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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 10, 1997
ACCESS BEYOND, INC.
(Exact name of registrant as specified in charter)
Delaware 0-21697 52-1987873
(State or Other Jurisdiction (Commission) (IRS Employer
of Incorporation) File Number) Identification No.)
1300 Quince Orchard Blvd., Gaithersburg, MD 20878
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (301) 921-8600
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On November 10, 1997 Access Beyond, Inc. (the "Company") executed a
preferred stock investment agreement (the "Investment Agreement") with certain
investors (the "Investors") providing for the sale of an aggregate of up to
45,000 shares of its 6% cumulative convertible preferred stock ("Preferred
Stock"), at a purchase price of $1,000 per share, for an aggregate purchase
price of up to $45.0 million. On November 11, 1997 10,000 such shares were
issued for an aggregate purchase price of $10,000,000. The remaining up to
35,000 shares are to be issued following the consummation of the contemplated
merger between the Company and Hayes Microcomputer Products, Inc., for an
aggregate purchase price of up to $35.0 million. The Preferred Stock is
convertible at the option of the holder into shares of the Company's common
stock, par value $.01 per share ("Common Stock"), at a conversion price equal to
the lesser of $8.00 or 85% of the average closing bid price of Common Stock for
the five consecutive trading days prior to the date of a conversion notice,
subject to adjustment under various circumstances. The Company has granted the
Investors certain registration rights with respect to such Common Stock.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
4.1 Preferred Stock Investment Agreement dated as of November 10,
1997 between the Company and the Investors (Certificate of
Designations and Form of Warrant are attached as exhibits).
4.2 Registration Rights Agreement dated as of November 11, 1997
between the Company and the Investors.
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.
Access Beyond, Inc.
Date: November 10, 1997 By: /s/ Ronald A. Howard
_________________________________
Ronald A. Howard, President
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EXHIBIT INDEX
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Exhibit No. Description
----------- -----------
4.1 Preferred Stock Investment Agreement dated as of November 10,
1997 between the Company and the Investors (Certificate of
Designations and Form of Warrant are attached as exhibits).
4.2 Registration Rights Agreement dated as of November 11, 1997
between the Company and the Investors.
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EXHIBIT 4.1
PREFERRED STOCK INVESTMENT AGREEMENT
PREFERRED STOCK INVESTMENT AGREEMENT ("AGREEMENT") dated as of November
12, 1997 between Access Beyond, Inc., a Delaware corporation (the "COMPANY"),
and each person or entity listed as an investor on Schedule I attached to this
Agreement (each individually an "INVESTOR" and collectively the "INVESTORS").
WITNESSETH:
WHEREAS, the Company desires to sell and issue to the Investors, and
the Investors wish to purchase from the Company, at two separate closings, an
aggregate of up to 45,000 shares of the Company's 6% Cumulative Convertible
Preferred Stock, liquidation preference $1,000 per share (the "PREFERRED
SHARES"), having the rights, designations and preferences set forth in the
Certificate of Designations (the "Certificate") in the form of Exhibit 1.1A
attached hereto, on the terms and conditions set forth herein; and
WHEREAS, the Preferred Shares will be convertible into shares ("COMMON
SHARES") of common stock, par value $0.01, of the Company ("COMMON STOCK"),
pursuant to the terms of the Certificate, and the Investors will have
registration rights with respect to such Common Shares issuable upon conversion,
pursuant to the terms of that certain Registration Rights Agreement to be
entered into between the Company and the Investors substantially in the form of
Exhibit 4.2(f) hereto ("REGISTRATION RIGHTS AGREEMENT"); and
WHEREAS, to induce the Investors to purchase the Preferred Shares, the
Company has agreed to issue to the Investors warrants in the form attached as
Exhibit 1.1B (the "WARRANTS") in the event the Company exercises its option to
redeem the Preferred Shares pursuant to the Certificate;
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF PREFERRED SHARES
Section 1.1 Issuance of Preferred Shares. Upon the following terms and
conditions, the Company shall issue and sell to each Investor severally, and
each Investor severally shall purchase from the Company, the number of Preferred
Shares indicated next to such Investor's name on Schedule I attached hereto.
(a)Purchase Price. The purchase price for the Preferred Shares to
be acquired by each Investor (the "PURCHASE PRICE") shall be the Purchase Price
set forth next to such Investor's name on Schedule I.
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(b) The Closings.
(i) The closing of the purchase and sale of 10,000 Preferred
Shares (the "Initial Closing"), shall take place at the offices of
Kleinberg, Kaplan, Wolff & Cohen, P.C. ("KKWC"), at 10:00 am.,
local time on the later of the following: (x) the trading day
following the date on which the last to be fulfilled or waived of
the conditions set forth in Article IV hereof and applicable to
the Initial Closing shall be fulfilled or waived in accordance
herewith, or (y) such other time and place and/or on such other
date as the Investors and the Company may agree. The date on which
the Initial Closing occurs is referred to herein as the "Initial
Closing Date".
(ii) The closing of the purchase and sale of 35,000 Preferred
Shares , or such lesser number of Preferred Shares as provided in
Section 1(c) hereof (the "Subsequent Closing"), shall take place
at the offices of KKWC at 10:00 am. local time on the later of the
following: (x) first trading day following the date on which the
last to be fulfilled or waived of the conditions set forth in
Article IV hereof and applicable to the Subsequent Closing shall
be fulfilled or waived in accordance herewith, or (y) such other
time and place and/or on such other date as the Investors and the
Company may agree. The date on which the Subsequent Closing occurs
is referred to herein as the "Subsequent Closing Date". The term
"Closing" shall refer to the Initial Closing or the Subsequent
Closing and the term "Closing Date" shall refer to the Initial
Closing Date or the Subsequent Closing Date, each as the context
requires.
(iii) On the applicable Closing Date, the Company shall
deliver to each Investor certificates (with the number of and
denomination of such certificates reasonably requested by such
Investor) representing the Preferred Shares purchased hereunder by
such Investor at the applicable Closing registered in the name of
such Investor or its nominee, each such certificate also
representing the automatic right to receive, if the Company
redeems Preferred Shares as provided in Section 4(e) of the
Certificate, a number of Warrants (determined in accordance with
the formula specified in the Certificate), registered in the name
of Investor or its nominee in such denominations as reasonably
requested by such Investor, and such Investor shall deliver to the
Company the Purchase Price for the Preferred Shares purchased by
such Investor hereunder by wire transfer in immediately available
funds to an account designated in writing by the Company. The
delivery of payment by each Investor of the Purchase Price
applicable to it as set forth in this paragraph shall constitute a
payment delivered to the Company in satisfaction of such
Investor's obligation to pay the Purchase Price hereunder. In
addition, each party shall deliver all documents, instruments and
writings required to be delivered by such party pursuant to this
Agreement at or prior to the applicable Closing.
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(c) Investment Limitation at Subsequent Closing. Notwithstanding
any other provision of this Agreement, the Investors will not be obligated to
purchase, and the Company will not be obligated to sell, Preferred Shares at the
Subsequent Closing to the extent that the aggregate dollar amount of such
purchase, when combined with the aggregate dollar amount of the Preferred Shares
purchased at the Initial Closing would result in an aggregate dollar amount
exceeding (based on the end of day market capitalization of the Company (after
taking into effect the shares of capital stock of the Company to be issued in
the Merger, as defined below) on the consummation date of the Merger and after
also giving effect to the number of Common Shares that would be issuable if all
Preferred Shares were converted (taking into effect the applicable conversion
discount) on the consummation date of the Merger) more than 19.99% of aggregate
market capitalization (exclusive of warrants and options) of the Company. By way
of example only, if the aggregate market capitalization of the Company on such
trading day is $250,000,000, then the Investors will purchase the full
$35,000,000 worth of Preferred Shares at the Subsequent Closing; but if the
average market capitalization of the Company on such trading day is
$150,000,000, then the Investors shall not be required to purchase at the
Subsequent Closing more than an aggregate of $19,985,000 worth of Preferred
Shares, to be allocated pro rata among the Investors in accordance with their
investment percentages at the Initial Closing. The Company will not be obligated
to sell and the Investors will not be obligated to purchase, at the Initial
Closing or the Subsequent Closing, Preferred Shares (including, in the case of
the Subsequent Closing, the Preferred Shares purchased at the Initial Closing)
which represent the right to convert into (taking into effect the applicable
conversion discount), as of the Trading Day immediately preceding such dates,
20% or more of the number of outstanding shares of Common Stock outstanding on
the Trading Day immediately preceding the applicable Closing Date, unless
stockholder approval (excluding the votes of the holders of the Common Shares)
has been obtained.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company. The Company
hereby makes the following representations and warranties to each of the
Investors as of the date hereof and on each Closing Date:
(a) Organization and Qualification; Material Adverse Effect. The
Company is a corporation duly incorporated and validly existing in good standing
under the laws of the State of Delaware and has the requisite corporate power to
own its properties and to carry on its business as now being conducted. The
Company does not have any direct or indirect subsidiaries other than the
subsidiaries listed on Schedule 2.1(a) attached hereto. The Company and each of
its subsidiaries is duly qualified as a foreign corporation to do business and
is in good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, other than
those in which the failure so to qualify would not have a Material Adverse
Effect. "MATERIAL ADVERSE EFFECT" means any adverse effect on the business,
operations, properties, prospects, or financial condition of the entity with
respect to which such term is used and which is material to such entity and
other entities controlling or controlled by such entity taken as a whole, and
any material adverse effect on the transactions contemplated under this
Agreement, the Registration Rights Agreement or any other agreement or document
contemplated hereby or thereby.
