<PAGE>
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: May 19, 2000
Sync Research, Inc.
(Exact name of registrant as specified in its charter)
000-26952
(Commission File Number)
DE 33-0676350
(State of other jurisdiction of (I.R.S. Employer Identification No.
incorporation)
12 MORGAN, IRVINE, CALIFORNIA, 92618
(Address of principal executive offices, with zip code)
(949) 588-2070
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
On May 15, 2000, Sync Research, Inc., a Delaware corporation (the
"Company"), announced that it had arranged a private placement (the "Private
Placement") of 700,000 shares of the Company's Series A Preferred Stock, at a
purchase price of $3.19375 per share, for a total of $2.2 million in cash.
The closing of the Private Placement took place on May 12, 2000. The
purchaser was Entrada Holdings LLC ("Entrada"). The Company relied on Rule
506 of Regulation D under the Securities Act of 1933, as amended ( the
"Act"), which, among other things, provides an exemption from the
registration requirements of the Act for sales to accredited investors (as
defined by Rule 501(a) of Regulation D of the Act). The shares of Series A
Preferred Stock are convertible into shares of Common Stock on a one-for-one
basis, and will be automatically converted into shares of Common Stock on the
closing of that certain Agreement and Plan of Merger by and among the
Company, Merger Co, a Delaware corporation and wholly-owned subsidiary of the
Company, Osicom Technologies, Inc., a Delaware corporation ("OSICOM") and
Osicom Technologies, Inc., a New Jersey corporation ("OSICOM NEW JERSEY"),
dated April 10, 2000 (the "OSICOM MERGER AGREEMENT") pursuant to which Merger
Co will merge with and into Osicom and Osicom will become a wholly-owned
subsidiary of the Company (the "OSICOM MERGER"). Entrada may request that the
Company register the shares of Common Stock issuable on the conversion of the
Series A Preferred Stock on a Form S-3 registration statement for resale in
the public market at any time after the earlier of: (i) ninety (90) days
after the closing of the Osicom Merger, or (ii) May 12, 2001. If the Osicom
Merger has not closed by August 31, 2000, Entrada will receive certain
protective provisions, including the right to designate one member to the
Company's board of directors for so long as fifty percent (50%) of the shares
of Series A Preferred Stock are outstanding. In connection with the private
placement, the Company paid a fee equal to five percent (5%) of the aggregate
purchase price to Andersen Weinroth Capital Corp., an investment firm
affiliated with Entrada. An entity affiliated with Entrada is a stockholder
in Osicom New Jersey. The specific terms of the shares of Series A Preferred
Stock sold in the Private Placement are contained in the Stock Purchase
Agreement, Registration Rights Agreement and Certificate of Designation of
Rights, Preferences and Privileges of Series A Preferred Stock attached as
exhibits hereto and incorporated by reference herein. Further details of this
transaction are contained in the Company's press release dated May 15, 2000,
attached as an exhibit hereto and incorporated by reference herein.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 4.1 Certificate of Designation of Rights, Preferences and
Privileges of Series A Preferred Stock
Exhibit 10.44 Stock Purchase Agreement dated May 12, 2000, by and
between Sync Research and Entrada Holdings
Exhibit 10.45 Registration Rights Agreement dated May 12, 2000 by
and between Sync Research and Entrada Holdings
Exhibit 99.2 Sync Research Press Release dated May 15, 2000
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.
SYNC RESEARCH, INC.
Date: May 19, 2000 /s/ William K. Guerry
-------------------------------------
William K. Guerry
President and Chief Executive Officer
<PAGE>
SYNC RESEARCH, INC.
Exhibit Number Description
Exhibit 4.1 Certificate of Designation of Rights, Preferences and
Privileges of Series A Preferred Stock
Exhibit 10.44 Stock Purchase Agreement dated May 12, 2000 by and between
Sync Research and Entrada Holdings
Exhibit 10.45 Registration Rights Agreement dated May 12, 2000, by and
between Sync Research and Entrada Holdings
Exhibit 99.2 Sync Research Press Release dated May 15, 2000
<PAGE>
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
AND PRIVILEGES OF
SERIES A PREFERRED STOCK
OF
SYNC RESEARCH, INC.
Pursuant to Section 151 of the General Corporation Law of the State of Delaware:
I, William K. Guerry, President and Chief Financial Officer of Sync
Research, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, the said Board of
Directors on May 9, 2000 adopted the following resolution creating a series of
shares of Preferred Stock designated as Series A Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of the corporation by the Certificate of Incorporation, the Board of
Directors does hereby provide for the issue of a series of Preferred Stock,
$0.001 par value, of the Corporation, to be designated "Series A Preferred
Stock", initially consisting of seven hundred thousand (700,000) shares and to
the extent that the designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions of the
Series A Preferred Stock are not stated and expressed in the Certificate of
Incorporation, does hereby fix and herein state and express such designations,
powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions thereof, as follows (all terms used
herein which are defined in the Certificate of Incorporation shall be deemed to
have the meanings provided therein):
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Preferred Stock", par value $0.001 per share, and the
number of shares constituting such series shall be seven hundred thousand
(700,000).
Section 2. DIVIDEND PROVISION. The holders of shares of Series A
Preferred Stock shall be entitled to receive cumulative dividends, out of any
assets legally available therefor, prior and in preference to any declaration or
payment of any dividend (payable other than in Common Stock or other securities
and rights convertible into or entitling the holder thereof to receive, directly
or indirectly, additional shares of Common Stock of the Corporation) on the
Common Stock of the Corporation, at the rate of six percent (6%) per annum,
which initially equals $0.191625 per share (as adjusted for stock splits, stock
dividends, reclassification and the like) per annum on each outstanding share of
Series A Preferred Stock, when and as declared
<PAGE>
by the Board of Directors or upon the event of any liquidation, dissolution
or winding up of the Corporation. Such dividends shall accumulate on each
share of Series A Preferred Stock from and after May 12, 2000, and shall
accumulate from day to day, whether or not earned or declared. Such dividends
shall be cumulative so that, except as provided below, if such dividends in
respect of any previous or current dividend period, at the rate specified
above, shall not have been paid the deficiency shall first be fully paid
before any dividend or other distribution shall be paid on or declared and
set apart for the Common Stock. Any accumulation of dividends on the Series A
Preferred Stock shall not bear interest. Dividends that have accumulated with
respect to a share of Series A Preferred Stock but have not been declared
shall, upon conversion of such share to Common Stock except in connection
with the Osicom Merger, be deemed declared and payable. No dividends shall
accumulate on any share of Series A Preferred Stock after conversion of such
share to Common Stock.
Section 3. LIQUIDATION; ACQUISITIONS.
(a) PREFERENCE. In the event of any liquidation, dissolution
or winding up of the Corporation, either voluntary or involuntary, the holders
of the Series A Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Corporation to the
holders of Common Stock by reason of their ownership thereof, an amount per
share equal to $3.19375 per share (as adjusted for stock splits, stock
dividends, reclassification and the like) for each share of Series A Preferred
Stock then held by them, plus accumulated but unpaid dividends. Accumulated
dividends on the Series A Preferred Stock shall be deemed to be declared by the
Board of Directors upon an event of liquidation, dissolution or winding up of
the Corporation, but shall not be deemed to be declared by the Board of
Directors upon the Osicom Merger. If, upon the occurrence of such liquidation,
dissolution or winding up of the Corporation, the assets and funds thus
distributed among the holders of the Series A Preferred Stock shall be
insufficient to permit the payment to such holders of the full aforesaid
preferential amounts, then, the entire assets and funds of the Corporation
legally available for distribution shall be distributed ratably among the
holders of the Series A Preferred Stock in proportion to the preferential amount
each such holder is otherwise entitled to receive.
(b) REMAINING ASSETS. Upon the completion of the
distribution required by Section 2(a) above and any other distribution that
may be required with respect to series of Preferred Stock that may from time
to time come into existence, if assets remain in the Corporation, the holders
of the Common Stock of the Corporation shall receive all of the remaining
assets of the Corporation.
(c) ACQUISITION EVENTS.
(i) An Acquisition of the Corporation other than the
Osicom Merger shall be deemed to be a liquidation, dissolution or winding up for
purposes of Section 2 and Section 3. The Osicom Merger shall not be treated as a
liquidation, dissolution or winding up for purposes of Section 2 or 3, but shall
instead be treated pursuant to Section 4(b) hereof. For purposes of this
Certificate of Designation, "ACQUISITION" shall mean (A) the consummation of the
transactions (the "OSICOM MERGER") contemplated by that certain Agreement and
Plan of Merger
-2-
<PAGE>
by and among the Corporation, Merger Co, a Delaware corporation and
wholly-owned subsidiary of the Corporation, Osicom Technologies, Inc. a
Delaware corporation ("OSICOM") and Osicom Technologies, Inc., a New Jersey
corporation ("OSICOM NEW JERSEY"), dated April 10, 2000, as may be amended by
the parties thereto (the "OSICOM MERGER AGREEMENT"), (B) the sale, conveyance
or disposal, of all or substantially all of the Corporation's property or
business, (C) the Corporation's merger into or consolidation with any other
corporation other than a merger effected exclusively for the purpose of
changing the domicile of the Corporation, or (D) any other transaction or
series of related transactions in which the Corporation's stockholders of
record as constituted immediately prior to such transaction or series of
related transactions will, immediately after such transaction or series of
related transactions (by virtue of securities issued as consideration in the
transaction or series of related transactions or otherwise) hold less than a
majority of the voting power of the surviving entity (or its successor or
parent).
Section 4. CONVERSION. The holders of the Series A Preferred Stock shall
have conversion rights as follows (the "CONVERSION RIGHTS"):
(a) RIGHT TO CONVERT. Subject to Section 4(c), each share of
Series A Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the office of
the Corporation or any transfer agent for such stock, into such number of fully
paid and nonassessable shares of Common Stock as is determined by dividing
$3.19375 by the Conversion Price applicable to such share, determined as
hereafter provided, in effect on the date the certificate is surrendered for
conversion. The initial Conversion Price per share of Series A Preferred Stock
shall be $3.19375. Such initial Conversion Price shall be subject to adjustment
as set forth in Section 4(d).
