VRSN » Topics » Item 1.01 Entry into a Material Definitive Agreement.

This excerpt taken from the VRSN 8-K filed Aug 26, 2009.

Item 1.01 Entry into a Material Definitive Agreement.

On August 24, 2009, VeriSign, Inc. (the “Company”) and certain of its foreign subsidiaries entered into an acquisition agreement (the “Agreement”) with Syniverse Holdings, Inc., a Delaware corporation (the “Purchaser”) for the sale of the Company’s Inter-Carrier Gateway, Premium Messaging Gateway, PictureMail/Integrated Multimedia Message Service (“MMS”) and Mobile Enterprise Solutions businesses (collectively, the “VM3 Business”) for a purchase price of $175.0 million, subject to certain adjustments to reflect fluctuations in working capital. The VM3 Business provides short message service and MMS delivery across various networks, managed infrastructure services for wireless service providers, end-to-end MMS infrastructure and applications to Tier-1 and Tier-2 mobile operators and messaging services through a standard rated messaging aggregation platform. Closing of the transaction is conditioned on the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.

Pursuant to the Agreement, the Purchaser will acquire substantially all of the assets associated with the VM3 Business, including (i) all of the equity interests owned by the Company in VeriSign ICX Corporation, a Delaware corporation and wholly-owned subsidiary of the Company, which owns a substantial portion of the VM3 Business assets and (ii) certain other assets including (a) certain contracts related to the VM3 Business, (b) certain accounts receivable and prepaid expenses of the VM3 Business, (c) certain office furniture, computers, servers and other equipment, (d) ownership of or the right to use certain intellectual property required for the conduct of the VM3 Business, (e) certain claims, causes of action and rights relating to the VM3 Business accruing after the closing of the sale and (f) all of the Company’s goodwill in the VM3 Business as a going concern. The Purchaser will also hire certain employees of the Company who are currently employed in the VM3 Business.

The Purchaser will not acquire the right to use “VeriSign” or any other trademarks, trade names, logos or other service marks of VeriSign, Inc. or its retained subsidiaries. Agreements for the transfer of foreign assets of the VM3 Business may be entered into where advisable or required under the law of foreign jurisdictions. The Purchaser generally will assume only those liabilities associated with the VM3 Business that arise after the closing. The Company generally will retain all other liabilities, including all liabilities (pre- and post-closing) arising from litigation associated with the Company’s MDG business (mQube, Inc.), which is not included in the VM3 Business, and certain pre- and post-closing liabilities arising from specified infringement actions pending against the PictureMail component of the VM3 Business.

Both the Company and the Purchaser have agreed to indemnify the other party against certain losses, subject to certain limitations. The Company has agreed not to compete with the Purchaser in the VM3 Business until June 30, 2013, and has agreed not to solicit former employees of the divested business (with certain limited exceptions) for a period of one year from closing. Simultaneously with the closing of the sale, the Company expects to enter into a Transition Services Agreement with the Purchaser; the Company does not consider the Transition Services Agreement to be independently material.

The Agreement also contains customary termination rights. These include, subject to certain conditions, termination by (i) mutual consent of the Company and the Purchaser; (ii) either party if the transaction has not closed by June 30, 2010, subject to an extension to October 31, 2010 that may be required by either party if required regulatory approvals have not been obtained by June 30, 2010; and (iii) either party if the conditions to such party’s obligation to complete the transaction become incapable of satisfaction. If the transaction is terminated by the Purchaser or the Company in certain circumstances, the Purchaser is required to pay the Company a termination fee.

A copy of the press release announcing the agreement by the Company to sell the VM3 Business to the Purchaser is attached hereto as Exhibit 99.1.

 

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This excerpt taken from the VRSN 8-K filed Sep 6, 2007.

Item 1.01. Entry into a Material Definitive Agreement.

A copy of the Indenture and Registration Rights Agreement is attached hereto as Exhibits 4.1 and 4.2, respectively and are incorporated herein by reference. The descriptions of the Debentures contained in the Form 8-K are qualified in their entirety by reference to the Indenture.

This excerpt taken from the VRSN 8-K filed Feb 2, 2007.

Item 1.01. Entry into a Material Definitive Agreement.