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(b) Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform this Agreement, the
Warrants and the Registration Rights Agreement and to issue the Preferred Shares
in accordance with the terms hereof, (ii) the execution and delivery of this
Agreement, the Preferred Shares, the Warrants and the Registration Rights
Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including the issuance of the Preferred Shares
and the resolutions contained in the Certificate, have been duly authorized by
all necessary corporate action, and no further consent or authorization of the
Company or its Board of Directors (or any committee or subcommittee thereof) or
stockholders is required, (iii) this Agreement and the Registration Rights
Agreement have been, and the Warrants if and when issued will be, duly executed
and delivered by the Company, and (iv) this Agreement and the Registration
Rights Agreement constitute, and the Warrants if and when issued will
constitute, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of creditors' rights and remedies or by other equitable principles of general
application.
(c) Capitalization. As of the date hereof and the Initial Closing
Date, the authorized capital stock of the Company consists of 30,000,000 shares
of Common Stock and 3,000,000 shares of preferred stock; there are 12,495,291
shares of Common Stock and no shares of preferred stock issued and outstanding;
and 2,250,000 shares of Common Stock and no shares of preferred stock are
reserved for issuance to persons other than the Investors. As of the Subsequent
Closing, the authorized capital stock of the Company will consist of 150,000,000
shares of Common Stock and 10,000,000 shares of preferred stock; assuming no
exercise of outstanding options and warrants, there will be 58,283,453 shares of
Common Stock and 1,217,930 shares of preferred stock issued and outstanding,
exclusive of the securities purchased by the Investors; and 13,651,510 shares of
Common Stock and no shares of preferred stock will be reserved for issuance to
persons other than the Investors. All of the outstanding shares of the Company's
Common Stock and preferred stock have been validly issued and are fully paid and
nonassessable. Except as set forth in Schedule 2.1(c), no shares of capital
stock are entitled to preemptive rights; and there are as of the date hereof and
as of the Initial Closing Date, outstanding options for 1,085,900 shares of
Common Stock and no outstanding warrants for shares of Common Stock (excluding
the Warrants). Assuming no exercise of outstanding options and warrants, there
will be as of the Subsequent Closing Date, options for 9,417,920 shares of
Common Stock and outstanding warrants for 1,851,560 shares of Common Stock
(excluding the Warrants). The Company's issued and outstanding preferred stock
is, and the Company's preferred stock anticipated to be issued in the Merger
(other than the Series A Preferred Stock, the rights, privileges and number of
which are identified in the S-4, as hereinafter defined and as filed prior to
the date of this Agreement) will be, in all respects junior to the Preferred
Shares. There are no other scrip, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities or rights exchangeable or
convertible into, any shares of capital stock of the Company, or contracts,
commitments, understandings, or arrangements by which the Company is or may
become bound to issue additional shares of capital stock of the Company or
options, warrants, scrip, rights to subscribe to, or commitments to purchase or
acquire, any shares, or securities or rights convertible into shares, of capital
stock of the Company (except as contemplated by or as described in this
Agreement or disclosed in the Pre-Agreement SEC Documents (as defined below)).
Attached hereto as Exhibit 2.1(c)(i) is a true and correct copy of the Company's
Certificate of Incorporation (the "CHARTER"), as in effect on the date hereof,
and attached hereto as Exhibit 2.1(c)(ii) is a true and correct copy of the
Company's By-Laws, as in effect on the date hereof (the "BY-LAWS").
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(d) Issuance of Common Shares and Preferred Shares. The Common
Shares issuable upon conversion of the Preferred Shares pursuant to the
Certificate (the "UNDERLYING SHARES") are and (if the Warrants are issued) the
Common Shares issuable upon the exercise of the Warrants (the "WARRANT SHARES")
will be duly authorized and reserved for issuance and, upon such conversion in
accordance with the Certificate and/or exercise in accordance with the Warrants
(if the Warrants are issued) such Underlying Shares and Warrant Shares will be
validly issued, fully paid and non-assessable, free and clear of any and all
liens, claims and encumbrances, and listed for trading (when required to be
listed in accordance with the Registration Rights Agreement) on the Nasdaq
National Market ("Nasdaq NMS") (or the American Stock Exchange or the New York
Stock Exchange, collectively with the Nasdaq NMS, the "Approved Markets"), and
the holders of such Underlying Shares and Warrant Shares shall be entitled to
all rights and preferences accorded to a holder of Common Stock. The outstanding
shares of Common Stock are currently listed on the Nasdaq NMS. When issued in
accordance with this Agreement, the Preferred Shares will be validly issued,
fully paid and non-assessable, free and clear of any and all liens, claims and
encumbrances.
(e) No Conflicts. The execution, delivery and performance of this
Agreement, the Registration Rights Agreement and (upon their issuance) the
Warrants by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby and the filing of the Certificate do not and
will not (i) result in a violation of the Company's Charter or By-Laws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement
(including without limitation the Agreement and Plan of Reorganization between
the Company and Hayes Microcomputer Products, Inc. ("Hayes") dated as of July
29, 1997 ("Merger Agreement") providing for the merger of a subsidiary of the
Company with and into Hayes (the "Merger")), indenture, patent, patent license
or instrument to which the Company or any of its subsidiaries is a party or by
which any of them is bound, or result in a violation of any federal, state,
local or foreign law, rule, regulation, order, judgment or decree (including
Federal and state securities laws and regulations) applicable to the Company or
any of its subsidiaries or by which any property or asset of the Company or any
of its subsidiaries is bound or affected, or (iii) conflict with the terms of
the Series A Preferred Stock. The business of the Company and its direct and
indirect subsidiaries is being conducted in material compliance with all
applicable laws, ordinances or regulations of any governmental entity. The
Company is not required under Federal, state, local or foreign law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement, the
Registration Rights Agreement and the Certificate and the Warrants or issue and
sell the Preferred Stock in accordance with the terms hereof and issue the
Underlying Shares upon conversion thereof and issue the Warrant Shares on
exercise of the Warrants, except for the registration provisions provided in the
Registration Rights Agreement, provided that, for purposes of the representation
made in this sentence, the Company is assuming and relying upon the accuracy of
the relevant representations and agreements of the Investors herein.
(f) SEC Documents; Financial Statements. The Common Stock of the
Company is registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT") and the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission ("SEC") pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d), in addition to one or more registration statements and
amendments thereto heretofore filed by the Company with the SEC (all of the
foregoing including filings incorporated by reference therein and including
without limitation the Company's
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Registration Statement on Form S-4, as filed with the SEC on October 16, 1997,
registering shares of Common Stock and the Series A Preferred Stock to be issued
pursuant to the Merger Agreement (the "S-4") as (for purposes of the Subsequent
Closing only) the same may be amended as required by the rules and regulations
promulgated under the Exchange Act, being referred to herein as the "SEC
DOCUMENTS"). The Company has delivered or made available to the Investors true
and complete copies of all SEC Documents (including, without limitation, proxy
information and solicitation materials and registration statements) filed with
the SEC since its organization and all annual SEC Documents filed with the SEC
since its organization. None of the Company or Hayes or their representatives or
agents has provided to any Investor or its representatives or agents any
material non-public information or any information which, according to
applicable law, rule or regulation, should have been disclosed publicly by the
Company or Hayes but which has not been so disclosed. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act and the Securities Act of 1933, as amended (the "Act") and
the rules and regulations of the SEC promulgated thereunder and other federal,
state and local laws, rules and regulations applicable to such SEC Documents,
and none of the SEC Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Except as set forth on Schedule 2.1(f),
the SEC Documents contain all material information concerning the Company, and
no event or circumstance has occurred which would require the Company to
disclose such event or circumstance in order to make the statements in the SEC
Documents not misleading on the date hereof or on the applicable Closing Date
but which has not been so disclosed, except (for purposes of the Subsequent
Closing only) for completion and amendment of the S-4 and updating for events or
circumstances subsequent to the date of the financial statements included in the
S-4, all of which will be completed prior to the effective date of the S-4. The
financial statements of the Company included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).
(g) Principal Exchange/Market. The principal market on which the
Common Shares are currently traded is the Nasdaq NMS.