(b) AUTOMATIC CONVERSION. Each share of Series A Preferred
Stock shall automatically be converted , without any further action of any
party, into shares of Common Stock at the Conversion Price at the time in effect
for such share immediately upon the earlier of (i) the date specified by the
consent or agreement in writing of the Company and the holders of a majority of
the then outstanding shares of Series A Preferred Stock, or (ii) immediately
prior to the effective time of the Osicom Merger.
(c) MECHANICS OF CONVERSION. Subject to Section 4(b), before
any holder of Series A Preferred Stock shall be entitled to convert the same
into shares of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for such series of Preferred Stock, and shall give written notice
to the Corporation at its principal corporate office, of the election to convert
the same and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Corporation shall,
as soon as practicable thereafter, cause the transfer agent to issue and deliver
at such office to such holder of Preferred Stock, or to the nominee or nominees
of such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of such series of Preferred Stock to be
converted, and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be
-3-
<PAGE>
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date.
(d) CONVERSION PRICE ADJUSTMENTS OF PREFERRED STOCK FOR SPLITS
AND COMBINATIONS. The Conversion Price of the Series A Preferred Stock shall be
subject to adjustment from time to time as follows:
(i) STOCK SPLITS AND DIVIDENDS. In the event the
Corporation should at any time or from time to time after the date on which
shares of Series A Preferred Stock are first issued (the "PURCHASE DATE") fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling the
holder thereof to receive directly or indirectly, additional shares of Common
Stock (hereinafter referred to as "COMMON STOCK EQUIVALENTS") without payment of
any consideration by such holder for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such dividend distribution, split or subdivision if no record date
is fixed), the Conversion Price of the Series A Preferred Stock shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of each share of such series shall be increased in proportion to such
increase of the aggregate of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents with the number of shares
issuable with respect to Common Stock Equivalents determined from time to time
as provided in Section 4(d)(iii) below.
(ii) REVERSE STOCK SPLITS. If the number of shares
of Common Stock outstanding at any time after the Purchase Date is decreased by
a combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for the Series A Preferred
Stock shall be appropriately increased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be decreased in
proportion to such decrease in outstanding shares.
(iii) The following provisions shall apply for
purposes of this Section 4(d):
(A) The aggregate maximum number of shares of
Common Stock deliverable upon conversion or exercise of Common Stock Equivalents
(assuming the satisfaction of any conditions to convertibility or
exercisability, including, without limitation, the passage of time, but without
taking into account potential antidilution adjustments) shall be deemed to have
been issued at the time such Common Stock Equivalents were issued.
(B) In the event of any change in the number
of shares of Common Stock deliverable or in the consideration payable to the
Corporation upon conversion or exercise of such Common Stock Equivalents
including, but not limited to, a change resulting from the antidilution
provisions thereof, the Conversion Price of the Series A
-4-
<PAGE>
Preferred Stock, to the extent in any way affected by or computed using such
Common Stock Equivalents, shall be recomputed to reflect such change, but no
further adjustment shall be made for the actual issuance of Common Stock or
any payment of such consideration upon the exercise of any such options or
rights or the conversion or exchange of such securities.
(C) Upon the termination or expiration of
the convertibility or exercisability of any such Common Stock Equivalents,
the Conversion Price of the Series A Preferred Stock, to the extent in any
way affected by or computed using such Common Stock Equivalents, shall be
recomputed to reflect the issuance of only the number of shares of Common
Stock (and Common Stock Equivalents which remain convertible or exercisable)
actually issued upon the conversion or exercise of such Common Stock
Equivalents.
(e) OTHER DISTRIBUTIONS. In the event the
Corporation shall declare a distribution payable in securities of other
persons, evidences of indebtedness issued by the Corporation or other
persons, assets (excluding cash dividends) or options or rights not referred
to in Section 4(d)(i), then, in each such case for the purpose of this
Section 4(e), the holders of Series A Preferred Stock shall be entitled to a
proportionate share of any such distribution as though they were the holders
of the number of shares of Common Stock of the Corporation into which their
shares of Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.
(f) RECAPITALIZATIONS. If at any time or from
time to time there shall be a recapitalization of the Common Stock (other
than an Acquisition or a subdivision or combination provided for elsewhere in
this Certificate of Designation), provision shall be made so that the holders
of the Series A Preferred Stock shall thereafter be entitled to receive upon
conversion of such Preferred Stock the number of shares of stock or other
securities or property of the Corporation or otherwise, to which a holder of
Common Stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in
the application of the provisions of this Section 4 with respect to the
rights of the holders of such Preferred Stock after the recapitalization to
the end that the provisions of this Section 4 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of such Preferred Stock) shall be applicable after that event and
be as nearly equivalent as practicable.
(g) NO FRACTIONAL SHARES AND CERTIFICATE AS TO
ADJUSTMENTS.
(i) No fractional shares shall be issued upon
the conversion of any share or shares of the Series A Preferred Stock, and the
number of shares of Common Stock to be issued shall be rounded down to the
nearest whole share. The number of shares issuable upon such conversion shall be
determined on the basis of the total number of shares of Series A Preferred
Stock the holder is at the time converting into Common Stock and the number of
shares of Common Stock issuable upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment
or readjustment of the Conversion Price of Series A Preferred Stock pursuant to
this Section 4, the Corporation, at
-5-
<PAGE>
its expense, shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each holder of
such Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment
and readjustment, (B) the Conversion Price for the Series A Preferred Stock
at the time in effect, and (C) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon
the conversion of a share of the Series A Preferred Stock.
(h) NOTICES OF RECORD DATE. In the event of any
taking by the Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend) or other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to
receive any other right, or an Acquisition, or in the event of a proposed
liquidation, dissolution or winding up of the Corporation, the Corporation
shall give notice to each holder of Series A Preferred Stock of the proposed
dividend, distribution, right, or proposed Acquisition or liquidation,
dissolution or winding up.
(i) RESERVATION OF STOCK ISSUABLE UPON
CONVERSION. The Corporation shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, solely for the purpose
of effecting the conversion of the shares of the Series A Preferred Stock,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of such series
of Preferred Stock; and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of
all then outstanding shares of such series of Preferred Stock, in addition to
such other remedies as shall be available to the holder of such Preferred
Stock, the Corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares
of Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain
the requisite stockholder approval of any necessary amendment to the
Corporation's Certificate of Incorporation.
(j) NOTICES. Any notice required by this
Certificate of Designation to be given to the holders of shares of Series A
Preferred Stock shall be deemed given : (i) if delivered personally, on the
date of delivery, (ii) if delivered by confirmed facsimile transmission, on
the date of such confirmation of receipt, (iii) if by overnight express
courier, on the business day after the date of deposit with such courier, and
(iv) if by U.S. mail, five business days after deposit in the United States
mail, postage prepaid, and in each case addressed to each holder of record at
his address appearing on the books of the Corporation.
Section 5. VOTING RIGHTS. The holder of each share of Series A
Preferred Stock shall have the right to one vote for each share of Common
Stock into which such Preferred Stock could then be converted, and with
respect to such vote, such holder shall have full voting rights and powers
equal to the voting rights and powers of the holders of Common Stock, and
shall be
-6-
<PAGE>
entitled, notwithstanding any provision hereof, to notice of any
stockholders' meeting in accordance with the bylaws of the Corporation, and
shall be entitled to vote, together with holders of Common Stock as a single
class on an as-converted basis, with respect to any question upon which
holders of Common Stock have the right to vote. Fractional votes shall not,
however, be permitted and any fractional voting rights available on an
as-converted basis (after aggregating all shares into which shares of Series
A Preferred Stock held by each holder could be converted) shall be rounded
down to the next lowest whole number.
Section 6. STATUS OF CONVERTED STOCK. In the event any shares of
Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so
converted shall be cancelled and shall not be issuable by the Corporation.
Section 7. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable.
-7-
<PAGE>
IN WITNESS WHEREOF, I have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this 11th day of
May, 2000.
/s/ William K. Guerry
---------------------------------
William K. Guerry, President and
Chief Financial Officer
.
-8-
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of May 12, 2000,
by and between Sync Research Inc., a Delaware corporation (the "COMPANY"), and
Entrada Holdings LLC, a New York limited liability company (the "PURCHASER").
WHEREAS, the Company wishes to sell to the Purchaser, and the Purchaser
wishes to purchase from the Company, on the terms and subject to the conditions
set forth in this Agreement, shares of the Company's Preferred Stock, par value
$.001 per share (the "SHARES") with the rights, preferences and privileges as
shown in the Certificate of Designation of Rights, Preferences and Privileges of
Series A Preferred Stock attached as EXHIBIT A hereto (the "CERTIFICATE OF
DESIGNATION"); and
WHEREAS, the Company has agreed to effect the registration of the
shares of Common Stock issuable on conversion of the Shares (the "REGISTRABLE
SHARES") under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
pursuant to a Registration Rights Agreement of even date herewith by and between
the Company and the Purchaser attached hereto as EXHIBIT B (the "REGISTRATION
RIGHTS AGREEMENT"); and
WHEREAS, the sale of the Shares by the Company to the Purchaser will be
effected in reliance upon an exemption from securities registration in
accordance with Section 4(2) of the Securities Act and the rules and regulations
promulgated by the Securities and Exchange Commission (the "COMMISSION") under
the Securities Act.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained in this Agreement, the Company and the Purchaser hereby
agree as follows:
1. PURCHASE AND SALE OF THE SHARES.
1.1 AGREEMENT TO PURCHASE AND SELL. Upon the terms and subject to the
satisfaction of the conditions set forth herein, the Company agrees to sell at
the Closing (as defined in paragraph 1.2 below), and the Purchaser agrees to
purchase, Seven Hundred Thousand (700,000) Shares at a purchase price per Share
equal to the average closing sale price of the Company's Common Stock as
reported by the Nasdaq National Market for the ten trading days ending on April
28, 2000 (which the parties agree is $3.19375 per Share) or Two Million Two
Hundred Thirty Five Thousand Six Hundred Twenty Five Dollars ($2,235,625) in the
aggregate (the "PURCHASE PRICE").
1.2 CLOSING. Subject to the satisfaction or waiver of the conditions
set forth herein, the closing of the purchase and sale of the Shares hereunder
(the "CLOSING") will be held simultaneously with the execution and delivery of
this Agreement and will be deemed completed when this Agreement and the other
Transaction Documents (as defined below) have been executed and delivered by the
Company and Purchaser (which delivery may be effected by facsimile
transmission), and full payment of the Purchase Price has been made by the
Purchaser by wire transfer of immediately available funds against physical
delivery by the Company of
<PAGE>
duly executed certificates representing the Shares purchased by the Purchaser
at the Closing. The date on which the Closing occurs is referred to herein as
the "CLOSING DATE".
