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Section 1: 8-K (8-K)

8-K
J2 GLOBAL, INC. false 0001084048 0001084048 2019-08-16 2019-08-16

 

 

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

Date of Report (Date of earliest event reported): August 16, 2019

 

j2 Global, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

0-25965

 

47-1053457

(State or other jurisdiction of
incorporation or organization)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

6922 Hollywood Blvd.

Suite 500

Los Angeles, California 90028

(Address of principal executive offices)

(323) 860-9200

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.01 par value

 

JCOM

 

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


ITEM 1.01 Entry into a Material Definitive Agreement

On August 16, 2019, j2 Cloud Services, LLC (“j2 Cloud”), a wholly-owned subsidiary of j2 Global, Inc., and MUFG Union Bank, N.A. (“MUB”) entered into an amendment with respect to j2 Cloud’s existing credit agreement, dated as of January 7, 2019, by and between j2 Cloud, certain lenders from time to time party thereto and MUB, as sole lead arranger and as administrative agent for the Lenders (the “Amendment” and the credit agreement, as amended by the First Amendment to Credit Agreement, dated as of July 1, 2019, and the Amendment, the “Credit Agreement”).

Among other things, the Amendment increased the aggregate amount available under the Credit Agreement from $150,000,000 to $200,000,000 through December 31, 2020.

The foregoing descriptions of the Amendment and the Credit Agreement are not complete and are qualified in their entirety by reference to the Amendment attached as Exhibit 10.1 to this Current Report on Form 8-K, the First Amendment to Credit Agreement attached as Exhibit 10.1 to the Current Report on Form 8-K filed on July 1, 2019, and the Credit Agreement attached as Exhibit 10.1 to the Current Report on Form 8-K filed on January 9, 2019, which are incorporated herein by reference.

ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

ITEM 9.01 Financial Statements and Exhibits

(d) Exhibits.

Exhibit

Number

   

Description

         
 

10.1

   

Second Amendment to Credit Agreement, dated as of August 16, 2019, among j2 Cloud Services, LLC, the lenders from time to time party thereto and MUFG Union Bank, N.A., as sole lead arranger and as Agent

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

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.

 

 

j2 Global, Inc.

             

Date: August 16, 2019

 

 

By:

 

/s/ Jeremy Rossen

 

 

Name:

 

Jeremy Rossen

 

 

Title:

 

Vice President and General Counsel

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Section 2: EX-10.1 (EX-10.1)

EX-10.1

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of August 16, 2019, is entered into among j2 CLOUD SERVICES, LLC, a Delaware limited liability company (the “Borrower”), (2) the several banks and other lenders from time to time parties to this Agreement (the “Lenders”) and (3) MUFG UNION BANK, N.A. (“MUB”), as administrative agent for the Lenders (in such capacity, the “Agent”).

RECITALS

The Borrower, the Lenders and the Agent are party to that certain Credit Agreement dated as of January 7, 2019 (as amended, restated, modified or supplemented from time to time, the “Credit Agreement”), pursuant to which the Lenders made available to the Borrower a revolving loan facility in the maximum principal amount of $150,000,000 (the “Aggregate Revolving Loan Commitment”). The Borrower has requested that the Lenders increase Aggregate Revolving Loan Commitment to $200,000,000, and the Lenders have agreed, subject to the terms and conditions set forth in this Amendment.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.    Incorporation by Reference. The parties acknowledge the accuracy of the foregoing Recitals which are incorporated by reference herein and are made a part of this Amendment.

SECTION 2.    Amendments to Credit Agreement. Effective as of the date Second Amendment Effective Date (as defined below), the Credit Agreement is hereby amended as follows:

(a)    On the cover page of the Credit Agreement, the reference to “$150,000,000 Revolving Credit Facility” is changed to “$200,000,000 Revolving Credit Facility”.

(b)    Section 1.1 of the Credit Agreement is hereby amended by adding the following definitions thereto in appropriate alphabetical order:

Commitment Step-Down Date” means December 31, 2020.

Second Amendment” means that certain Second Amendment to Credit Agreement dated as of August 16, 2019 (as amended, restated, modified or supplemented from time to time) by and among the Borrower, the Lenders and the Agent.

Second Amendment Effective Date” has the meaning ascribed thereto in the Second Amendment.


(c)    Section 2.1 of the Credit Agreement is hereby amended by adding the following subsection (h) at the end of such Section:

“(h)     Immediately after the Commitment Step-Down Date, the Aggregate Revolving Loan Commitment shall not exceed $150,000,000.”

(d)    Section 2.4 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

2.4    Mandatory Prepayment. If at any time (including, without limitation, upon the Commitment Step-Down Date) the sum of (A) the aggregate principal amount of all Revolving Loans outstanding, (B) the aggregate Letter of Credit Amount of all Letters of Credit outstanding, (C) the aggregate amount of unreimbursed drawings under all Letters of Credit, and (D) the aggregate principal amount of all Swing Line Loans outstanding, exceeds the Aggregate Revolving Loan Commitment, then the Borrower shall immediately, without notice or request by the Agent, prepay the Revolving Loans and/or make a Cash Collateral Deposit with respect to Letters of Credit in an aggregate amount equal to such excess.