(h) No Material Adverse Change. Since July 31, 1997, no Material
Adverse Effect has occurred or exists, and no event or circumstance has occurred
that with notice or the passage of time or both is reasonably likely to result
in a Material Adverse Effect with respect to the Company or its subsidiaries.
For purposes of this Section 2.1(h), a Material Adverse Effect will not be
deemed to have occurred if (i) Hayes experiences, for the quarter ended
September 30, 1997, revenues of $50,000,000 and losses of $6,700,000 or (ii) the
Company or Hayes experiences losses (exclusive of extraordinary losses and
one-time charges) at a rate substantially similar to those experienced during
the period from January 1, 1997 to June 30, 1997. Except as disclosed on
Schedule 2.1(h), since July 31, 1997, the Company has not (i) incurred or become
subject to any material liabilities (absolute or contingent), except liabilities
incurred in the ordinary course of business consistent with past practices; (ii)
discharged or satisfied any material lien or encumbrance or
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paid any material obligation or liability (absolute or contingent), other than
current liabilities paid in the ordinary course of business consistent with past
practices; (iii) declared or made any payment or distribution of cash or other
property to stockholders with respect to its capital stock, or purchased or
redeemed, or made agreements to purchase or redeem, any shares of its capital
stock; (iv) sold, assigned or transferred any other tangible assets, or canceled
any debts or claims, except in the ordinary course of business consistent with
past practices; (v) suffered any substantial losses (except for losses not
constituting a Material Adverse Effect) or waived any rights of material value,
whether or not in the ordinary course of business, or suffered the loss of any
material amount of existing business; (vi) made any changes in employee
compensation, severance or change in control arrangements, except in the
ordinary course of business consistent with past practices; or (vii) experienced
any material problems, or received any threat of any material problems, with
labor or management in connection with the terms and conditions of their
employment.
(i) No Undisclosed Liabilities. The Company and its direct and
indirect subsidiaries have no liabilities or obligations not disclosed in the
SEC Documents that, individually or in the aggregate, are required to be
disclosed therein, other than those liabilities incurred in the ordinary course
of the Company's or its subsidiaries' respective businesses since July 31, 1997,
which liabilities, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company or its direct or indirect subsidiaries.
(j) No Undisclosed Events or Circumstances. No event or
circumstance has occurred or exists with respect to the Company or its direct or
indirect subsidiaries, taken as a whole, or their respective businesses,
properties, prospects, operations or financial condition, which, under
applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed.
(k) No General Solicitation. Neither the Company, nor any of its
affiliates, or, to its knowledge, any person acting on its or their behalf has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Act) in connection with the offer or sale of
the Preferred Shares, Underlying Shares, Warrant Shares or the Warrants.
(l) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor to its knowledge any person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would require
registration of the Preferred Shares, the Warrants or the Underlying Shares or
Warrant Shares, or of the issuance of such securities, under the Act. The
issuance of the Preferred Shares, Warrants, Underlying Shares or Warrant Shares
to the Investors will not be integrated with any other issuance of the Company's
securities (past, current or future) which requires stockholder approval under
the rules of the Nasdaq NMS.
(m) Intellectual Property. The Company (and/or its direct or
indirect subsidiaries) owns or has or will obtain without delay in the normal
course of business (as identified on Schedule 2.1(m)) valid and continuing
licenses to use all patents, copyrights and trademarks ("intellectual property")
used in its business. Except as disclosed on Schedule 2.1(m), the Company and
its subsidiaries (i) have all intellectual property rights which are needed to
conduct the business of the Company and its subsidiaries as it is now being
conducted and (ii) have or will obtain without delay all intellectual property
rights which will be needed to conduct the business of the Company and its
subsidiaries as proposed to be conducted as disclosed in the Pre-Agreement SEC
Documents. The Company and its subsidiaries have no reason to believe that
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the intellectual property rights which it owns are invalid or unenforceable or
that the use of such intellectual property by the Company or its subsidiaries
infringes upon or conflicts with any right of any third party, and neither the
Company nor any of its subsidiaries has received notice of any such infringement
or conflict, except for (as to the Subsequent Closing only) such of the
foregoing as is set forth in Schedule 2.1(m) and other similar matters, all of
which the Company reasonably believes are without merit or are immaterial. The
Company and its subsidiaries have no knowledge of any infringement of its
intellectual property by any third party, except for such infringement that the
Company intends to pursue actively or which the Company (in the exercise of its
reasonable commercial judgment) determines not to pursue. To the knowledge of
the Company, Hayes owns or has valid and continuing licenses to use all
intellectual property necessary to the conduct of the Hayes business as it is
now being conducted or proposed to be conducted as disclosed in the
Pre-Agreement SEC Documents. The Company knows of no actual or alleged
infringement relating to the intellectual property used by suppliers to the
Company or Hayes, except as described in detail on Schedule 2.1(m) or except as
is not reasonably likely to have a Material Adverse Effect.
(n) Shareholder Rights Plan. Neither the acquisition of Preferred
Shares or, if issued, Warrants nor the deemed beneficial ownership of shares of
Common Stock prior to, or the acquisition of such shares pursuant to, the
conversion of Preferred Shares or the exercise of the Warrants will in any event
under any circumstance trigger the poison pill provisions of any stockholders'
rights or similar agreements, or a substantially similar occurrence under any
successor or similar plan.
(o) No Litigation. Except as set forth in the SEC Documents
delivered or made available to the Investors prior to the date of this Agreement
("PRE-AGREEMENT SEC DOCUMENTS"), no litigation, investigation or claim
(including those for unpaid taxes) against the Company or any of its
subsidiaries is pending or, to the Company's knowledge, threatened, and no other
event has occurred, which if determined adversely could reasonably be expected
to have a Material Adverse Effect on the Company or could reasonably be expected
to materially and adversely effect the transactions contemplated hereby. The
legal proceedings described in the Pre-Agreement SEC Documents will not have an
effect on the transactions contemplated hereby, and will not have a Material
Adverse Effect on the Company.
(p) Brokers. The Company has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments by the Company or any Investor relating to this Agreement or
the transactions contemplated hereby, except for amounts owing to Palisades
Capital, Inc., which amounts shall be paid exclusively by the Company, pursuant
to a separate agreement.
(q) Acknowledgement of Dilution. The number of Common Shares
constituting Underlying Shares or Warrant Shares may increase substantially in
certain circumstances, including the circumstance where the trading price of the
Common Shares declines. The Company acknowledges that its obligation to issue
Underlying Shares upon conversion of Preferred Shares and Warrant Shares upon
exercise of the Warrants is absolute and unconditional, regardless of the
dilution that such issuance may have on other shareholders of the Company.
(r) Other Investors. Except as set forth on Schedule 2.1(r),
there are no outstanding securities issued by the Company that are entitled to
registration rights under the Act. Except as set forth in Schedule 2.1(r), there
are no outstanding securities issued by the Company that are directly or
indirectly convertible into, exercisable into, or exchangeable for, shares of
Common Stock of the Company, that have anti-dilution or similar rights that
would be affected by the issuance of the Preferred Shares or the Warrants.
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(s) Certain Transactions. Except as disclosed in the
Pre-Agreement SEC Documents and except for arm's length transactions pursuant to
which the Company or any of its direct or indirect subsidiaries makes payments
in the ordinary course of business upon terms no less favorable than the Company
or any of its direct or indirect subsidiaries could obtain from third parties,
none of the officers, directors, or employees of the Company is presently a
party to any transaction with the Company or any of its direct or indirect
subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
(t) Permits; Compliance. The Company and each of its direct and
indirect subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted
(collectively, the "COMPANY PERMITS"), and there is no action pending or, to the
knowledge of the Company, threatened regarding suspension or cancellation of any
of the Company Permits except for such Company Permits the failure of which to
possess, or the cancellation or suspension of which, would not, individually or
in the aggregate, have a Material Adverse Effect on the Company. Neither the
Company nor any of it direct or indirect subsidiaries is in material conflict
with, or in material default or material violation of, any of the Company
Permits. Since July 31, 1997, neither the Company nor any of its direct or
indirect Subsidiaries has received any notification with respect to possible
material conflicts, material defaults or material violations of applicable laws.
(u) Insurance. The Company and each of its direct and indirect
subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary for the businesses in which the Company and
its direct and indirect subsidiaries are engaged. Neither the Company nor any
such direct or indirect subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.
(v) Internal Accounting Controls. The Company and each of its
direct and indirect subsidiaries maintain a system of internal accounting
controls sufficient, in the judgment of the Company's board of directors, to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(w) Merger Agreement. The Merger Agreement is in full force and
effect and no amendments or modifications have been made to it, except for such
changes as shall be acceptable to each Investor in its reasonable discretion.
Neither the Company nor to the Company's best knowledge Hayes is in default
under the Merger Agreement, nor has either such party waived any performance
obligations of the other party under the Merger Agreement.