1.3 CERTAIN DEFINITIONS. When used herein, (A) "BUSINESS DAY" shall
mean any day on which the New York Stock Exchange and commercial banks in the
city of Los Angeles are open for business, (B) an "AFFILIATE" of a party shall
mean any person or entity controlling, controlled by or under common control
with that party and (C) "CONTROL" shall mean, with respect to an entity, the
ability to direct the business, operations or management of such entity, whether
through an equity interest therein or otherwise.
2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby makes the following representations and warranties
to the Company and agrees with the Company that, as of the date of this
Agreement and as of the Closing Date:
2.1 AUTHORIZATION; ENFORCEABILITY. The Purchaser is duly and validly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization with full power and authority
to purchase the Shares and to execute and deliver this Agreement. This Agreement
constitutes the Purchaser's valid and legally binding obligation, enforceable in
accordance with its terms, except as such enforcement may be limited by (i)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (ii) general principles of equity.
2.2 ACCREDITED INVESTOR; INVESTMENT INTENT. The Purchaser is an
accredited investor as that term is defined in Rule 501 of Regulation D, and is
acquiring the Shares solely for its own account for investment purposes as a
principal and not with a present view to the public resale or distribution of
all or any part thereof, except pursuant to sales that are exempt from the
registration requirements of the Securities Act or sales registered under the
Securities Act; provided, however that in making such representation, the
Purchaser does not agree to hold the Shares for any minimum or specific term and
reserves the right to sell, transfer or otherwise dispose of the Shares at any
time in accordance with the provisions of this Agreement and with Federal and
state securities laws applicable to such sale, transfer or disposition.
2.3 INFORMATION. The Company has provided the Purchaser with
information regarding the business, operations and financial condition of the
Company, and has granted to the Purchaser the opportunity to ask questions of
and receive answers from representatives of the Company, its officers,
directors, employees and agents concerning the Company and materials relating to
the terms and conditions of the purchase and sale of the Shares hereunder.
2.4 LIMITATIONS ON DISPOSITION. The Purchaser acknowledges that,
except as provided in the Registration Rights Agreement, the Shares and the
Registrable Shares have not been and are not being registered under the
Securities Act and may not be transferred or resold without registration under
the Securities Act or unless pursuant to an exemption therefrom.
-2-
<PAGE>
2.5 LEGEND. The Purchaser understands that the certificates
representing the Shares and any Registrable Shares will bear at issuance a
restrictive legend in substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or the securities laws of any state, and
may not be offered or sold unless a registration statement
under the Securities Act and applicable state securities laws
shall have become effective with regard thereto, or an
exemption from registration under the Securities Act and
applicable state securities laws is available in connection
with such offer or sale. The securities are subject to the
provisions of a Stock Purchase Agreement dated May 12, 2000
between the Company and Entrada Holdings LLC with respect to
voting."
Notwithstanding the foregoing, it is agreed that, as long as (A) the
resale or transfer (including without limitation a pledge) of any of the
Registrable Shares is registered pursuant to an effective registration
statement, (B) the Registrable Shares can be sold to the public pursuant to
Rule 144 under the Securities Act ("Rule 144") and a registered broker dealer
provides to the Company a customary broker's Rule 144 letter, or (C) the
Registrable Shares are eligible for sale to the public, without limitation as
to the amount of or manner in which the Registrable Shares may be sold, under
Rule 144(k) or any successor provision, the Registrable Shares shall be
issued without any legend or other restrictive language and, with respect to
Registrable Shares upon which such legend is stamped, the Company shall issue
new certificates without the first sentence of such legend to the holder upon
request. In addition to the foregoing, in the event that the Shares are
transferred to any transferee other than a member of the Purchaser, the
Company will issue new certificates without the last sentence of such legend.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties
to the Purchaser and agrees with the Purchaser that, as of the date of this
Agreement and as of the Closing Date, except as disclosed in a document (the
"DISCLOSURE SCHEDULE") delivered to Purchaser prior to the Closing:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the Company
and its subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and has
all requisite corporate power and authority to carry on its business as now
conducted. The term "subsidiaries" shall mean (i) Tylink Corporation and (ii)
Sync Research Asia Pacific Limited, the only entities in which the Company has a
voting equity interest of 50% or greater.
3.2 AUTHORIZATION; CONSENTS. The Company has the requisite corporate
power and authority to enter into and perform its obligations under (i) this
Agreement, (ii) the Registration Rights Agreement and (iii) all other
agreements, documents, certificates or other instruments executed and delivered
by or on behalf of the Company at any Closing (the instruments
-3-
<PAGE>
described in (i), (ii) and (iii) being collectively referred to herein
as the "TRANSACTION DOCUMENTS") and to issue and sell the Shares to the
Purchaser in accordance with the terms hereof. All corporate action on the
part of the Company by its officers, directors and stockholders necessary for
the authorization of the Certificate of Designation, and necessary for the
authorization, execution and delivery of, and the performance by the Company
of its obligations under the Transaction Documents has been taken, and no
further consent or authorization of the Company, its Board of Directors, its
stockholders, any governmental agency or organization (other than as may be
required under the Securities Act and applicable state securities laws in
respect of the Registration Rights Agreement), or any other person or entity
is required (pursuant to any rule of the National Association of Securities
Dealers, Inc. (the "NASD") or otherwise).
3.3 ENFORCEMENT. The Transaction Documents and the Osicom Merger
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as such
enforcement may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (ii) general principles of
equity.
3.4 DISCLOSURE DOCUMENTS; AGREEMENTS; FINANCIAL STATEMENTS; OTHER
INFORMATION. The Company has filed with the Commission: (i) the Company's Annual
Report on Form 10-K for the year ended December 31, 1999 and (ii) all Current
Reports on Form 8-K required to be filed by the Company with the Commission
since December 31, 1999 (collectively, the "DISCLOSURE DOCUMENTS"). The Company
is not aware of any event occurring on or prior to the Closing (other than the
transactions effected hereby) that would require the filing of, or with respect
to which the Company intends to file, a Form 8-K after the Closing. Each
Disclosure Document, as of the date of the filing thereof with the Commission,
conformed, and as of the Closing Date will conform, in all material respects to
the requirements of the Exchange Act, and the rules and regulations thereunder
and such Disclosure Document did not, as of the date of such filing, and will
not, as of the Closing Date, contain an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that any information set forth in any
Disclosure Document that is a forward-looking statement as defined in Rule
175(c) promulgated by the Commission under the Securities Act shall not be
deemed to contain an untrue statement of material fact as long as such
forward-looking statement was made with a reasonable basis and in good faith.
3.5 CAPITALIZATION. The capitalization of the Company as of March 31,
2000, including its authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities exercisable for, or convertible into or
exchangeable for any shares of Common Stock is set forth in the Disclosure
Schedule. All of such outstanding shares of capital stock have been, or upon
issuance will be, validly issued, fully paid and non-assessable. No shares of
the capital stock of the Company are subject to preemptive rights or any other
similar rights of the stockholders of the Company or any liens or encumbrances
created by or through the Company. Except as disclosed in the
-4-
<PAGE>
Disclosure Schedule, or as contemplated herein, there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exercisable or exchangeable for, any shares of capital stock of the Company
or any of its subsidiaries, or arrangements by which the Company or any of
its subsidiaries is or may become bound to issue additional shares of capital
stock of the Company or any of its subsidiaries.
3.6 VALID ISSUANCE. The Shares and the Registrable Shares are duly
authorized and, when issued, sold and delivered in accordance with the terms of
this Agreement and the Certificate of Designation, (i) will be duly and validly
issued, fully paid and nonassessable, free and clear of any taxes, liens,
claims, preemptive or similar rights or encumbrances imposed by or through the
Company, (ii) based in part upon the representations of the Purchaser in this
Agreement, will be issued, sold and delivered in compliance with all applicable
Federal and state securities laws and (iii) will be entitled to all of the
rights, preferences and privileges of the holders of the Preferred Stock (and,
upon the conversion of the Shares into Registrable Shares, the Common Stock) of
the Company.
3.7 NO CONFLICT WITH OTHER INSTRUMENTS. The execution, delivery and
performance of this Agreement and the other Transaction Documents, and
consummation of the transactions contemplated hereby and thereby will not result
in (a) a violation of any provision of the Certificate of Incorporation or
by-laws of the Company or its subsidiaries, (b) a violation of any Law (as
defined below) or any judgment, decree, order, regulation or rule of any court
or other Governmental Entity (as defined in Section 5.1.8 hereof) applicable to
the Company or its subsidiaries, or (c) any violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any provision, instrument or contract to which the Company or any
of its subsidiaries is a party or by which any of their assets are subject, or
an event which results in the creation of any lien, charge or encumbrance upon
any assets of the Company or of any of its subsidiaries or the triggering of any
preemptive or anti-dilution rights or rights of first refusal or first offer on
the part of holders of the Company's securities. "LAW" shall mean any statute,
ordinance, code, rule, regulation or order enacted, adopted, promulgated,
applied or followed by any Governmental Entity.
3.8 BREACH OF CONTRACT; LITIGATION.
3.8.1 The Company is not aware of any breaches in any
agreement to which it is a party, which breach could have a material adverse
effect on the Company and its subsidiaries taken as a whole.
3.8.2 Except as described in the Disclosure Schedule, there is
no material claim or litigation pending, or, to the Company's knowledge,
threatened or contemplated, against the Company or any of its subsidiaries, or
against any officer, director or employee of the Company or any such subsidiary
in connection with such person's employment therewith. Neither the Company nor
any of its subsidiaries is a party to or subject to the provisions of, any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality which
-5-
<PAGE>
could reasonably be expected to have a material adverse effect on the
consolidated business or financial condition of the Company and its
subsidiaries taken as a whole.
3.9 TRADING ON NASDAQ. The Common Stock is designated for quotation on
the NASDAQ National Market and trading in the Common Stock on such market has
not been suspended. The Company is in full compliance with the continued
designation criteria of the NASDAQ National Market and does not reasonably
anticipate that the Common Stock will be delisted from the NASDAQ National
Market, whether by reason of the transactions contemplated by this Agreement or
the other Transaction Documents and is not aware of any inquiry by or received
any notice from the NASD regarding any failure or alleged failure by the Company
to comply with such requirements which has not been favorably resolved prior to
the date hereof.
