Critical Path, Inc. All other trademarks are the property of their holders. CONTACT INFORMATION: For Reporters: For Investors: McGrath Power/PR Critical Path, Inc. Roger Fortier Mike Bishop (408) 727-0351 (415) 344-5059 Rogerf@mcgrathpower.com Mike.bishop@cp.net # # # -----END PRIVACY-ENHANCED MESSAGE-----