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(x) Merger Effect. Consummation of the Merger will not by itself
have adverse consequences for (i) the Company or its business or prospects, (ii)
the transactions contemplated by this Agreement, or (iii) the accuracy and
performance of the Company's representations, warranties, covenants or
agreements contained in this Agreement, the Registration Rights Agreement, the
Certificate or, if issued, the Warrants. Neither the Company nor Hayes has taken
any action that would give the other party a right to terminate the Merger
Agreement.
(y) Merger Diligence; Closing. Both the Company and Hayes have
completed their due diligence under the Merger Agreement and neither the
Company, nor to the Company's knowledge Hayes, has a current right or intention
to terminate or refuse to close under the Merger Agreement and consummate the
Merger. No conditions exist that will give either party a right to decline to
close the Merger Agreement, except as set forth on Schedule 2.1(y) hereto.
(z) Employment Agreements. All employment agreements constituting
a condition to the consummation of the Merger have been executed by all parties
thereto (and will be amended to eliminate certain discounted management options)
and will become effective immediately upon such consummation.
(aa) Form S-3. As of December 1, 1997, the Company will be
eligible to file the Registration Statement (as defined in the Registration
Rights Agreement) on Form S-3 under the Act and rules promulgated thereunder,
and Form S-3 is permitted to be used for the transactions contemplated hereby
under the Act and rules promulgated thereunder.
(bb) Hayes Merger Vote. The Company has no reason to believe that
the shareholders of Hayes will not approve the Merger at the shareholders
meeting scheduled for such purpose. The Voting Agreements dated as of July 29,
1997 (the "Voting Agreements") by and between the Company and, respectively,
Rinzai Limited, Vulcan Ventures Incorporated and Chestnut Capital Limited
Partnership, true and correct copies of which have been delivered to the
Investors, is in each case a valid and enforceable obligation of the parties
thereto, and no signatory can refuse to vote its Hayes shares in favor of the
Merger without breaching the terms of and becoming liable for the breach of such
Voting Agreements. The Company agrees not to amend, modify or terminate the
Voting Agreements, or to cause the other parties thereto to vote differently
from the manner required by the provisions of Section 2.1 of the Voting
Agreements.
(cc) Margin Accounts. At no time since July 31, 1997 has Ronald
Howard or Dennis Hayes maintained more than 15% of his Common Stock in a margin
account or placed more than 15% of his Common Stock in a situation which could
have resulted in an involuntary sale thereof.
Section 2.2 Representations and Warranties of the Investors. Each of
the Investors, severally (as to itself) and not jointly, hereby makes the
following representations and warranties to the Company as of the date hereof
and on the Closing Date:
(a) Authorization; Enforcement. (i) Such Investor has the
requisite power and authority to enter into and perform this Agreement and the
Registration Rights Agreement and to purchase the Preferred Shares being sold
hereunder and, if issued, to acquire the Warrant Shares, (ii) the execution and
delivery of this Agreement and the Registration Rights Agreement by such
Investor and the consummation by it of the
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transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate or partnership action, and (iii) this Agreement and the
Registration Rights Agreement constitute valid and binding obligations of such
Investor enforceable against such Investor in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application.
(b) No Conflicts. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement and, if issued, the performance
under the Warrants and the consummation by such Investor of the transactions
contemplated hereby and thereby do not and will not (i) result in a violation of
such Investor's organizational documents, or (ii) conflict with any agreement,
indenture or instrument to which such Investor is a party, or (iii) result in a
material violation of any law, rule, or regulation, or any order, judgment or
decree of any court or governmental agency applicable to such Investor. Such
Investor is not required to obtain any consent or authorization of any
governmental agency in order for it to perform its obligations under this
Agreement or the Registration Rights Agreement or, if issued, the Warrants.
(c) Investment Representation. Such Investor is purchasing the
Preferred Shares and, if issued will be acquiring the Warrants, for its own
account and not with a view to distribution in violation of any securities laws.
Such Investor has no present intention to sell the Preferred Shares, Warrants,
Underlying Shares or Warrant Shares and such Investor has no present arrangement
(whether or not legally binding) to sell the Preferred Shares, Warrants,
Underlying Shares or Warrant Shares to or through any person or entity;
provided, however, that by making the representations herein, such Investor does
not agree to hold the Preferred Shares, Warrants, Underlying Shares or Warrant
Shares for any minimum or other specific term and reserves the right to dispose
of the Preferred Shares, Warrants, Underlying Shares or Warrant Shares at any
time in accordance with Federal and state securities laws applicable to such
disposition.
(d) Accredited Investor. Such Investor is an "accredited investor"
as defined in Rule 501 promulgated under the Act. The Investor has such
knowledge and experience in financial and business matters in general and
investments in particular, so that such Investor is able to evaluate the merits
and risks of an investment in the Preferred Shares and to protect its own
interests in connection with such investment. In addition (but without limiting
the effect of the Company's representations and warranties contained herein),
such Investor has received such information as it considers necessary or
appropriate for deciding whether to purchase the Preferred Shares pursuant
hereto.
(e) Rule 144. Such Investor understands that there is no public
trading market for the Preferred Shares, that none is expected to develop, and
that the Preferred Shares must be held indefinitely unless such Preferred Shares
are converted or Underlying Shares are registered under the Act or an exemption
from registration is available. Such Investor has been advised or is aware of
the provisions of Rule 144 promulgated under the Act.
(f) Brokers. Such Investor has taken no action which would give
rise to any claim by any person for brokerage commissions, finder's fees or
similar payments by the Company relating to this Agreement or the transactions
contemplated hereby, except for amounts owing to Palisade Capital, Inc., which
amounts shall be paid by Company pursuant to a separate agreement.
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(g) Reliance by the Company. Such Investor understands that the
Preferred Shares are being offered and sold and the Underlying Shares, Warrants
(if issued) and Warrant Shares will be issued in reliance on a transactional
exemption from the registration requirements of Federal and state securities
laws and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
such Investor set forth herein in order to determine the applicability of such
exemptions and the suitability of such Investor to acquire the Preferred Shares
and Warrants and Warrant Shares.
ARTICLE III
COVENANTS
Section 3.1 Registration and Listing; Effective Registration. Until the
earlier of such time as no Preferred Shares or Warrants are outstanding and the
Investors cease to own any Underlying Shares or Warrant Shares or the Mandatory
Conversion Date (as defined in the Certificate (as extended) has occurred), the
Company will cause the Common Stock to continue at all times to be registered
under Section 12(g) of the Exchange Act, will comply in all material respects
with its reporting and filing obligations under the Exchange Act, and will not
take any action or file any document (whether or not permitted by the Exchange
Act or the rules thereunder) to terminate or suspend such reporting and filing
obligations. Until such time as no Preferred Shares or Warrants are outstanding
and the Investors cease to own any Underlying Shares or Warrant Shares, the
Company shall continue the listing and trading of the Common Stock on the Nasdaq
NMS or one of the other Approved Markets and comply in all material respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of the Approved Market on which the Common Stock is listed. The Company
shall cause the Underlying Shares and the Warrant Shares to be listed on the
Nasdaq NMS no later than the registration of the Underlying Shares or the
Warrant Shares, respectively, under the Act, and shall continue such listing(s)
on one of the Approved Markets in accordance with the Company's obligations
under the Registration Rights Agreement. As used herein and in the Registration
Rights Agreement, the Certificate, and the Warrants, the term "EFFECTIVE
REGISTRATION" shall mean that all obligations under this Section 3.1 have been
satisfied, all registration obligations of the Company pursuant to the
Registration Rights Agreement and this Agreement have been satisfied, such
registration is not subject to any suspension or stop order, the prospectus for
the Underlying Shares issuable upon conversion of the Preferred Shares and the
Warrant Shares issuable upon exercise of the Warrants is current and such Common
Shares are listed for trading on one of the Approved Markets and such trading
has not been suspended for any reason (other than a general suspension of
trading on the applicable Approved Market for a period of not more than two
Trading Days), and none of the Company or any direct or indirect subsidiary of
the Company is subject to any bankruptcy, insolvency or similar proceeding.
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Section 3.2 Certificates, on Conversion and Warrants on Exercise.
(a) Upon any conversion by an Investor (or then holder of
Preferred Shares) of the Preferred Shares pursuant to the Certificate, the
Company shall issue and deliver to such Investor (or holder) within three (3)
business days of the Conversion Date (as defined in the Certificate) a new
certificate or certificates for the number of Preferred Shares which such
Investor (or holder) has not yet elected to convert but which are evidenced in
part by the certificate(s) submitted to the Company in connection with such
conversion (with the number of and denomination of such new certificate(s)
designated by such Investor or holder).
(b) Upon any partial or full optional redemption by the Company of
the Preferred Shares pursuant to Section 4(e) of the Certificate, the Company
shall issue and deliver to such Investor (or the holder of Preferred Shares) the
number of Warrants for each Preferred Share so redeemed as is specified in the
Certificate.