On January 29, 2007, VeriSign, Inc. (“VeriSign”) and Fox Entertainment (“Fox”), a subsidiary of News Corporation, and various subsidiaries of VeriSign and Fox, entered into a formation agreement under which VeriSign contributed its Jamba “business to consumer” business and Fox contributed its Fox Mobile Entertainment assets to two joint ventures to provide mobile entertainment to consumers on a global basis. One of the joint ventures is based in the Netherlands, and the other is based in the United States. Under the formation agreement, Fox paid VeriSign approximately $187.5 million in cash. Each party made a variety of customary representations and warranties regarding the assets contributed to the joint venture and agreed to indemnify the joint ventures for a breach of these representations and warranties, subject to limitations. These representations and warranties will survive for a period of 18 months, subject to certain exceptions.

VeriSign and Fox also entered into a joint venture agreement on January 31, 2007. Under the agreement, Fox (through a subsidiary) will own a 51 percent interest in the joint venture, Netherlands Mobile Holdings, C.V., and VeriSign (through a subsidiary) will own a 49 percent interest in the joint venture. The parties entered into a substantially similar joint venture agreement with respect to the U.S. based mobile entertainment business; however, that agreement is not currently considered a material agreement for VeriSign. Fox is entitled to appoint four of the seven members of the board of managers of the joint venture, and VeriSign is entitled to appoint the remaining three members. The parties also agreed to make capital contributions to the joint venture to fund the operations of venture, subject to certain conditions. VeriSign is not required to contribute more than $49 million to this joint venture and the separate U.S. joint venture. Fox may purchase the remaining interest of VeriSign in the joint venture (and the U.S.-based joint venture) or VeriSign can require Fox to purchase VeriSign’s remaining interest in the joint venture (and the U.S.-based joint venture) at varying amounts of consideration at specified times over the course of a five year period, including upon a change in control of VeriSign. The price for these options is pre-determined, except that in the case of certain call rights of Fox, the purchase price will be the greater of the pre-determined amount or the fair market value of VeriSign’s joint venture interests.

VeriSign also agreed not to operate or engage in any direct to consumer mobile business substantially similar to the businesses currently conducted by the businesses being contributed to the joint ventures, provided, however, that VeriSign is permitted to conduct a “business to business” and certain other activities described in the agreement.

This excerpt taken from the VRSN 8-K filed Dec 5, 2006.

Item 1.01. Entry into a Material Definitive Agreement.

On November 30, 2006, VeriSign, Inc. (“VeriSign”) announced that on November 29, 2006 it had received notification that the U.S. Department of Commerce has approved the Registry Agreement (the “2006 .com Registry Agreement”), between Internet Corporation for Assigned Names and Numbers (“ICANN”) and VeriSign.

The 2006 .com Registry Agreement provides that VeriSign will continue to be the sole registry operator for domain names in the .com top-level domain through the term of the agreement. VeriSign will be entitled to charge a maximum fee of $6.00 for specified registry services, and the fees may be increased by up to 7% in four years of any six year term of the 2006 .com Registry Agreement. VeriSign is also required to make a payment of $625,000 to ICANN, as well as quarterly payments of $1.5 million and increasing to $3.0 million (subject to adjustment based on the number of annual domain name registrations) for fixed registry-level fees.

VeriSign is required to comply with and implement temporary specifications or policies and consensus policies, as well as other provisions in the 2006 .com Registry Agreement relating to handling of data and other registry operations. The 2006 .com Registry Agreement also provides a procedure for VeriSign to propose and ICANN to review and approve additional registry services.

The expiration date of the 2006 .com Registry Agreement is November 30, 2012. The 2006 .com Registry Agreement provides that it shall be renewed unless it has been determined that VeriSign has been in fundamental and material breach of certain provisions of the 2006 .com Registry Agreement and has failed to cure such breach. The U.S. Department of Commerce shall approve such renewal if it concludes that it is in the public interest in the continued security and stability of the domain name system and the provision of registry services offered on reasonable terms.

In connection with the approval by the U.S. Department of Commerce of the 2006 .com Registry Agreement, VeriSign and the Department of Commerce entered into Amendment No. Thirty (30) to Cooperative Agreement—Special Awards Conditions NCR-92-18742 between VeriSign and the Department of Commerce (the “Amendment”). The Amendment provides that the term of VeriSign’s existing Cooperative Agreement (the “Cooperative Agreement”) shall extend through November 30, 2012. The Amendment provides that any renewal or extension of the 2006 .com Registry Agreement is subject to prior written approval by the Department of Commerce.