3.10 SOLICITATION. Neither the Company nor any of its subsidiaries or
affiliates, nor any person acting on its or their behalf, (i) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Shares or (ii) has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under any circumstances that would require
registration of the Shares under the Securities Act.
3.11 REGISTRATION RIGHTS. No holders of the Company's Common Stock nor
of any securities convertible or exchangeable into Common Stock nor of other
rights to acquire Common Stock (except stock options under our stock plans) have
any rights to require such Common Stock to be registered under the Securities
Act, whether pursuant to a demand, piggyback or other type of registration
right.
4. COVENANTS OF THE COMPANY.
4.1 CORPORATE EXISTENCE. The Company shall, so long as any Purchaser
or any member of the Purchaser beneficially owns any of the Shares, maintain its
corporate existence in good standing and shall pay all taxes owed by it when due
except for taxes which the Company reasonably disputes.
4.2 PROVISION OF INFORMATION. The Company shall provide the Purchaser,
as long as the Purchaser holds any Shares, with copies of its annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy
statements and other materials sent to stockholders, in each such case promptly
after the filing thereof with the Commission.
4.3 REPORTING STATUS. As long as the Purchaser or any member of the
Purchaser beneficially owns any Shares and until the date on which any of the
foregoing may be sold to the public pursuant to Rule 144(k) (or any successor
rule or regulation), (i) the Company shall timely file with the Commission all
reports required to be so filed pursuant to the Exchange Act and (ii) the
Company shall not terminate its status as an issuer required by the Exchange Act
to file reports thereunder even if the Exchange Act or the rules or regulations
thereunder would permit such termination. The Company agrees to file with the
Commission a Form 8-K describing the terms of the transactions contemplated by
this Agreement and the Registration Rights
-6-
<PAGE>
Agreement, with this Agreement attached to such Form 8-K as an exhibit
thereto, on or before the tenth (10th) day following the Closing Date in the
form required by the Exchange Act.
4.4 QUOTATION ON NASDAQ. The Company shall (i) promptly following the
Closing, take such action as may be necessary to include the Shares for
quotation on the NASDAQ National Market and (ii) use its best efforts to
maintain the listing of the Shares on such market.
4.5 BLUE SKY FILINGS. In connection with the sale of the Shares to the
Purchaser, the Company will comply with, and make all filings required under,
any state securities law to which the sale of the Shares hereunder is subject.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT CLOSING. The Purchaser's
obligations at the Closing, including without limitation its obligation to
purchase the Shares, are conditioned upon the fulfillment (or waiver by the
Purchaser) of each of the following events as of the Closing Date:
5.1.1 the representations and warranties of the Company set
forth in this Agreement shall be true and correct in all material respects as of
such date as if made on such date;
5.1.2 the Company shall have complied with or performed in all
material respects all of the agreements, obligations and conditions set forth in
this Agreement that are required to be complied with or performed by the Company
on or before the Closing;
5.1.3 the Company shall have delivered to the Purchaser a
certificate, signed by an officer of the Company, certifying that the conditions
specified in paragraphs 5.1.1, 5.1.2 and 5.1.7 have been fulfilled as of the
Closing;
5.1.4 the Company shall have delivered to the Purchaser a
certificate, signed by the Secretary of the Company, attaching a copy of the
resolutions of the Board of Directors authorizing the transactions contemplated
hereby, and certifying that such resolutions have not been modified or rescinded
since the date of their adoption by the Company's Board of Directors;
5.1.5 the Company shall have delivered a binding instruction
letter and opinion letter to the transfer agent, instructing the transfer agent
to issue a stock certificate representing the Shares being purchased;
5.1.6 the Company shall have executed and delivered the
Registration Rights Agreement;
5.1.7 except for the effects of the Company's lower than
expected first quarter revenues, as disclosed in a press release on April 11,
2000, there shall have been no material
-7-
<PAGE>
adverse changes in the Company's consolidated business or financial condition
since the date of the Company's most recent audited financial statements
contained in the Disclosure Documents;
5.1.8 there shall be no action or proceeding by or before any
federal, state, local or foreign government or any court of competent
jurisdiction, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a "GOVERNMENTAL ENTITY") or
NASD, pending or threatened, challenging or seeking to restrain or prohibit the
purchase and sale of any of the Shares or any of the other transactions
contemplated by this Agreement or seeking to obtain damages from either party
hereto in connection with the purchase and sale of the Shares or any of the
other transactions contemplated by this Agreement.
5.1.9 there shall be no statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary injunction, permanent
injunction or other order, enacted, entered, promulgated, enforced or issued by
any Governmental Entity or other legal restraint or prohibition preventing the
purchase and sale of the Shares in effect.
5.1.10 the Purchaser shall have received an opinion of the
Company's counsel in form and substance as set forth on EXHIBIT B.
5.1.11 the Certificate of Designation shall be filed with the
office of the Secretary of State of Delaware and shall be in effect as of the
Closing.
5.1.12 the Company shall have delivered to counsel for the
Purchaser a certificate from the Delaware Secretary of State of recent date
stating that the Company is in good standing and has paid all of its franchise
taxes and a bringdown letter stating that the Company continued to be in good
standing with the State of Delaware as of the date of the Closing.
5.2 CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING. The
Company's obligations at the Closing are conditioned upon the fulfillment (or
waiver by the Company) of each of the following events as of the Closing Date:
5.2.1 the representations and warranties of the Purchaser
shall be true and correct in all material respects as of such date as if made on
such date; and
5.2.2 the Purchaser shall have complied with or performed all
of the agreements, obligations and conditions set forth in this Agreement that
are required to be complied with or performed by the Purchaser on or before the
Closing.
5.2.3 there shall be no action or proceeding by or before any
Governmental Entity or NASD, pending or threatened, challenging or seeking to
restrain or prohibit the purchase and sale of any of the Shares or any of the
other transactions contemplated by this Agreement or seeking to obtain damages
from either party hereto in connection with the purchase and sale of the Shares
or any of the other transactions contemplated by this Agreement.
5.2.4 there shall be no statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary injunction, permanent
injunction or other order, enacted,
-8-
<PAGE>
entered, promulgated, enforced or issued by any Governmental Entity or other
legal restraint or prohibition preventing the purchase and sale of the Shares
in effect.
5.2.5 pursuant to the Agreement and Plan of Merger by and
among the Company, Merger Co, a Delaware corporation and wholly-owned subsidiary
of the Company, Osicom Technologies, Inc., a Delaware corporation ("OSICOM") and
Osicom Technologies, Inc., a New Jersey corporation ("OSICOM NEW JERSEY"), dated
April 10, 2000 (the "OSICOM MERGER AGREEMENT") pursuant to which Merger Co will
merge with and into Osicom and Osicom will become a wholly-owned subsidiary of
the Company (the "OSICOM MERGER"), the Company shall have obtained the consent
of Osicom to this Agreement and the transactions contemplated hereby, including
the issuance of the Shares.
6. ADDITIONAL COVENANTS
6.1 COMMISSION. At the Closing, the Company shall pay to Andersen
Weinroth Capital Corp., by certified check or wire transfer, a cash fee equal to
five percent (5%) of the aggregate Purchase Price, which the parties agree
equals One Hundred Eleven Thousand Seven Hundred Eighty-One Dollars and Twenty
Five Cents ($111,781.25), in connection with the transactions contemplated by
this Agreement.
6.2 BOARD OF DIRECTORS SEAT. If the Osicom Merger has not closed on or
before August 31, 2000, the Purchaser shall have the right, for so long as the
Purchaser together with its members holds at least 350,000 shares of Series A
Preferred Stock, to designate one member of the Board of Directors of the
Company (and to fill the vacancy of such member in the event of the resignation,
death or removal of such member). The nominee shall be required to complete a
questionnaire in the same form as has been executed by all other directors of
the Company. Subject to the approval of the existing directors upon review of
such questionnaire and any other relevant information, such approval not to be
unreasonably withheld, the existing directors will elect such nominee to the
Board of Directors, and the Company shall include such designee in its proposed
slate of directors for each subsequent annual meeting of stockholders, and such
individual shall receive the same compensation as each other non-employee
director of the Company.
6.3 CONDUCT OF BUSINESS BY THE COMPANY. The Company covenants that,
except (i) as otherwise expressly contemplated by this Agreement or the Osicom
Merger Agreement or (ii) as consented to by the Purchaser, from and after the
date of this Agreement and until the earlier of: (A) the closing of the Osicom
Merger, or (B) August 31, 2000, the Company shall, and shall cause each of its
subsidiaries to:
(a) use all reasonable efforts consistent with good business judgment
to (i) preserve intact the present business organization of the Company and
its subsidiaries and pay payables and collect receivables in a manner
consistent with past practice and otherwise operate the Company and its
subsidiaries in the ordinary and regular course of business consistent with
past practice; (ii) maintain the Company's and its subsidiaries' books and
records in accordance with past practices; (iii) keep available the services
of the Company's and its subsidiaries' officers and
-9-
<PAGE>
employees; and (iv) maintain satisfactory relationships with licensors,
suppliers, creditors, distributors, customers and others having material
business relationships with the Company and its subsidiaries;
(b) notify the Purchaser of any change in the normal course of business
or operations of the Company or its subsidiaries and of any governmental
complaints, investigations or hearings of which the Company or its subsidiaries
is notified (or communications received by the Company or its subsidiaries
indicating that the same may be contemplated), or the institution or settlement
of litigation or any claim, in each case involving the Company or its
subsidiaries, and to keep Purchaser informed of such events;
(c) comply in all material respects with all applicable laws,
including, without limitation, applicable environmental laws.