(c) Upon any partial exercise by an Investor (or then holder of
the Warrants) of the Warrants, the Company shall issue and deliver to such
Investor (or holder) within three (3) business days of the date on which such
Warrants are exercised, a new Warrant or Warrants representing the number of
adjusted Warrant Shares, in accordance with the terms of Section 2 of the
Warrants.
(d) In lieu of delivering physical certificates representing the
Common Stock issuable upon conversion of Preferred Shares or exercise of
Warrants, provided the Company's transfer agent is participating in the
Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the Investor (or then holder), the Company shall use
its best efforts to cause its transfer agent to electronically transmit the
Common Stock issuable upon conversion or exercise to the Investor (or then
holder), by crediting the account of Investor's (or then holder's) prime broker
with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The
time periods for delivery described in the immediately preceding paragraphs
shall apply to the electronic transmittals described herein.
Section 3.3 Replacement Certificates and Warrants.
(a) The certificate(s) representing the Preferred Shares held by
any Investor (or then holder) may be exchanged by such Investor (or such holder)
at any time and from time to time for certificates with different denominations
representing an equal aggregate number of Preferred Shares, as requested by such
Investor (or such holder) upon surrendering the same. No service charge will be
made for such registration or transfer or exchange.
(b) The Warrants, if issued, will be exchangeable at the option of
the Investor (or then holder of the Warrants) at the office of the Company for
other Warrants of different denominations entitling the holder thereof to
purchase in the aggregate the same number of Warrant Shares as are purchasable
under such Warrants. No service charge will be made for such transfer or
exchange.
Section 3.4 Expenses. The Company shall pay, at the Closing and
promptly upon receipt of any further invoices relating to same, all reasonable
due diligence fees and expenses and reasonable attorneys' fees and expenses of
KKWC, up to a maximum amount (inclusive of the Subsequent Closing) of $30,000
(which shall be reduced to $10,000 in the event the Initial Closing fails to
occur solely as a result of Investor
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dissatisfaction with due diligence or the occurrence of an event which has or is
reasonably likely to have a Material Adverse Effect on the Company or its
subsidiaries), incurred by the Investors in connection with the preparation,
negotiation, execution and delivery of this Agreement, the Registration Rights
Agreement, the Certificate, the Warrants and the related agreements and
documents and the transactions contemplated hereunder and thereunder. At
Closing, the Company shall pay the amount due for such fees and expenses (which
may include fees and expenses estimated to be incurred for completion of the
transaction, including post-closing matters). In the event such amount is
ultimately less than the actual fees and expenses, the Company shall promptly
pay such deficiency (up to the aggregate maximum of $30,000) upon receipt of an
invoice regarding same.
Section 3.5 Securities Compliance. The Company shall notify the SEC and
the Nasdaq NMS, in accordance with their requirements, of the transactions
contemplated by this Agreement, the Certificate, the Registration Rights
Agreement and the Warrants, and shall take all other necessary action and
proceedings as may be required and permitted by applicable law, rule and
regulation, for the legal and valid issuance of the Preferred Shares hereunder,
the Common Shares issuable upon conversion thereof, the Warrants upon the
optional redemption of Preferred Shares by the Company, and the Warrant Shares
issuable upon exercise of the Warrants.
Section 3.6 Dividends or Distributions. So long as any Preferred Shares
remain outstanding, the Company agrees that it shall not (a) declare or pay any
dividends or make any distributions to any holder or holders of Common Stock or
other equity security junior to the Preferred Shares ("Junior Security"), or (b)
purchase or otherwise acquire for value, directly or indirectly, any Common
Stock or other Junior Security of the Company or other equity security on parity
with the Preferred Shares.
Section 3.7 Notices. The Company agrees to provide all holders of
Preferred Shares and Warrants with copies of all notices and information,
including without limitation notices and proxy statements in connection with any
meetings, that are provided to the holders of shares of Common Stock,
contemporaneously with the delivery of such notices or information to such
Common Stock holders.
Section 3.8 Use of Proceeds. The Company agrees that the proceeds
received by the Company from the sale of the Preferred Shares hereunder shall be
used for reduction of indebtedness (but not indebtedness owed, directly or
indirectly, to any director, officer or employee (or any family member thereof),
or to any affiliate) and working capital purposes, as well as, in respect of the
proceeds of the Subsequent Closing only, the purchase of Hayes Convertible
Notes.
Section 3.9 Right of First Offer. Until the expiration of twelve (12)
months from the Initial Closing Date, the Company shall not offer, sell,
contract to sell or otherwise issue or deliver or dispose of any Common Stock or
other equity securities or any securities which are convertible into or
exchangeable for its Common Stock or other equity securities or any convertible
security, or any warrants or other rights to subscribe for or to purchase or any
options for the purchase of Common Stock or other equity securities (other than
(i) in a bona-fide public offering conducted on the basis of a firm underwriting
(ii) shares or options issued or which may be issued pursuant to the Company's
or Hayes' employee or director option plans or shares issued upon exercise of
options, warrants or rights outstanding on the Initial Closing Date listed in
the Pre-Agreement SEC Documents (iii) securities issued to Hayes shareholders
pursuant to Merger Agreement (iv) in connection with a merger or other business
combination, (v) in a transaction in which principal consideration other than
cash is delivered, (vi) as part of a joint venture, or (vii) as part of an arm's
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length financing arrangement with a commercial lender in which such commercial
lender receives, as additional but not primary consideration, warrants with a
fixed strike price that is subject only to customary and bona fide anti-dilution
provisions), unless such offer, sale, issuance or financing ("FINANCING
TRANSACTION") is first offered pro-rata to the Investors on the same terms to be
offered to non-Investors. The Company shall make such offer by providing each
Investor with written notice of the Company's intention to enter into the
Financing Transaction together with a term sheet containing the economic terms
and significant provisions of the Financing Transaction and any other
information reasonably requested by the Investors (the "OFFER"). Such Offer
shall be given with respect to each Financing Transaction contemplated by the
Company. The Investors shall have ten (10) business days from receipt of the
Offer to deliver a written notice to the Company that the Investors wish to
accept the Offer in whole (subject to satisfactory due diligence and reasonably
acceptable definitive documentation) for the Financing Transaction. If the
Investors do not accept the Offer in its entirety or fail to respond within such
ten (10) business day period, then the Company shall be permitted to complete
such Financing Transaction without the Investors on terms and conditions
substantially identical to those contained in the Offer. If any Financing
Transaction is contemplated on terms and conditions not substantially identical
to those contained in the Offer or with proposed definitive documentation not
those proposed by the Company with respect to the Offer, then such Financing
Transaction shall be deemed a new Financing Transaction and the Investors shall
again be entitled to receive an Offer for such Financing Transaction on such new
terms and conditions (and/or with such new definitive documentation if
applicable). As among the Investors, each Investor shall have the right to
participate in the Offer in whole, up to the full extent of the Offer, provided
that if such Offer is oversubscribed by the Investors, each Investor shall only
be entitled to participate in the Offer up to its pro rata share.
Section 3.10 Reservation of Stock Issuable Upon Conversion and Upon
Exercise of the Warrants. The Company shall at all times reserve and keep
available out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Shares and the exercise of
the Warrants, such number of shares of its Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding Preferred Shares
and the full exercise of the Warrants, 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 the then outstanding Preferred Shares and the full
exercise of the Warrants (if then issued), the Company will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued Common Stock to such number of shares as shall be
sufficient for such purpose, including without limitation engaging in best
efforts to obtain the requisite shareholder approval. Without in any way
limiting the foregoing, the Company agrees to reserve and at all times keep
available solely for purposes of conversion of Preferred Shares and the exercise
of the Warrants such number of authorized but unissued Common Shares that is at
least equal to 200% of the aggregate shares issuable upon exercise of Preferred
Shares, and 100% of the aggregate shares issuable on exercise of Warrants, which
number may be reduced by the number of Common Shares actually delivered pursuant
to conversion of Preferred Shares under the Certificate or exercise of the
Warrants, and shall be appropriately adjusted for any stock split, reverse
split, stock dividend or reclassification of the Common Stock.
Section 3.11 Limitations on Offerings. The Company shall not offer or
sell any equity securities, or any securities convertible into or exchangeable
or exercisable for equity securities, during the three (3) month period
commencing with the Initial Closing Date, except as part of the Merger with
Hayes on substantially the terms described in the S-4 as filed prior to the date
of this Agreement and except for shares or options issued or issuable pursuant
to the Company's or Hayes' employee or director option plans.
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Section 3.12 Best Efforts. The parties shall use their best efforts to
satisfy timely each of the conditions described in Article IV of this Agreement.