This excerpt taken from the VRSN 8-K filed Nov 6, 2006.

Item 1.01. Entry into a Material Definitive Agreement.

On October 31, 2006, VeriSign, Inc. (“VeriSign”) entered into a Severance and General Release Agreement (the “Agreement”) with Vernon Irvin, Executive Vice President of VeriSign Communications Services.

In consideration of Mr. Irvin’s service with the Company and in exchange for Mr. Irvin’s release of claims and covenant not to sue, the Company will pay Mr. Irvin a severance payment in the total amount of $683,520.00, 67% of which will be paid within one month of the date Mr. Irvin executes the Agreement and the other 33% of which will be paid on the one year anniversary of the termination of his employment, subject to Mr. Irvin’s compliance with non-solicitation and non-competition provisions. The Company will also pay Mr. Irvin up to approximately $215,000, representing 84% of his 2006 target bonus based on the performance of both the Company and VeriSign Communications Services. The payment of the 2006 bonus will be made at the time that VeriSign issues annual bonuses to its employees, which typically occurs in March. The Company will also make payments to Mr. Irvin for his COBRA and life insurance premiums, and will also provide certain administrative and other support as set forth in the Agreement.

Upon termination of Mr. Irvin’s employment with VeriSign and subject to compliance with applicable law and any stock option exercise limitation imposed by the Board of Directors, VeriSign will accelerate vesting of twenty-five percent (25%) of Mr. Irvin’s then unvested stock options to purchase shares of VeriSign common stock for which the fair market value is greater than the exercise price of his employment on the termination date. Also upon termination of Mr. Irvin’s employment, and subject to compliance with applicable law, VeriSign will accelerate vesting of twenty-five percent (25%) of his then unvested restricted stock units of VeriSign common stock.

The foregoing is a summary of the terms and conditions of the Agreement and does not purport to be complete. The foregoing is qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 99.01 to this Current Report on Form 8-K and is incorporated herein by reference.

This excerpt taken from the VRSN 8-K filed Jun 7, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

On June 7, 2006, VeriSign, Inc. (“VeriSign”) entered into a Credit Agreement (the “Credit Agreement”) among VeriSign, Bank of America, N.A., as Administrative Agent (the “Administrative Agent”), Swing Line Lender and L/C Issuer, the other lenders party thereto (the “Lenders”), Citicorp USA, Inc., as Syndication Agent, JPMorgan Chase Bank, N.A., KeyBank National Association and U.S. Bank National Association, as Co-Documentation Agents, and Banc of America Securities LLC and Citigroup Global Markets Inc., as joint lead arrangers and joint book running managers.

The Credit Agreement provides for a $500 million senior unsecured revolving credit facility (the “Facility”), under which VeriSign, or certain designated subsidiaries may be borrowers. The Facility includes (1) a $50 million sublimit for the issuance of standby letters of credit for the account of VeriSign to support its obligations or obligations of its subsidiaries, (2) a $50 million sublimit for swing line loans to VeriSign, (3) a $100 million sublimit for multicurrency borrowings, and (4) a $100 million sublimit for loans to certain non-U.S. wholly-owned subsidiaries of VeriSign. VeriSign also has the option to invite Lenders to bid for loans with maturities ranging from one to six months, in the case of LIBOR Rate Loans (defined below), and 14 to 180 days in the case of Base Rate Loans (defined below), for requested amounts, up to $100 million in the aggregate (“Competitive Bid Loans”). At the closing, $174 million of the Facility was used to refinance VeriSign’s borrowings under a credit agreement that expires on July 10, 2006. The remainder of the Facility was undrawn at the closing. Any other borrowings under the Facility will be used for working capital, capital expenditures, permitted acquisitions and repurchases of VeriSign’s common stock and other lawful corporate purposes.