(d) not
(i) cause to be issued or sold any shares of capital stock or
debt or equity securities of the Corporation or its subsidiaries, except for (A)
shares issued on the exercise of stock options or (B) the shares to be issued in
connection with the Osicom Merger;
(ii) issue, grant or enter into any options, warrants, rights,
subscription agreements or commitments of any kind with respect to the issuance
of any shares of capital stock or debt or equity securities of the Corporation
or its subsidiaries, except in the ordinary course of business pursuant to the
Company's stock plans;
(iii) directly or indirectly cause to be purchased, redeemed
or otherwise acquired or disposed of any shares of capital stock of the
Corporation or its subsidiaries;
(iv) declare, set aside or pay any dividend or other
distribution;
(v) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any securities, other than
pursuant to the Corporation's stock plans and agreements in accordance with
their terms as in effect on the date hereof;
(vi) permit or allow the Corporation or its subsidiaries to
borrow or agree to borrow any funds or incur, whether directly or by way of
guarantee, any obligation for borrowed money, except in an aggregate amount not
in excess of $2.1 million;
(vii) subject any of the assets of the Corporation or any of
its subsidiaries (real, personal or mixed, tangible or intangible) to any
encumbrance or otherwise permit or allow the sale, lease, transfer or
disposition of any assets of the Corporation or its subsidiaries (real, personal
or mixed, tangible or intangible), other than in the ordinary course of business
and consistent with past practice;
-10-
<PAGE>
(viii) assume, guarantee, or otherwise become responsible for
the obligations of, or make any loans or advances to, any other individual, firm
or corporation;
(ix) enter into any new material line of business;
(x) enter into any collective bargaining agreements;
(xi) increase the compensation or fringe benefits of any of
the officers or directors of the Corporation or any of its subsidiaries or,
other than in accordance with past practice, effect any material general
increase in the compensation or fringe benefits of the employees of the
Corporation or any of its subsidiaries or pay or agree to pay any pension,
retirement allowance, or other benefit not required by any existing employee
benefit plan or agreement to any such officers or employees, or alter, amend,
terminate in whole or in part, or curtail or permanently discontinue
contributions to, any pension plan or any other employee benefit plan;
(xii) amend the certificate of incorporation, the Certificate
of Designation or by-laws of the Corporation or any of its subsidiaries; or
(xiii) agree to do any of the foregoing.
6.4 CONDUCT OF BUSINESS BY THE COMPANY AFTER AUGUST 31, 2000. The
Company covenants that in the event the Osicom Merger has not closed on or
before August 31, 2000, except (i) as otherwise expressly contemplated by this
Agreement, or (ii) as consented to by the Purchaser, from and after August 31,
2000 and until the earlier of: (A) the closing of the Osicom Merger, or (B) the
date on which less than 350,000 shares of Series A Preferred Stock are
outstanding, the Company shall:
(a) notify the Purchaser of any change in the normal course of business
or operations of the Company or its subsidiaries and of any governmental
complaints, investigations or hearings of which the Company or its subsidiaries
is notified (or communications received by the Company or its subsidiaries
indicating that the same may be contemplated), or the institution or settlement
of litigation or any claim, in each case involving the Company or its
subsidiaries, and to keep Purchaser informed of such events;
(b) comply in all material respects with all applicable laws,
including, without limitation, applicable environmental laws.
(c) not
(i) cause to be issued or sold any shares of capital stock or
debt or equity securities of the Company or its subsidiaries, except for (A)
shares issued on the exercise of stock options, (B) the shares to be issued in
connection with the Osicom Merger, or (C) the issuance of shares or securities
exercisable for or convertible into shares in one or a series of transactions
and in an aggregate number of shares not in excess of ten percent (10%) of the
-11-
<PAGE>
outstanding shares of capital stock (as measured on the date of such
issuance) in any twelve month period (excluding the Shares issued hereunder
in the calculation of any such ten percent limit, but including the Shares
issued hereunder in the calculation of shares outstanding on such date of
issuance), PROVIDED HOWEVER that none of such shares shall rank pari passu
with or senior to the Shares in terms of voting, dividends, conversion or
upon liquidation.
(ii) issue, grant or enter into any options, warrants, rights,
subscription agreements or commitments of any kind with respect to the issuance
of any shares of capital stock or debt or equity securities of the Corporation
or its subsidiaries, except in the ordinary course of business pursuant to the
Company's stock plans.
(iii) directly or indirectly cause to be purchased, redeemed
or otherwise acquired or disposed of any shares of capital stock of the
Corporation or its subsidiaries.
(iv) declare, set aside or pay any dividend or other
distribution.
(v) permit or allow the Corporation or its subsidiaries to
borrow or agree to borrow any funds or incur, whether directly or by way of
guarantee, any obligation for borrowed money, other than in an aggregate amount
not in excess of $2.1 million.
(vi) assume, guarantee, or otherwise become responsible for
the obligations of, or make any loans or advances to, any other individual, firm
or corporation other than in the ordinary course of business and consistent with
past practice.
(vii) amend the certificate of incorporation, the Certificate
of Designation or by-laws of the Corporation or any of its subsidiaries in a
manner adverse to the holders of Series A Preferred Stock; or
(viii) agree to do any of the foregoing.
6.5 BEST EFFORTS. The Company shall use its best efforts to perform
its obligations under the Osicom Merger Agreement.
6.6 INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Purchaser
and its Affiliates (as defined below), and the successors and assigns of all
of them, from, against and in respect of any and all Losses (as defined
below) resulting from, incurred in connection with or arising out of the
purchase and ownership by the Purchaser of the Shares and the Registrable
Shares. The party or parties being indemnified are referred to herein as the
"INDEMNITEE" and the Company is referred to herein as the "INDEMNITOR." The
term "AFFILIATE" or "AFFILIATED" shall mean a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Purchaser. The term "LOSS" or "LOSSES"
shall mean any and all legal fees and related expenses reasonably incurred by
such Indemnitee in connection with the defense of or any proceeding with
respect to any claims, whether accrued,
-12-
<PAGE>
contingent or otherwise, resulting from or arising out of the purchase and
ownership by the Purchaser of the Shares and the Registrable Shares and in
which Indemnitee is named as a defendant, provided however that "LOSS" and
"LOSSES" shall not mean any judgments, damages or amounts paid in settlement
of any claim.
(b) Any party who receives notice of a potential claim that may, in the
judgment of such party, result in a Loss shall use all reasonable efforts to
provide the parties hereto notice thereof in the manner provided herein,
provided that failure or delay or alleged delay in providing such notice shall
not adversely affect such party's right to indemnification hereunder unless such
failure materially prejudices Indemnitor's ability to coordinate the defense of
any such claim. In the event that any party shall incur or suffer any Losses in
respect of which indemnification may be sought by such party hereunder, the
Indemnitee shall assert a claim for indemnification by written notice (a
"NOTICE") to the Indemnitor stating the nature and basis of such claim in
reasonable detail, which Notice shall be given within 30 days of the filing of
the proceeding in which Indemnitee is named as a defendant, but the failure of
the Indemnitee to give the Notice within such time period shall not relieve the
Indemnitor of any liability that the Indemnitor may have to the Indemnitee,
unless such failure materially prejudices Indemnitor's ability to coordinate the
defense of such claim.
(c) The Losses in respect of such claims shall be borne and paid by the
Indemnitor, and the Indemnitor shall pay the Indemnitee, in immediately
available funds, as such Losses are incurred, as evidenced by itemized bills for
Losses to such Indemnitee. The parties agree to cooperate fully with one another
in connection with the defense of any such claims.
(d) The remedies provided for in this Agreement shall not be exclusive
of any other rights or remedies available to one party against the other, either
at law or in equity.
(e) The provisions of this Section 6.6 shall survive the Closing.
7. MISCELLANEOUS.
7.1 SURVIVAL; SEVERABILITY. The representations, warranties, covenants
and indemnities made by the parties herein shall survive the Closing
notwithstanding any due diligence investigation made by or on behalf of the
party seeking to rely thereon. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that in such case the parties shall negotiate
in good faith to replace such provision with a new provision which is not
illegal, unenforceable or void, as long as such new provision does not
materially change the economic benefits of this Agreement to the parties.
7.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties. Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and permitted assignors any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly
-13-
<PAGE>
provided in this Agreement. The Purchaser may assign its rights and
obligations hereunder, in connection with any private sale or transfer of the
Shares in accordance with the terms hereof, as long as, as a condition
precedent to such transfer, (i) the transferee executes an acknowledgment
agreeing to be bound by the applicable provisions of this Agreement
(including but not limited to the Purchaser's obligations under Section 6.1)
in which case the term "Purchaser" shall be deemed to refer to such
transferee as though such transferee were an original signatory hereto and
(ii) the Board of Directors of the Company reasonably deems that the proposed
transferee is not a competitor of the Company. The Company may not assign its
rights or obligations under this Agreement.
7.3 NO RELIANCE. Each party acknowledges that (i) it has such knowledge
in business and financial matters as to be fully capable of evaluating this
Agreement, the other Transaction Documents and the transactions contemplated
hereby and thereby, (ii) it is not relying on any advice or representation of
the other party in connection with entering into this Agreement, the other
Transaction Documents or such transactions (other than the representations made
in this Agreement or the other Transaction Documents), (iii) it has not received
from such party any assurance or guarantee as to the merits (whether legal,
regulatory, tax, financial or otherwise) of entering into this Agreement or the
other Transaction Documents or the performance of its obligations hereunder and
thereunder, and (iv) it has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors to the extent that it
has deemed necessary, and has entered into this Agreement and the other
Transaction Documents based on its own independent judgment and on the advice of
its advisors as it has deemed necessary, and not on any view (whether written or
oral) expressed by such party.
7.4 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed under the laws of the State of California without regard to the
conflict of laws provisions thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the State
of California, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
7.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
7.6 HEADINGS. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
-14-
<PAGE>
7.7 NOTICES. Any notice, demand or request required or permitted to be
given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with an original to follow) on or before
5:00 p.m., California time, on a business day or, if such day is not a business
day, on the next succeeding business day, (ii) on the next business day after
timely delivery to a nationally-recognized overnight courier and (iii) on the
third business day after deposit in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid), addressed to the parties as follows:
If to the Purchaser:
Entrada Holdings, LLC
c/o Andersen Weinroth Capital Corp.
1330 Avenue of the Americas
36th Floor
New York, New York 10019
Attn: Rohit Phansalkar
Tel: (212) 842-1606
Fax: (212) 842-1540
With a copy to:
Swidler Berlin Shereff Friedman, LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Attn: Jeffry S. Hoffman
Tel: 212-891-9260
Fax: 212-891-9255
If to the Company:
Sync Research, Inc.