Section 3.13 Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Preferred Shares, Warrants, Underlying Shares and Warrant
Shares, as required under Regulation D and to provide a copy thereof to each
Investor promptly after such filing. The Company shall, on or before each
Closing Date, take such action as the Company shall have reasonably determined
is necessary to qualify the Preferred Shares, Warrants, Underlying Shares and
Warrant Shares for sale to the Investors at the applicable Closing pursuant to
this Agreement under applicable securities or "blue sky" laws of the states of
the United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to each Investor on or prior to the
applicable Closing Date.
Section 3.14 No Senior Securities; Series A Preferred. So long as any
Preferred Shares remain outstanding, the Company agrees that neither the Company
nor any direct or indirect subsidiary of the Company shall, without prior
written approval by seventy-five percent in interest of the holders of
outstanding Preferred Shares, (i) issue any shares of its preferred stock (other
than the Series A Preferred Stock) or any securities convertible into its
preferred stock except for preferred stock which is junior to the Preferred
Shares in all respects, or (ii) increase the authorized or issued number of, or
change in any manner adverse to the Investors the rights, privileges and
preferences of, the Series A Preferred Stock.
Section 3.15 Consummation of the Merger. The Company will use its best
efforts to cause the Merger to be consummated without delay.
Section 3.16 Vote Calculations. For purposes of determining the
applicable percentage of holders in favor of any waivers, consents, amendments
or votes undertaken in connection with this Agreement, the Certificate, the
Registration Rights Agreement or the Warrants between the date of this Agreement
and the Subsequent Closing Date, the percentage vote or consent will be
calculated as a fraction, the denominator of which will equal the sum of (A) the
Liquidation Preference of all unconverted and outstanding Preferred Shares plus
(B) the aggregate of all Investors' commitment (i.e., $35,000,000) to purchase
Preferred Shares at the Subsequent Closing without reference to the 19.99%
Limitation described in Section 1.1(c) (the "Maximum Commitment"), and the
numerator of which will equal the sum of (C) the aggregate Liquidation
Preferences of all outstanding and unconverted Preferred Shares being voted in
favor of such measure plus (D) the Maximum Commitment being voted in favor of
such measure. By way of example, if a 75% vote was needed under circumstances in
which Preferred Shares with a total Liquidation Preference of $5,000,000
remained unconverted and outstanding (such that the denominator described above
was $40,000,000), the votes of holders of Preferred Shares with Liquidation
Preferences and/or Maximum Commitments of $30,000,000 in the aggregate would
need to vote in favor of a measure for it to pass.
Section 3.17 S-3 Eligibility. The Company will do all things reasonably
necessary to become and remain eligible to use Form S-3, and will do nothing and
will not allow anything in its control to be done to interfere with such
eligibility.
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ARTICLE IV
CONDITIONS TO CLOSINGS
Section 4.1 Conditions Precedent to the Obligation of the Company to
Sell the Preferred Shares. The obligation hereunder of the Company to issue
and/or sell the Preferred Shares to the Investors at each of the Initial Closing
and the Subsequent Closing (unless otherwise specified) is subject to the
satisfaction, at or before the applicable Closing, of each of the applicable
conditions set forth below. These conditions are for the Company's sole benefit
and may be waived in a writing by the Company at any time in its sole
discretion.
(a) Accuracy of the Investors' Representations and Warranties. The
representations and warranties of each Investor will be true and correct as to
representations and warranties having a materiality standard and true and
correct in all material respects as to representations and warranties not having
a materiality standard as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties made solely
as of an earlier date, if any, which will be true and correct as to
representations and warranties having a materiality standard and true and
correct in all material respects as to representations and warranties not having
a materiality standard as of such date).
(b) Performance by the Investors. Each Investor shall have
performed all agreements and satisfied all conditions required to be performed
or satisfied by such Investor at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Registration Rights Agreement or the Certificate or the
Warrants.
(d) Full Subscription. All Preferred Shares purchasable at the
applicable Closing shall have been purchased in the aggregate by the Investors
pursuant to this Agreement and the Company shall have received in an account
designated by the Company, in immediately available funds, the full proceeds
therefrom.
Section 4.2 Conditions Precedent to the Obligation of the Investors to
Purchase the Preferred Shares. The obligation hereunder of each Investor to
acquire and pay for the Preferred Shares at each of the Initial Closing and the
Subsequent Closing (unless otherwise specified) is subject to the satisfaction,
at or before the applicable Closing, of each of the applicable conditions set
forth below. These conditions are for each Investor's benefit and may be waived
in a writing by each Investor at any time in its sole discretion.
(a) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company shall be true and correct as to
representations and warranties having a materiality standard and true and
correct in all material respects as to representations and warranties not having
a materiality standard as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties made solely
as of an earlier date, if any, which shall be true and correct as to
representations and warranties having a materiality standard and true and
correct in all material respects as to representations and warranties not having
a materiality standard as of such date).
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(b) Performance by the Company. The Company shall have performed
all agreements and satisfied all conditions required to be performed or
satisfied by the Company at or prior to the Closing.
(c) Nasdaq NMS. From the date hereof to the applicable Closing
Date, trading in the Common Stock shall not have been suspended by the SEC or
the Nasdaq NMS (or other Approved Market), and the Common Stock shall not have
been delisted from the Nasdaq NMS (or any other Approved Market where they are
currently listed).
(d) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Registration Rights Agreement or the Certificate or the
Warrants.
(e) Opinion of Counsel. At the Closing, the Investors shall have
received an opinion of counsel to the Company in the form attached hereto as
Exhibit 4.2(e) and such other opinions, certificates and documents as the
Investors or their counsel shall reasonably require incident to the Closing.
(f) Registration Rights Agreement. The Company and the Investors
shall have executed and delivered the Registration Rights Agreement in the form
and substance of Exhibit 4.2(f) attached hereto.
(g) Material Adverse Changes. Since July 31, 1997, no event which
had or is likely to have a Material Adverse Effect on the Company or its direct
or indirect subsidiaries taken as a whole shall have occurred. For purposes of
this 4.2(g), a Material Adverse Effect will not be deemed to have occurred if
(i) Hayes experiences, for the quarter ended September 30, 1997, revenues of
$50,000,000 and losses of $6,700,000 or (ii) the Company or Hayes experiences
losses (exclusive of extraordinary losses and one-time charges) at a rate
substantially similar to those experienced during the period from January 1,
1997 to June 30, 1997. In the case of the Subsequent Closing only, there shall
not have occurred after the Merger a Material Adverse Effect to the Company,
Hayes and their direct and indirect subsidiaries as compared to their
operations, conditions or prospects or their anticipated combined operations,
conditions or prospects prior to the Merger as anticipated as of the date
hereof.
(h) Officer's Certificate. The Company shall have delivered to the
Investors a certificate in form and substance satisfactory to the Investors and
the KKWC, executed by an officer of the Company, certifying as to satisfaction
of closing conditions, incumbency of signing officers, and the true, correct and
complete nature of the Charter, By-Laws, good standing and authorizing
resolutions of the Company.
(i) Certificates. The Investors shall have received certificates
representing the Preferred Shares in the form and substance of Exhibit 1.1A
hereto, without any changes subsequent to the date of this Agreement.
(j) Extension of Merger. In the case of the Initial Closing only,
the Investors shall have received (for their benefit and reliance) an agreement
executed by both the Company and Hayes extending the automatic termination date
of the Merger until at least March 1, 1998, which agreement shall have been
approved by the Board of Directors of Hayes or the Transaction Committee thereof
established on July 28, 1997.
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<PAGE> 19
(k) Consummation of Merger. In the case of the Subsequent Closing
only, the Merger shall have been consummated on or before March 1, 1998, on the
terms set forth in the S-4 filed prior to the date of this Agreement, with only
such changes as are acceptable to each of the Investors in its reasonable
discretion.
(l) Certificate. The Certificate shall have been accepted for
filing by the Secretary of State of the State of Delaware and a stamped copy
thereof shall have been provided to KKWC. No changes shall have been made to the
Certificate subsequent to the date of this Agreement.
(m) Continued Compliance. In the case of the Subsequent Closing
only, the Company shall remain in continued compliance with all its obligations
under this Agreement, the Registration Rights Agreement, the Certificate, the
Warrants, and any document, certificate or instrument incidental or ancillary to
any thereof.
(n) Due Diligence. Each Investor shall have completed its
financial, accounting, operational and legal due diligence in a manner
satisfactory to such Investor in its sole discretion. As to the Subsequent
Closing only, the Investors may use this Section 4.2(n) solely to confirm the
satisfaction of the conditions to the Subsequent Closing.
(o) Outside Closing Date. The Subsequent Closing shall have
occurred no later than March 10, 1998.
ARTICLE V
LEGEND AND STOCK
The Company will issue one or more certificates representing the
Preferred Shares in the name of the Investor and in such denominations to be
specified by the Investor prior to (or from time to time subsequent to) Closing.