Loans bear interest at a rate per annum equal to, at the election of VeriSign, (i) the Adjusted LIBOR Rate, plus a margin of between 0.50% and 1.025% (“LIBOR Rate Loans”), depending on VeriSign’s ratio of funded indebtedness to EBITDA as calculated pursuant to the Credit Agreement (the “Leverage Ratio”), or (ii) the higher of (A) the prime rate, as announced from time to time by Bank of America, N.A., and (B) the Federal Funds rate plus 0.50% (“Base Rate Loans”). VeriSign is required to pay the Lenders under the revolving credit facility a commitment fee at a rate per annum of between 0.125% and 0.225%, depending on the Leverage Ratio, payable quarterly in arrears.

The revolving credit facility terminates on June 7, 2011 at which time outstanding borrowings under the revolving credit facility are due. VeriSign may optionally prepay loans under the Credit Agreement other than Competitive Bid Loans at any time, without penalty, subject to reimbursement of certain costs in the case of LIBOR borrowings.

The Credit Agreement contains customary representations and warranties, as well as affirmative and negative covenants. Affirmative covenants include, among others, financial and other reporting, maintenance of existence, payment of obligations, maintenance of properties, maintenance of insurance, compliance with laws, maintenance of books and records, maintenance of approvals and authorizations, and an agreement to cause future material domestic subsidiaries to become parties to the Subsidiary Guaranty referred to below. Negative covenants include, among others, limitations on incurrence of liens, limitations on investments, limitations on incurrence of additional indebtedness, limitations on mergers and acquisitions, limitations on asset sales, limitations on dividends, share redemptions and other restricted payments, limitations on changing its business, limitations on entering into certain types of burdensome agreements and limitations on transactions with affiliates. The Credit Agreement includes two financial covenants: (1) that VeriSign not permit the ratio of consolidated EBITDA to consolidated interest charges for any four fiscal quarters to be less than 2.50:1.00, and (2) that VeriSign not permit the Leverage Ratio to exceed 3.00: 1.00 at any time during any period of four fiscal quarters.

The Credit Agreement contains customary events of default, including among others, non payment of principal, interest or other amounts when due, inaccuracy of representations and warranties, violation of covenants, cross defaults with certain other indebtedness, certain undischarged judgments, bankruptcy, insolvency or inability to pay debts, the occurrence of certain ERISA events, or a Change of Control (as defined in the Credit Agreement). Upon the occurrence and during the continuance of an event of default under the Credit Agreement, the Lenders may declare the loans and all other obligations under the Credit Agreement immediately due and payable. A bankruptcy event of default causes such obligations automatically to become immediately due and payable.

The obligations of VeriSign under the Credit Agreement are guaranteed by the material U.S. subsidiaries of VeriSign pursuant to a Subsidiary Guaranty, dated June 7, 2006 (the “Guaranty Agreement”). The obligations of any subsidiaries that become borrowers under the Credit Agreement are guaranteed by VeriSign pursuant to a Company Guaranty, dated June 7, 2006 made by VeriSign in favor of the Administrative Agent and the Lenders.

The descriptions of the Credit Agreement, the Subsidiary Guaranty and the Company Guaranty contained herein are qualified in their entirety by reference to those agreements, copies of which are filed herewith as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference.


This excerpt taken from the VRSN 8-K filed Jan 5, 2006.

Item 1.01. Entry into a Material Definitive Agreement.

 

On December 29, 2005, the Board of Directors of VeriSign, Inc. (“VeriSign” or the “Company”) approved the acceleration of the vesting of unvested and “out-of-the-money” stock options that had an exercise price per share in excess of $24.99, all of which were previously granted under VeriSign’s stock option plans and that were outstanding on December 29, 2005. Options to purchase approximately 8.8 million shares of common stock or 47% of our total outstanding unvested options on December 29, 2005 were subject to the acceleration. The options accelerated included certain options previously granted to executive officers and directors of VeriSign.

 

The purpose of the acceleration was to enable the Company to avoid recognizing compensation expense associated with these options in future periods in its Consolidated Statements of Operations pursuant to Financial Accounting Standards Board Statement No. 123(R) (FAS No. 123(R)). Under FAS No. 123(R), the Company will apply the expense recognition provisions relating to stock options beginning in the first quarter of fiscal 2006. In approving the acceleration, the Board considered the anticipated effect on the Company’s financial results, stockholder value and employee morale and retention. VeriSign believes that the acceleration is in the best interest of stockholders as it will reduce the Company’s reported compensation expense beginning in 2006 under FAS No. 123(R). As a result of the acceleration, VeriSign expects to reduce the stock option expense it otherwise would have been required to record by approximately $27.7 million in 2006. The acceleration of the vesting of these options will not result in a charge to our expenses in 2005. It is possible that changes in the interpretations of existing accounting standards or the adoption of new accounting standards could cause the ultimate accounting of the Company’s options to vary from the Company’s current expectations.