40 Parker
Irvine, CA 92618
Attn: Chief Executive Officer
Tel: 949-588-2070
Fax: 949-460-4481
with a copy to:
Venture Law Group
2775 Sand Hill Road
Menlo Park, CA 94025
Attn: Mark A. Medearis
-15-
<PAGE>
Tel: 650-854-4488
Fax: 650-233-8386
7.8 EXPENSES. The Company and the Purchaser each shall pay all costs
and expenses that it incurs in connection with the negotiation, execution,
delivery and performance of this Agreement; provided, however, that the
Company shall reimburse the Purchaser for legitimate and itemized legal fees
and expenses incurred by it in connection with its due diligence
investigation of the Company and the negotiation, preparation, execution,
delivery and performance of this Agreement and the other Transaction
Documents in an amount not to exceed Thirty Thousand Dollars ($30,000).
7.9 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
Transaction Documents constitute the entire agreement between the parties
with regard to the subject matter hereof and thereof, superseding all prior
agreements or understandings, whether written or oral, between or among the
parties. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended except pursuant to a written instrument executed
by the Company and the Purchaser and no provision hereof may be waived other
than by a written instrument signed by the party against whom enforcement of
any such waiver is sought.
7.10 FINDER'S FEE. Each party represents that it neither is nor will
be obligated for any finder's fee or commission in connection with this
transaction, other than the commission that is payable by the Company to
Andersen Weinroth Capital Corp. pursuant to Section 6.1. The Purchaser agrees
to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
Purchaser or any of its officers, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless the Purchaser
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.
-16
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.
ENTRADA HOLDINGS LLC SYNC RESEARCH INC.
By: /s/ R. Phansalkar By: /s/ William K. Guerry
---------------------------- -----------------------------
Name: Rohit Phansalkar Name: William K. Guerry
Title: Manager Title: Chief Executive Officer
----------------------
ANDERSEN WEINROTH CAPITAL CORP.
By: /s/ E. Alan Brumberger
-------------------------------
Name: E. Alan Brumberger
Title: President
------------------------
-17-
<PAGE>
EXHIBIT 10.45
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into this 12th day of May, 2000, by and between Sync Research, Inc., a
Delaware corporation (the "COMPANY") and Entrada Holdings LLC (the "PURCHASER").
This Agreement is made pursuant to a Stock Purchase Agreement, dated as
of May__, 2000 (the "PURCHASE AGREEMENT") between the Company and the Purchaser.
In order to induce the Purchaser to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to
closing under the Purchase Agreement. All defined terms used but not defined
herein shall have the meanings ascribed to them in the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"ACT" means Securities Act of 1933, as amended.
"COMMISSION" means Securities and Exchange Commission.
"COMMON STOCK" means Common Stock, $.001 par value per share, of the
Company.
"EXCHANGE ACT" means Securities Exchange Act of 1934, as amended.
"HOLDERS" is defined in Section 2(b) hereof.
"NASD" means National Association of Securities Dealers, Inc.
"PERSON" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"PROSPECTUS" means prospectus included in the Registration Statement
(as defined herein), as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Transfer
Restricted Securities (as defined herein) covered by the Registration Statement
and by all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material which may be incorporated by
reference into such Prospectus.
"REGISTRABLE DATE" means the earlier of: (i) ninety (90) days after the
closing of the Osicom Merger (as defined in the Purchase Agreement) or (ii) the
first anniversary of the date of this Agreement.
<PAGE>
"TRANSFER RESTRICTED SECURITIES" means each share of the Company's
Common Stock issued or issuable upon the conversion of the shares of Preferred
Stock issued pursuant to the Purchase Agreement) and any other shares of Common
Stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
shares of Common Stock, until each such share (i) has been effectively
registered under the Act, or (ii) is distributed to the public pursuant to Rule
144 under the Act or (iii) may be sold or transferred pursuant to Rule 144(k)(or
any similar provisions then in force) under the Act or otherwise.
"UNDERWRITER" means any underwriter, placement agent, selling broker,
dealer manager, qualified independent underwriter or similar securities industry
professional.
"UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING" means an offering
in which securities of the Company are sold to an Underwriter or with the
assistance of such Underwriter for reoffering to the public on a firm commitment
or best efforts basis.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) TRANSFER RESTRICTED SECURITIES. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) HOLDERS OF TRANSFER RESTRICTED SECURITIES. A Person is deemed to be
a holder of Transfer Restricted Securities (each, a "HOLDER") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. REGISTRATION
(a) REGISTRATION ON DEMAND.
(i) At any time after the Registrable Date the Purchaser on
behalf of the Holders of the Transfer Restricted Securities shall have the right
to require the Company, by written request, to cause the Transfer Restricted
Securities to be registered with the Commission by filing a Registration
Statement to cover the offer and resale by a Holder from time to time and the
methods of distribution elected by such holder of Transfer Restricted Securities
as set forth in such Registration Statement. Within 10 days after receipt of any
such request, the Company will serve a written notice of such registration
request to all Holders, and the Company will include in such registration all
Transfer Restricted Securities of such Holders with respect to which the Company
has received written requests for inclusion therein within 20 business days
after the delivery such notice. As used herein, "REGISTER", "REGISTERED" and
"REGISTRATION" each refer to a registration of the Transfer Restricted
Securities effected by filing with the Commission a Registration Statement in
compliance with the Act and the declaration or ordering by the Commission of
effectiveness of such Registration Statement. "REGISTRATION STATEMENT" shall
mean Form S-3 or such other form as may be available to the Company and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
-2-
<PAGE>
reference therein. In connection with any registration, the Company will pay for
all registration expenses (as defined in Section 5 hereof) and will pay for its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed.
(ii) A registration will not be deemed to have been effected
pursuant to this Section 3(a) unless it has been declared effective by the
Commission and the Company has complied in all material respects with its
obligations under this Agreement with respect thereto; provided that if, after
it has become effective, the offering of shares of Transfer Restricted
Securities pursuant to such registration is or becomes the subject of any stop
order, injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court prevents or otherwise
limits the sale of the shares of Common Stock pursuant to the registration at
any time within the time period provided under Section 4(b)(ii)(y), such
registration will be deemed not to have been effected. If (i) a registration
requested pursuant to this Section 3(a) is deemed not to have been effected or
(ii) the registration requested pursuant to this Section 3(a) does not remain
effective for a period of at least the period provided under Section
4(b)(ii)(y), then the Company shall continue to be obligated to effect such
registration pursuant to this Section 3(a).
(b) INCIDENTAL REGISTRATION. If the Company at any time proposes to
register (other than a registration on Form S-8 or S-4 or any successor or
similar forms) any of its equity securities under the Act, whether or not for
sale for its own account, in a manner which would permit registration of
Transfer Restricted Securities for offer or resale under the Act, it will each
such time use its best efforts to effect the registration under the Act of all
Transfer Restricted Securities held by the Holders; provided, however, that (i)
if such registration involves an Underwritten Offering, the Holders
participating in the Underwritten Offering, if requested by an Underwriter, must
sell their Transfer Restricted Securities to the Underwriters selected by the
Company on the same terms and conditions as apply to the Company; and (ii) if,
(x) at any time after giving written notice of its intention to register any
securities pursuant to this Section 3(b) and (y) prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company shall give written notice to all Holders of Transfer Restricted
Securities and, thereupon, shall be relieved of its obligation to register any
Transfer Restricted Securities in connection with such proposed registration.
Notwithstanding the foregoing, the Holders shall have the absolute right in
their sole discretion not to participate in any Underwritten Offering in the
event that the terms or conditions of such offering are not satisfactory.
(i) If a registration pursuant to Section 3(b) involves an
Underwritten Offering and the managing Underwriter advises the Company in
writing that, in its opinion, the number of equity securities (including all
Transfer Restricted Securities) which the Company, the Holders and any other
Persons intend to include in such registration exceeds the largest number of
securities that can be sold without having an adverse effect on such offering,
including the price at which such securities can be sold, the Company will
include in such registration (x) first, all the securities the Company proposes
to sell for its own account, and (y) second, to the extent
-3-
<PAGE>
that the number of securities that the Company proposes to sell for its own
account pursuant to Section 3(b) hereof is less than the number of equity
securities that the Company has been advised can be sold in such offering
without having the adverse effect referred to above, all Transfer Restricted
Securities requested to be included in such registration by the Holders pursuant
to Section 3(b) hereof (provided that if the number of Transfer Restricted
Securities requested to be included in such registration by the Holders pursuant
to Section 3(b) hereof, together with the number of Transfer Restricted
Securities to be included in such registration pursuant to clause (x) of this
Section 3(b)(i), exceeds the number that the Company has been advised can be
sold in such offering without having the adverse effect referred to above, the
number of such Transfer Restricted Securities requested to be included in such
registration by the Holders pursuant to Section 3(b)(i) hereof shall be limited
to such extent and shall be allocated pro rata among all such Holders on the
basis of the relative number of Transfer Restricted Securities then held by such
Holder) and all other Persons having similar registration rights with respect to
the Company's Common Stock.
(ii) In the event of an Underwritten Offering, upon the
Company's request, any Holder will execute and deliver a custody agreement and
power of attorney in form and substance reasonably satisfactory to the Holders
with respect to the Transfer Restricted Securities to be registered pursuant to
this Section 3(b) (a "CUSTODY AGREEMENT AND POWER OF ATTORNEY"). The Custody
Agreement and Power of Attorney will provide, among other things, that the
Holders will deliver to, and deposit in custody with, the custodian and
attorney-in-fact named therein a certificate or certificates representing such
shares of Transfer Restricted Securities (duly endorsed in blank by the
registered owner or owners thereof or accompanied by duly executed stock powers
in blank) and irrevocably appoint said custodian and attorney-in-fact as the
Holder's agent and attorney-in-fact with full power and authority to act under
the Custody Agreement and Power of Attorney on the Holder's behalf with respect
to the matters specified thereon. The Holders agree that they will execute such
other agreements as the Company may reasonably request to further evidence the
provision of this Section 3(b).
(c) No Holder of Transfer Restricted Securities may include any of its
Transfer Restricted Securities in any Registration Statement pursuant to this
Agreement unless such Holder furnishes to the Company in writing, within ten
(10) business days after receipt of a request therefor, such information related
to such Holder as the Company may reasonably request for use in connection with
any Registration Statement or Prospectus or preliminary Prospectus included
therein.