Each certificate representing the Preferred Shares and, if issued, the Warrants
and any shares of Common Stock issued upon conversion or exercise thereof shall
be stamped or otherwise imprinted with a legend substantially in the following
form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR
OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW
OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
The Company agrees to reissue Preferred Shares and Warrants without the
legend set forth above at such time as (i) the holder thereof is permitted to
dispose of such Preferred Shares and/or Warrants and Common Stock issuable upon
conversion or exercise thereof pursuant to Rule 144(k) under the Act, or (ii)
such Preferred Shares and/or Warrants are sold to a purchaser or purchasers who
(in the opinion of counsel to the seller or such purchaser(s), in form and
substance reasonably satisfactory to the Company and its counsel) are able to
dispose of such shares publicly without registration under the Act.
19
<PAGE> 20
Prior to the Registration Statement (as defined in the Registration
Rights Agreement) being declared effective, any Common Shares issued pursuant to
conversion of Preferred Shares or exercise of the Warrants shall bear a legend
in the same form as the legend indicated above. Upon such Registration Statement
becoming effective, the Company agrees to promptly, but no later than three (3)
business days thereafter, issue new certificates representing such Common Shares
without such legend. Any Common Shares issued pursuant to conversion of
Preferred Shares or exercise of the Warrants after the Registration Statement
has become effective shall be free and clear of any legends, transfer
restrictions and stop orders. Notwithstanding the removal of such legend, each
Investor agrees to sell the Common Shares represented by the new certificates in
accordance with the applicable prospectus delivery requirements, provided that
adequate copies of a current prospectus are made available to the Investors.
Nothing herein shall limit the right of any holder to pledge these
securities pursuant to a bona fide margin account or lending arrangement.
ARTICLE VI
TERMINATION
Section 6.1 Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing by the mutual written consent of the
Company and each of the Investors.
Section 6.2 Other Termination. This Agreement may be terminated by
action of the Board of Directors of the Company or by any of the Investors at
any time if the Initial Closing shall not have been consummated by the fifth
business day following the date of this Agreement; provided, however, that the
party (or parties) prepared to close shall retain its (or their) right to sue
for any breach by the other party (or parties).
ARTICLE VII
MISCELLANEOUS
Section 7.1 Stamp Taxes. The Company shall pay all stamp and other
taxes and duties levied in connection with the issuance of the Preferred Shares
pursuant hereto and the Common Shares issued upon conversion thereof or upon
exercise of the Warrants.
Section 7.2 Specific Performance; Consent to Jurisdiction; Jury Trial.
(a) The Company and the Investors acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce
20
<PAGE> 21
specifically the terms and provisions hereof, this being in addition to any
other remedy to which any of them may be entitled by law or equity.
(b) THE COMPANY AND EACH OF THE INVESTORS (I) HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT, THE
NEW YORK STATE COURTS AND OTHER COURTS OF THE UNITED STATES SITTING IN NEW YORK
COUNTY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES NOT TO
ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER. THE COMPANY AND EACH OF THE INVESTORS 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 IN THIS PARAGRAPH SHALL AFFECT OR
LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE
LAW.
(c) THE COMPANY AND EACH INVESTOR HEREBY WAIVES ALL RIGHTS TO A
TRIAL BY JURY.
Section 7.3 Entire Agreement; Amendment. This Agreement (including the
Schedules and Exhibits hereto), together with the Registration Rights Agreement,
the Warrants, the Certificate and the agreements and documents executed in
connection herewith and therewith, contains the entire understanding of the
parties with respect to the matters covered hereby and thereby and, except as
specifically set forth herein or therein, neither the Company nor any Investor
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be waived or amended other than by a
written instrument signed by the party against whom enforcement of any such
amendment or waiver is sought.
Section 7.4 Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing by mail, facsimile or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Access Beyond, Inc.
1300 Quince Orchard Blvd.
Gaithersburg, Maryland 20878
Attention: Chief Financial Officer
Facsimile: (301) 921-9149
with copies to:
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
Attention: Stephen I. Budow, Esq.
Facsimile: (212) 735-8708
21
<PAGE> 22
to the Investors:
To each Investor at the address and/or fax number set
forth on Schedule I of this Agreement.
with copies to:
Kleinberg, Kaplan, Wolff & Cohen, P.C
551 Fifth Avenue, 18th Floor
New York, New York 10176
Attention: Stephen M. Schultz, Esq.
Facsimile: (212) 986-8866
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
Section 7.5 Indemnity. Each party shall indemnify each other party
against any loss, cost, claim or damages (including reasonable attorneys' fees
and disbursements but excluding consequential damages) incurred as a result of
such parties' breach of any representation, warranty, covenant or agreement in
this Agreement.
Section 7.6 Waivers. No waiver by any party of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
Section 7.7 Headings. The headings herein are for convenience only, do
not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
Section 7.8 Successors and Assigns. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The parties hereto may amend
this Agreement in a writing signed by all such parties without notice to or the
consent of any third party. The Company may not assign this Agreement or any
rights or obligations hereunder without the prior written consent of all
Investors (which consent may be withheld for any reason in their sole
discretion), except that the Company may assign this Agreement in connection
with the sale of all or substantially all of its assets provided that the
Company is not released from any of its obligations hereunder, such assignee
assumes all obligations of the Company hereunder, and appropriate adjustment of
the provisions contained in this Agreement, the Registration Rights Agreement,
the Certificate and the Warrants is made, in form and substance satisfactory to
the Investors, to place the Investors in the same position as they would have
been but for such assignment, in accordance with the terms of the Certificate
and the Warrants. Any Investor may assign this Agreement (in whole or in part)
or any rights or obligations hereunder without the consent of the Company in
connection with any permitted sale or transfer all or any portion of the
Preferred Shares or Warrants held by such Investor, provided that no Investor
may assign this
22
<PAGE> 23
Agreement prior to the Subsequent Closing Date without the Company's prior
written consent except to an affiliate or affiliates of such Investor or to one
of the other Investors or an affiliate of such other Investor.
Section 7.9 No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
Section 7.10 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to contracts executed and to be performed entirely within such state.
Section 7.11 Survival. The representations and warranties and the
agreements and covenants of the Company and each Investor contained herein shall
survive each Closing.
Section 7.12 Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, it
being understood that all parties need not sign the same counterpart.
Section 7.13 Publicity. The Company agrees that it will not disclose,
and will not include in any public announcement, the name of any Investor
without its consent, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such requirement. The
Company agrees that it will deliver a copy of any public announcement regarding
the matters covered by this Agreement or any agreement and document executed
herewith to each Investor and any public announcement including the name of an
Investor to such Investor, prior to the release of such announcements.
Section 7.14 Severability. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
Section 7.15 Like Treatment of Holders; Redemption. Neither the Company
nor any of its affiliates shall, directly or indirectly, pay or cause to be paid
any consideration (immediate or contingent), whether by way of interest, fee,
payment for the redemptions or exchange of Preferred Shares, or otherwise, to
any holder of Preferred Shares, for or as an inducement to, or in connection
with the solicitation of, any vote, consent, waiver or amendment of any terms or
provisions of the Certificate or this Agreement or the Registration Rights
Agreement or the Warrants, unless such consideration is required to be paid to
all holders of Preferred Shares bound by such vote, consent, waiver or amendment
whether or not such holders so consent, vote, waive or agree to amend and
whether or not such holders tender their Preferred Shares for redemption or
conversion. The Company shall not, directly or indirectly, redeem any Preferred
Shares or provide other consideration to the holders thereof unless such offer
of redemption or consideration is made pro rata to all holders of Preferred
Shares on identical terms. The Company will provide each holder of Preferred
Shares with 6 Trading Days' advance written notice of any vote, consent, waiver
or amendment, whether or not involving such redemption or consideration.
23
<PAGE> 24
Section 7.16 No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties t o express
their mutual intent, and no rules of strict construction will be applied against
any party.
[SIGNATURE PAGE FOLLOWS]
24
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ACCESS BEYOND, INC.
By: /s/ Ronald A. Howard
__________________________________________
Name:
Title:
INVESTORS:
ELLIOTT ASSOCIATES, L.P.
By: /s/ Paul E. Singer
__________________________________________
Paul E. Singer
General Partner
WESTGATE INTERNATIONAL, L.P.
By: /s/ Paul E. Singer
__________________________________________
Paul E. Singer
President
Martley International, Inc.
Attorney-in-Fact for
Westgate International, L.P.
MONTROSE INVESTMENTS LTD.
By: /s/
__________________________________________
Name:
Title:
WESTOVER INVESTMENTS, L.P.
By: /s/
__________________________________________
Name:
Title:
25
<PAGE> 26
STARK INTERNATIONAL
By: /s/
__________________________________________
Name:
Title:
SHEPHERD INVESTMENTS INTERNATIONAL,
LTD.
By: /s/
__________________________________________
Name:
Title:
RAMIUS FUND, LTD.