 

In addition, the acceleration was accompanied by restrictions imposed on any shares purchased through the exercise of accelerated options. Those restrictions will prevent the sale of any such shares prior to the date such shares would have originally vested had the optionee been employed on such date (whether or not the optionee is actually an employee at that time).


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.

 

    VERISIGN, INC.
Date: January 5, 2006   By:  

/s/ James M. Ulam


        James M. Ulam
        Senior Vice President,
        General Counsel and Secretary
This excerpt taken from the VRSN 8-K filed Nov 21, 2005.

Item 1.01. Entry into a Material Definitive Agreement.

 

On November 18, 2005, VeriSign, Inc. (“VeriSign” or the “Company”) entered into a $250 million accelerated share repurchase (“ASR”) agreement with Morgan Stanley & Co. Incorporated (“MSCO”). Under the ASR agreement, the Company purchased 10.8 million shares of its common stock at a price per share of approximately $23.14. VeriSign acquired these shares as part of its previously announced program to repurchase up to $500 million of the Company’s common stock in open market, negotiated or block transactions.

 

Under the ASR agreement, MSCO plans to purchase an equivalent number of shares of common stock in the open market from time to time until it has acquired that number. At the end of this period, the Company may receive, or may be required to remit, a price adjustment based upon the volume weighted average price of its common shares during the period. The purchase price adjustment can be settled, at the election of the Company, in cash or in shares of its common stock. The program is subject to a cap that will establish the maximum price per share.

 

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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.

 

    VERISIGN, INC.
Date: November 21, 2005   By:  

/s/ James M. Ulam


        James M. Ulam
       

Senior Vice President,

    General Counsel and Secretary

 

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This excerpt taken from the VRSN 8-K filed Oct 14, 2005.

Item 1.01. Entry into a Material Definitive Agreement.

 

On October 10, 2005, VeriSign, Inc., entered into an Asset Purchase Agreement (the “Agreement”) with PayPal, Inc., PayPal International Limited (collectively, the “Purchasers”) and eBay Inc. Under the terms of the Agreement, VeriSign has agreed to sell to the Purchasers certain assets related to VeriSign’s payment gateway business and the Purchasers will assume certain liabilities related thereto for approximately $370 million, payable in cash and/or eBay common stock (the “Transaction”). After December 1, 2005, subject to certain conditions, the Purchasers may elect to have eBay issue shares of its common stock to VeriSign in lieu of all or any portion of the $370 million payment. The parties will indemnify each other for breaches of representations, warranties, covenants and other liabilities under certain circumstances, subject to limitations, as provided in the agreement. The consummation of the transaction is subject to certain closing conditions, including the termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

A copy of the press release issued by VeriSign on October 10, 2005 announcing the above-mentioned transaction is incorporated herein by reference and filed as Exhibit 99.1.

 

This excerpt taken from the VRSN 8-K filed Jan 13, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On January 10, 2005, VeriSign, Inc. signed a definitive agreement to acquire LightSurf Technologies, Inc. (“LightSurf”). Under the terms of the agreement, VeriSign agreed to issue shares of its Common Stock having a value of approximately $270 million for all of the outstanding capital stock, warrants and vested options of LightSurf and to pay certain transaction-related expenses of LightSurf. In addition, VeriSign will assume all unvested stock options of LightSurf. Of the consideration to be received by stockholders of LightSurf, 15% will be held in escrow for a period of one year to satisfy certain indemnification obligations. VeriSign will also be entitled to make claims for indemnification for certain matters related to intellectual property, tax and capitalization subsequent to the escrow period.

 

The transaction is subject to certain closing conditions, including termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the issuance of a permit from the California Department of Corporations. The transaction is anticipated to close by the end of the first quarter of 2005.


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.

 

   

VERISIGN, INC.

Date: January 12, 2005

 

By:

 

/s/ James M. Ulam


       

James M. Ulam

       

Senior Vice President,

       

    General Counsel and Secretary

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