(d) Notwithstanding any other provision of Section 3(a), (A) if the
Company determines in the good faith judgment of the Company's counsel that the
filing of a Registration Statement would require the disclosure of material
information which the Company has a good faith business purpose for preserving
as confidential, the Company shall not be required to commence using its best
efforts to effect a registration pursuant to Section 3(a) until the earlier of
(i) the date upon which such material information is disclosed to the public (it
being understood that nothing herein shall require such disclosure) or ceases to
be material or (ii) 60 days after the Company makes such good faith
determination, (B) the Company shall have the right to defer the initial filing
or the effectiveness of a Registration Statement filed pursuant to Section 3(a)
hereof for a reasonable period of time to permit the Company to have prepared,
to the extent not
-4-
<PAGE>
already available, financial statements for the Company's most recently
completed fiscal period ended at the time that the demand for registration is
received by the Company, only to the extent that the Company, in consultation
with its regularly retained counsel and certified public accountants, determines
in good faith that the inclusion of such financial statements is desirable to
avoid the use of stale financial statements, and (C) the Company shall not be
obligated to effect more than two (2) registrations pursuant to Section 3(a).
The Company may impose stop-transfer instructions with respect to the Transfer
Restricted Securities of the Holders for any period of suspension of
effectiveness of the Registration Statement being filed pursuant to Section
3(a).
SECTION 4. REGISTRATION PROCEDURES
In connection with the Registration Statement, the Company will use its
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution or disposition thereof, and pursuant thereto the Company
will as expeditiously as possible:
(a) prepare, file and use its best efforts to cause to become effective
a registration statement under the Act regarding the Transfer Restricted
Securities to be offered; provided, however, that before filing a Registration
Statement or any Prospectus, or any amendments or supplements thereto (other
than documents incorporated by reference after the initial filing of the
Registration Statement), the Company will furnish to the Holders and the
Underwriter(s), if any, copies of all such documents proposed to be filed, and
the Company will not file any Registration Statement or amendment thereto or any
Prospectus or any supplement thereto to which (i) the Underwriter(s), if any,
shall reasonably object or (ii) the Holders of a majority of the Transfer
Restricted Securities to be registered in the Registration Statement shall
reasonably object, in each such case within ten (10) business days after the
receipt thereof. A Holder or Underwriter, if any, shall be deemed to have
reasonably objected to such filing if the Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed contains a
material misstatement or omission, which misstatement or omission is
specifically identified to the Company in writing within such ten (10) business
days;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary (i) to prevent the Registration Statement from
containing any material misstatement or omission and (ii) to keep such
Registration Statement effective and to comply with the provisions of the Act
with respect to the disposition of all Transfer Restricted Securities until the
later of (x) the disposition of all of the Transfer Restricted Securities
covered by such Registration Statement or (y) the expiration of three (3) years
after such Registration Statement becomes effective;
(c) use its best efforts to register or qualify all Transfer Restricted
Securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as the Holders or any Underwriter of such
Transfer Restricted Securities shall reasonably request, and do any and all
other acts and things which may be necessary or advisable to enable the Holders
or any Underwriter to consummate the disposition in such jurisdictions of its
Transfer Restricted Securities covered by such Registration Statement;
-5-
<PAGE>
(d) advise the Underwriter(s), if any, and selling Holders promptly
and, if requested by such Persons, to confirm such advice in writing, (i) when
the Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment thereto, when the same has become effective, (ii) of any request by
the Commission for amendments to the Registration Statement or any amendments or
supplements to the Prospectus or for additional information relating thereto,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the suspension
by any state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for any of the preceding purposes, and (iv) of the
existence of any fact and the happening of any event that makes any statement of
a material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or blue sky laws, the Company shall
use its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;
(e) in the case of any Underwritten Offering, furnish to the Holders
and the Underwriters, addressed to them, (A) an opinion of counsel for the
Company, dated the date of the closing under the underwriting agreement relating
to any Underwritten Offering, and (B) a comfort letter signed by the independent
public accountants who have certified the Company's financial statements
included in such Registration Statement, covering substantially the same matters
with respect to such Registration Statement (and the Prospectus included
therein) and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements, as are customarily covered
in opinions of issuer's counsel and in accountants' letters, respectively,
delivered to underwriters in underwritten public offerings of securities;
(f) promptly following the filing of any document that is to be
incorporated by reference into the Registration Statement or the Prospectus
(after initial filing of the Registration Statement), provide copies of such
document to the Holders;
(g) deliver to each Holder and each of the Underwriter(s), if any,
without charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement thereto as such Persons may
reasonably request; the Company consents to the use of the Prospectus and any
amendment or supplement thereto by each of the Holders and each of the
Underwriter(s), if any, in connection with the public offering and the sale of
the Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(h) comply with all applicable rules and regulations of the Commission,
including Section 11(a) of the Securities Act and Rule 158 of the Securities
Act, and make generally available to its security holders, as soon as
practicable, a consolidated earnings statement (which need not be audited) for
the twelve-month period (i) commencing at the end of any fiscal quarter
-6-
<PAGE>
in which Transfer Restricted Securities are sold to Underwriters in a firm or
best efforts Underwritten Offering or (ii) if not sold to Underwriters in such
an offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration Statement;
(i) make all filings required to be made with the NASD and in the
performance of any due diligence investigation by any Underwriter (including any
"qualified independent Underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD);
(j) cooperate with the Holders and the Underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in such
denominations and registered in such names as the Holders or the Underwriter(s),
if any, may request at least two business days prior to any sale or Transfer
Restricted Securities made by such Underwriter(s);
(k) if any fact or event contemplated by clause (d)(iv) above shall
exist or have occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading; and
(l) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange or quotation
system on which similar securities issued by the Company are then listed, if
any;
Each Holder as to which any Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
Each Holder agrees by acquisition of such Transfer Restricted
Securities that, upon receipt of any notice from the Company of the existence of
any fact of the kind described in Section 4(d)(iv) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus, or
until it is advised in writing (the "ADVICE") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings which are incorporated by reference in the Prospectus. If
so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities current at the time of receipt of such notice. In the event the
Company shall give any such notice, the time period regarding the effectiveness
of the Registration Statement set forth in Section 4(b) hereof shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 4(d) hereof to and including the date
when each
-7-
<PAGE>
selling Holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus or shall have received the
Advice.
SECTION 5. REGISTRATION EXPENSES
Except as otherwise specifically set forth herein, all expenses
incident to the Company's performance of or compliance with this Agreement will
be borne solely by the Company, regardless whether a Registration Statement
becomes effective, including without limitation:
(i) all registration and filing fees and expenses (including filings
made with the NASD);
(ii) fees and expenses of compliance with federal securities or state
blue sky laws;
(iii) expenses of printing (including, without limitation, expenses of
printing or engraving certificates for the Transfer Restricted Securities in a
form eligible for deposit with Depository Trust Company and of printing
Prospectuses), messenger and delivery service and telephone;
(iv) reasonable fees and disbursements of counsel for the Company;
(v) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit and
"cold comfort" letters required by or incident to such performance);
(vi) fees and expenses associated with any NASD filing required to be
made in connection with the Registration Statement, including, if applicable,
the fees and expenses of any "qualified independent Underwriter" (and its
counsel) that is required to be retained in accordance with the rules and
regulations of the NASD; and
(vii) the Company's internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees of any rating
agency (collectively, the "registration expenses").
The expense of any broker's commission or Underwriters' discount or
commission in connection with the sale of Transfer Restricted Securities shall
be borne by the Holder of such Transfer Restricted Securities.
SECTION 6. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder (each
such Holder an "INDEMNIFIED HOLDER") and in the case of an Underwritten
Offering, each Underwriter participating in the distribution (each such
Underwriter an "INDEMNIFIED UNDERWRITER"), each officer and director of each
Holder and each person that controls each Indemnified Holder or Indemnified
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and agents, employees, officers and directors or any such
controlling person of any Indemnified Holder or Indemnified Underwriter from and
against any and all losses, claims,
-8-
<PAGE>
damages, judgments, liabilities and expenses (including the reasonable fees and
expenses of counsel and other expenses in connection with investigating,
defending or settling any such action or claim) as they are incurred arising out
of or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary Prospectus or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except (i) the Company shall not be liable to any such Indemnified Holder or
Indemnified Underwriter in any such case insofar as such losses, claims,
damages, judgments, liabilities or expenses arise out of, or are based upon, any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to such Indemnified Holder or Indemnified Underwriter
furnished in writing by such Indemnified Holder or Indemnified Underwriter to
the Company expressly for use therein and (ii) the Company shall not be liable
to any such Indemnified Holder or Indemnified Underwriter under the indemnity
agreement in this Section 6(a) with respect to any preliminary Prospectus to the
extent that any such loss, claim, damage, judgment, liability or expense (x)
arises out of or is based upon an untrue statement or omission in such
prospectus and (y) such untrue statement or omission is corrected in an
amendment or supplement to such prospectus, and (z) having previously been
furnished by or on behalf of the Company with sufficient copies of such
prospectus as so amended or supplemented, such Indemnified Holder or Indemnified
Underwriter thereafter fails to deliver such prospectus as so amended or
supplemented prior to or concurrently with the sale of a person asserting the
claim from which such loss, claim, damages, judgments, liabilities or expenses
arise.