(e)    Section 2.22(a) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“(a)    The Borrower may, by written notice to the Agent (each, a “Commitment Increase Notice”), at any time prior to the Revolving Loan Commitment Expiration Date, request increases of the Aggregate Revolving Loan Commitment (a “Revolving Commitment Increase”); provided that (i) the Aggregate Revolving Loan Commitment after giving effect to the Revolving Commitment Increase shall not exceed (x) for the period commencing on the Second Amendment Effective Date and ending on the Commitment Step-Down Date, $200,000,000 and (y) thereafter, $150,000,000 (the “Maximum Commitment Amount”); (ii) the Borrower may exercise such increase request option up to three times during the term of this Agreement; (iii) each exercise of the increase request option shall be in a minimum principal amount of not less than $10,000,000; provided that the exercise of such increase request option may be less than $10,000,000 if the unused portion of the Maximum Commitment Amount is less than $10,000,000, so long as the request is for the full amount of the remaining Maximum Commitment Amount, and (iv) after giving effect to such Revolving Commitment Increase, calculated on a pro forma basis, no Default or Event of Default has occurred and is continuing or would be caused by the consummation of such Revolving Commitment Increase.”

(f)    Schedule A to the Credit Agreement is replaced with Annex A hereto.

SECTION 3.    Conditions Precedent. This Amendment shall become effective (the “Second Amendment Effective Date”) upon receipt by the Agent of the following conditions precedent, in each case in form and substance satisfactory to the Agent:

(a)    this Amendment, duly executed by the Borrower, the Lenders and the Agent;

 

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(b)    a second amended and restated Fee Letter (the “Restated Fee Letter”), duly executed by the Borrower and the Agent;

(c)    a Consent and Reaffirmation in the form attached hereto as Exhibit A, duly executed by each Guarantor;

(d)    resolutions of the board of managers, or similar governing body, of the Borrower authorizing this Amendment and the Restated Fee Letter, certified by a Responsible Officer of the Borrower as of the Second Amendment Effective Date, which certificate states that the resolutions thereby certified have not been amended, modified, revoked or rescinded and are in full force and effect; and

(e)    payment or evidence of payment by the Borrower of the amount set forth in the Restated Fee Letter, and all costs and expenses, including fees of the Agent’s counsel to the extent required to be reimbursed pursuant to Section 9.5 of the Credit Agreement and invoiced prior to the Second Amendment Effective Date.

SECTION 4.    Reference to and Effect on the Credit Agreement and the Other Loan Documents.

(a)    Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement,” “thereunder,” “thereof,” “therein” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended hereby.

(b)    Except as specifically amended herein, the Credit Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.

(c)    The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent or the Lenders under the Credit Agreement or any other Loan Documents, nor constitute a waiver of any provision of the Credit Agreement or any other Loan Documents.

SECTION 5.    Representations and Warranties. The Borrower represents and warrants, for the benefit of the Lenders and the Agent, as follows: (i) the Borrower has the limited liability company power and authority, to execute, deliver and perform this Amendment, and to perform the Credit Agreement as amended hereby; (ii) all actions, waivers and consents (corporate, regulatory and otherwise) necessary or appropriate for it to execute, deliver and perform this Amendment, and to perform the Credit Agreement as amended hereby, have been taken and/or received; (iii) this Amendment, and the Credit Agreement, as amended by this Amendment, constitute, a legal, valid and binding obligation of each of the Loan Parties (to the extent such Loan Party is a party thereto) enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law); (iv) the execution, delivery and performance of this Amendment, and the performance of the Credit Agreement, as amended hereby, will not (a) violate any Requirement of Law applicable to any of the Loan

 

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Parties or material Contractual Obligation of any of the Loan Parties, and (b) will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues pursuant to any such Requirement of Law or such material Contractual Obligation, in each case in clauses (a) and (b), except as would not reasonably be expected to have a Material Adverse Effect; (v) the representations and warranties contained in this Amendment, the Credit Agreement, each other Loan Document and each certificate or other writing delivered by the Borrower and any Subsidiary to the Agent in connection herewith or therewith are correct on and as of date hereof in all material respects (except for those representations and warranties that are conditioned by materiality, which shall be true and correct in all respects) as though made on the date hereof except (i) to the extent that such representations and warranties expressly relate to an earlier date and (ii) the representations and warranties made under Section 3.1 of the Credit Agreement shall be deemed to refer to the most recent financial statements of the Borrower furnished to the Agent pursuant to Section 5.1 of the Credit Agreement; and (vi) after giving effect to this Amendment and any borrowings made on the Second Amendment Effective Date, no Default or Event of Default has occurred and is continuing.

SECTION 6.    Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment electronically shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 7.    Governing Law. This Amendment and the rights and obligations of the parties under this Amendment shall be governed by, and construed and interpreted in accordance with, the law of the State of California (without reference to its choice of law rules).

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

 

j2 CLOUD SERVICES, LLC,

a Delaware limited liability company

By:  

/s/ Steve P. Dunn

Name:   Steve P. Dunn
Title:   Chief Accounting Officer
[signatures continue on next page]

 

[Signature Page to Second Amendment to Credit Agreement]


[signatures continued from previous page]
MUFG UNION BANK, N.A., as Agent
By:  

/s/ Westley White

Name:   Westley White
Title:   Director

MUFG UNION BANK, N.A., as Lender,

Issuing Bank and Swing Line Lender

By:  

/s/ Westley White

Name:   Westley White
Title:   Director

 

[Signature Page to Second Amendment to Credit Agreement]

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