(b) If any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought or asserted against any
Indemnified Holder or Indemnified Underwriter with respect to which indemnity
may be sought against the Company pursuant to Section 6(a), such Indemnified
Holder or Indemnified Underwriter shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Holder or
Indemnified Underwriter and payment of all fees and expenses; provided, however,
that the omission so to notify the Company shall not relieve the Company from
any liability that they may have to any Indemnified Holder or Indemnified
Underwriter (except to the extent that the Company is materially prejudiced or
otherwise forfeits substantive rights or defenses by reason of such failure). An
Indemnified Holder or Indemnified Underwriter shall have the right to employ
separate counsel in any such action or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Holder or Indemnified Underwriter unless (i) the
Company agrees in writing to pay such fees and expenses, (ii) the Company has
failed promptly to assume the defense and employ counsel satisfactory to the
Indemnified Holder or Indemnified Underwriter or (iii) the named parties to any
such action or proceeding (including any impleaded parties) include both the
Indemnified Holder or Indemnified Underwriter, on the one hand, and the Company
and such Indemnified Holder or Indemnified Underwriter shall have been advised
in writing by its counsel that representation of it and the Company by the same
counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation has been
-9-
<PAGE>
proposed) due to actual or potential conflicts of interests between them (in
which case the Company shall not have the right to assume the defense of such
action on behalf of such Indemnified Holder or Indemnified Underwriter). The
Company shall not be liable for any settlement of any such action effected
without the written consent of the Company, but if settled with the written
consent of the Company, or if there is a final judgment with respect thereto,
the Company agrees to indemnify and hold harmless each Indemnified Holder or
Indemnified Underwriter from and against any loss or liability by reason of such
settlement or judgment. The Company shall not, without the prior written consent
of each Indemnified Holder or Indemnified Underwriter affected thereby, effect
any settlement of any pending or threatened proceeding in which such Indemnified
Holder or Indemnified Underwriter has sought indemnity hereunder, unless such
settlement includes an unconditional release of such Indemnified Holder or
Indemnified Underwriter from all liability arising out of such action, claim,
litigation or proceeding. For the purposes of this Section 6(b), the term
"conflict of interest" shall mean that there are one or more legal defenses
available to the Indemnified Holder or the Company, as applicable, which
different or additional defenses make joint representation inappropriate.
(c) Each Indemnified Holder and Indemnified Underwriter agrees to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act
(collectively, the "COMPANY INDEMNIFIED PARTIES") to the same extent as the
foregoing indemnity from the Company to such Indemnified Holder or Indemnified
Underwriter, but only with respect to information relating to such Indemnified
Holder or Indemnified Underwriter furnished to the Company in writing by such
Indemnified Holder or Indemnified Underwriter, respectively, expressly for use
in the Registration Statement, Prospectus (or any amendment of supplement
thereto), or any preliminary Prospectus. In case any action shall be brought
against any Company Indemnified Party based on the Registration Statement,
Prospectus (or any amendment of supplement), or any preliminary Prospectus and
in respect of which indemnification may be sought against each Indemnified
Holder and Indemnified Underwriter pursuant to this Section 6(c), such
Indemnified Holder and Indemnified Underwriter shall have the rights and duties
given to the Company by Section 6(a) (except that if the Company shall have
assumed the defense thereof, such Indemnified Holder and Indemnified Underwriter
may, but shall not be required to employ separate counsel therein and
participate in the defense thereof and the fees and expenses of such counsel
shall be at the expense of such Indemnified Holder or Indemnified Underwriter)
and the Company Indemnified Parties shall have the rights and duties given to
the Indemnified Holders or Indemnified Underwriters by Section 6(b). In no event
shall the liability of any Indemnified Holder hereunder be greater in amount
than the dollar amount of the net proceeds (after broker's commissions or
underwriters discounts and commissions) received by such Indemnified Holder upon
the sale of the Transfer Restricted Securities giving rise to such
indemnification obligation.
(d) If the indemnification provided for in this Section 6 is
unavailable to any party entitled to indemnification pursuant to Section 6(a) or
6(c), then such indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, judgments, liabilities and expenses
in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and each Indemnified Holder or Indemnified Underwriter
on the other in connection with the
-10-
<PAGE>
statements or omissions which resulted in such losses, claims, damages,
judgments, liabilities or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and each
Indemnified Holder and Indemnified Underwriter on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
by each Indemnified Holder and Indemnified Underwriter on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. In no event shall the liability
of any Indemnified Holder hereunder be greater in amount than the dollar amount
of the net proceeds (after broker's commissions or underwriters discounts and
commissions) received by such Indemnified Holder upon the sale of the Transfer
Restricted Securities giving rise to such contribution obligation.
(e) The Company and each Indemnified Holder and Indemnified Underwriter
agree that it would not be just and equitable if contribution pursuant to
Section 6(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in Section 6(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or expenses referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person found guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not found guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section
6 are in addition to any liability that any indemnifying party may otherwise
have to any indemnified party.
SECTION 7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Offering hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements. In
addition to the foregoing, all Holders agree that in connection with the first
Underwritten Offering following the date hereof, they shall not, to the extent
requested by the Company and the lead Underwriter in such offering, sell or
otherwise transfer or dispose of any Transfer Restricted Securities (other than
(i) sales, transfers or dispositions to donees who agree to be similarly bound
or (ii) sales, transfers or dispositions of Transfer Restricted Securities
included in the registration of the first Underwritten Offering or in any
registration statement previously declared effective) during a reasonable and
customary period of time, not to exceed 180 days, next following the effective
date of the Registration Statement relating to the first Underwritten Offering;
provided, however, that such agreement by the Holders not to dispose of Transfer
Restricted Securities during such period shall apply only if all executive
officers, directors and each stockholder holding at least 5% of the Common Stock
of the Company then
-11-
<PAGE>
outstanding and all other persons with registration rights relating to any of
the Company's securities to be registered in such offering (whether or not
pursuant to this Agreement) enter into similar agreements with the Company and
the Underwriters containing the same terms as set forth in this Section 7. In
order to enforce the foregoing covenant contained in the prior sentence, the
Company may impose stop-transfer instructions with respect to the Transfer
Restricted Securities of the Holders until the end of such agreed upon period.
SECTION 8. MISCELLANEOUS
(a) NO INCONSISTENT AGREEMENTS. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders of Transfer
Restricted Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders or Transfer Restricted
Securities hereunder do not in any way conflict with and are not inconsistent
with the rights granted to the Holders of the Company's securities under any
other agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of the Holders holding
a majority of the Transfer Restricted Securities.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), facsimile transmission, or
air courier guaranteeing overnight delivery;
(i) if to a Holder of Transfer Restricted Securities, at the
address set forth on the records of the Company's registrar, with a copy to:
Entrada Holdings LLC
c/o Andersen Weinroth Capital Corp.
1330 Avenue of the Americas, 36th Floor
New York, New York 10019
Attn: Rohit Phansalkar
Tel: 212-842-1605
Fax: 212-842-1540
With a copy to:
Swidler Berlin Shereff Friedman, LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Attn: Jeffry S. Hoffman
Tel: 212-891-9260
Fax: 212-891-9255
-12-
<PAGE>
(ii) if to the Company, initially at its address set forth in
the Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section, with a copy to:
Venture Law Group
2775 Sand Hill Road
Menlo Park, CA 94025
Attn: Mark A. Medearis
Tel: 650-854-4488
Fax: 650-233-8386
Any notice, demand or request required or permitted to be given by any
party to any other party pursuant to the terms of this Agreement shall be in
writing and shall be deemed given (i) when delivered personally or by verifiable
facsimile transmission (with an original to follow) on or before 5:00 p.m.,
California time, on a business day or, if such day is not a business day, on the
next succeeding business day, (ii) on the next business day after timely
delivery to a nationally-recognized overnight courier and (iii) on the third
business day after deposit in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid).
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder of Transfer Restricted Securities unless and to the extent
such successor or assign acquired Transfer Restricted Securities from such
Holder in accordance with the provisions of the Purchase Agreement.
Notwithstanding any assignment by the Purchaser of this Agreement, the Purchaser
shall remain the entity which pursuant to Section 3(a) has the right to require
the Company by written request to cause the Transfer Restricted Securities to be
registered pursuant to the terms of Section 3(a) unless the Purchaser expressly
agrees otherwise in a written instrument executed by the Purchaser.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed under the laws of the State of California without regard to the
conflict of laws provisions thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the State
of California, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit action or
proceeding, any claim that it is nor personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is
-13-
<PAGE>
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.
(h) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the securities sold pursuant to the Purchase Agreement. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
SYNC RESEARCH, INC.
By: /s/ William K. Guerry
-------------------------------------
Name: William K. Guerry
-----------------------------------
Title: CEO
----------------------------------
ENTRADA HOLDINGS LLC
By: /s/ R. Phansalker
-------------------------------------
Name: Rohit K. Phansalkar
-----------------------------------
Title: Manager
----------------------------------
-15-
<PAGE>
SYNC RESEARCH, INC.
12 Morgan
Irvine, CA 92618
(949) 588-2070
TRADED: NASDAQ: SYNX
AT THE COMPANY:
Gloria Corken
Shareholder Relations
(949) 588-2070
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
MAY 15, 2000
SYNC RESEARCH ANNOUNCES COMPLETION OF A $2.2 MILLION PREFERRED
STOCK PRIVATE PLACEMENT.
IRVINE, CA, MAY 15, 2000 - Sync Research, Inc. (Nasdaq: SYNX) today
reported that Andersen, Weinroth Capital Corporation, a New York investment
firm, has arranged the private placement of 700,000 shares of newly created
Preferred Stock of the Company for $3.19 per share through Entrada Holdings
LLC.
William Guerry, president and chief executive officer of Sync Research,
Inc., said, "We are excited about the confidence this investment
demonstrates in our new direction as Entrada Networks."
ABOUT SYNC RESEARCH
Sync Research (Nasdaq: SYNX) develops, manufactures and markets multi-
service frame relay access and routing solutions, frame relay circuit
management solution and digital transmission devices designed to
economically and reliably support business critical applications across
frame relay and other wide area network protocols. On April 11, 2000, Sync
announced its plan to merge with Osicom's network access subsidiary,
creating Entrada Networks. Sync products are available on a direct basis or
from select distributors and resellers worldwide. Company and product
information is available at www.sync.com and www.tylink.com.
Sync investors and security holders should read Sync's Registration
Statement on Form S-4 and the Prospectus/Proxy Statement of Sync Research,
Inc., relating to the merger
<PAGE>
transaction described above, when those documents become available, because
they will contain important information. When these and other documents
relating to the transaction have been filed with the U.S. Securities and
Exchange Commission, they may be obtained free of charge at the SEC's web
site at http://www.sec.gov. You may also obtain each of these documents
(when they become available) free of charge from Sync Research by directing
your request to the Sync Research investor relations contact person
identified in this release.
Except for historical information contained herein, the matters set
forth in this news release are forward-looking statements that are subject
to certain risks and uncertainties that could cause actual results to
differ materially from those set forth in the forward-looking statements,
including such factors among others, as significant fluctuations in
operating results, uncertain profitability, dependence on the IBM customer
base, uncertain market acceptance of products, product concentration,
dependence on channel partners and other resellers, rapid technological
change and new products, intense competition and the risk factors set forth
in the Company's recent filings with the Securities and Exchange Commission
including its Reports on Forms 10-K and 10-Q.