By: AG. RAMIUS PARTNERS, L.L.C.,
Investment Manager
By: /s/ Michael L. Gordon
__________________________________________
Name: Michael L. Gordon
Title: Managing Officer
GAM ARBITRAGE INVESTMENTS, INC.
By: ANGELO, GORDON & CO., L.P.,
Investment Manager
By: /s/ Michael L. Gordon
__________________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
LEONARDO, L.P.
By: ANGELO, GORDON & CO., L.P.,
General Partner
By: /s/ Michael L. Gordon
__________________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
26
<PAGE> 27
RAPHAEL, L.P.
By: /s/ Michael L. Gordon
__________________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
AG SUPER FUND INTERNATIONAL PARTNERS,
L.P.
By: ANGELO, GORDON & CO., L.P., General Partner
By: /s/ Michael L. Gordon
__________________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
27
<PAGE> 28
EXHIBITS AND SCHEDULES
Schedule I List of Investors
Exhibit 1.1A Form of Certificate of Designations
Exhibit 1.1B Form of Warrant
Schedule 2.1(a) List of Subsidiaries
Exhibit 2.1(c)(i) Certificate of Incorporation of the Company
Exhibit 2.1(c)(ii) By-Law of the Company
Schedule 2.1(f) Updates to SEC Documents
Schedule 2.1(m) Intellectual Property Infringement of Suppliers
Schedule 2.1(r) Outstanding Securities Subject to Registration Rights,
etc.
Schedule 2.1(y) Unsatisfied Closing Conditions to the Merger
Exhibit 4.2(e) Opinion of Company Counsel
Exhibit 4.2(f) Registration Rights Agreement
<PAGE> 29
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF PREFERRED RESTRICTED
SHARES PURCHASE PRICE OWNERSHIP
INVESTOR INITIAL/SUBSEQUENT INITIAL/SUBSEQUENT PERCENTAGE
- -------- ------------------ ------------------ ----------
<S> <C> <C> <C>
1. Elliott Associates, L.P. 1,667/5,833 $1,667,000/$5,833,000 4.9%
c/o N/A
Tax I.D. No.: 22-2140975
Telephone: (212) 506-2999
Facsimile: (212) 974-2092
2. Westgate International, L.P. 1,667/5,833 $1,667,000/$5,833,000 4.9%
c/o Stonington Management
Corporation
Tax I.D. No.: N/A
Telephone: (212) 506-2999
Facsimile: (212) 974-2092
3. Raphael, L.P. 200/700 $200,000/$700,000 9.9%
c/o Angelo, Gordon & Co., L.P.
Attn: Gary Wolf
Tax I.D. No.: N/A
Telephone: (212) 692-2058
Facsimile: (212) 867-6449
4. GAM Arbitrage Investments, Inc. 100/350 $100,000/$350,000 9.9%
c/o Angelo, Gordon & Co., L.P.
Attn: Gary Wolf
Tax I.D. No.: N/A
Telephone: (212) 692-2058
Facsimile: (212) 867-6449
</TABLE>
Note: The Restricted Ownership Percentage shall apply in the aggregate to
each of the following four subdivisions: (1) Elliott and Westgate; (2)
Westover and Montrose; (3) Raphael, Leonardo, Ramius, GAM and AG Super
Fund; and (4) Shepherd and Stark.
<PAGE> 30
<TABLE>
<S> <C> <C> <C>
5. AG Super Fund International Partners, 100/350 $100,000/$350,000 9.9%
L.P.
c/o Angelo, Gordon & Co., L.P.
Attn: Gary Wolf
Tax I.D. No.: N/A
Telephone(212) 692-2058
Facsimile(212) 867-6449
6. Leonardo, L.P. 1,522/5,327 $1,522,000/$5,327,000 9.9%
c/o Angelo, Gordon & Co., L.P.
Attn: Gary Wolf
Tax I.D. No.: 98-0120439
Telephone(212) 692-2058
Facsimile(212) 867-6449
7. Ramius Fund, Ltd. 300/1,050 $300,000/$1,050,000 9.9%
c/o Angelo, Gordon & Co., L.P.
Attn: Gary Wolf
Tax I.D. No.: N/A
Telephone(212) 692-2058
Facsimile(212) 867-6449
8. Shepherd Investments International, 1,111/3,889 $1,111,000/$3,889,000 9.9%
Ltd.
c/o Staro Asset Management
1500 W. Market Street
Suite 200
Mequon, WI 53092
Tax I.D. No.: N/A
Telephone(414) 241-7728 x. 15
Facsimile(414) 241-1888
</TABLE>
Note: The Restricted Ownership Percentage shall apply in the aggregate to each
of the following four subdivisions: (1) Elliott and Westgate; (2)
Westover and Montrose; (3) Raphael, Leonardo, Ramius, GAM and AG Super
Fund; and (4) Shepherd and Stark.
<PAGE> 31
<TABLE>
<S> <C> <C> <C>
9. Stark International 1,111/3,889 $1,111,000/$3,889,000 9.9%
c/o Staro Asset Management
1500 W. Market Street
Suite 200
Mequon, WI 53092
Tax I.D. No.: 98-0158416
Telephone(414) 241-7728 x. 15
Facsimile(414) 241-1888
10. Westover Investments L.P. 1,044/3,656 $1,044,000/3,656,000 4.9%
c/o 777 Main Street, Suite 2750
Fort Worth, Texas 76102
Attn: Mike Reese
Tax I.D. No.: 75-2730344
Telephone(817) 870-6100
Facsimile(817) 870-6177
11. Montrose Investments Ltd. 1,178/4,122 $1,178,000/4,122,000 4.9%
c/o 777 Main Street, Suite 2750
Fort Worth, Texas 76102
Attn: Mike Reese
Tax I.D. No.: N/A
Telephone(817) 870-6100
Facsimile(817) 870-6177
TOTAL
------------- -----------------------
100 % 10,000/34,999 $10,000,000/$34,999,000
</TABLE>
Note: The Restricted Ownership Percentage shall apply in the aggregate to each
of the following four subdivisions: (1) Elliott and Westgate; (2)
Westover and Montrose; (3) Raphael, Leonardo, Ramius, GAM and AG Super
Fund; and (4) Shepherd and Stark.
<PAGE> 32
Exhibit 1.1A
CERTIFICATE OF DESIGNATIONS
OF
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK
FOR
ACCESS BEYOND, INC.
ACCESS BEYOND, INC., a Delaware corporation (the "Corporation"),
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware, does hereby make this Certificate of Designations and does
hereby state and certify that pursuant to the authority expressly vested in the
Board of Directors of the Corporation by the Certificate of Incorporation of the
Corporation, the Board of Directors duly adopted the following resolutions,
which resolutions remain in full force and effect as of the date hereof:
RESOLVED, that, pursuant to Article FOURTH of the Certificate of
Incorporation of the Corporation, the Board of Directors hereby authorizes the
issuance of, and fixes the designation and preferences and relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions, of a series of Preferred Stock consisting of
45,000 shares, par value $0.01, to be designated "6% Cumulative Convertible
Preferred Stock" (the "Preferred Shares").
RESOLVED, that each of the Preferred Shares shall rank equally in all
respects and shall be subject to the following terms and provisions:
1. DIVIDENDS.
(a) Cumulative. The holders of the Preferred Shares shall be
entitled to receive out of any assets legally available therefor cumulative
dividends at the per share rate of six percent (6%) of the Liquidation
Preference of each Preferred Share, per annum, payable annually on December 31
of each year, commencing December 31, 1997 (each a "Dividend Payment Date"), or
if earlier, upon conversion or redemption of Preferred Shares, in preference and
priority to any payment of any dividend on the Common Stock (as defined below)
or any other class or series of equity security of the Corporation. Such
dividends shall accrue on any given share from the most recent date on which a
dividend has been paid with respect to such share, or if no dividends have been
paid, from the date of the original issuance of such share, and such dividends
shall accrue from day to day whether or not declared, based on the actual number
of days elapsed. If at any time dividends on the outstanding Preferred Shares at
the rate set forth above shall not have been paid or declared and set apart for
payment with respect to all preceding periods, the amount of the deficiency
shall be fully paid or declared and set apart for payment, but without interest,
before any distribution, whether by way of dividend or otherwise, shall be
declared or paid upon or set apart for the shares of any other class or series
of equity security of the Corporation ranking junior to the Preferred Shares.
For so long as any Preferred Shares are outstanding, the Corporation shall not
pay any dividends on any shares of Common Stock or any other equity security
with ranking junior to the Preferred Shares, without having received written
consent of three-quarters in interest of the holders of Preferred Shares.
1
<PAGE> 33
(b) Cash, Common Stock or PIK. Any dividend payable on the
outstanding Preferred Shares may be paid, at the option of the Corporation,
either (i) in cash, (ii) Common Stock (valued at the Conversion Price, as
hereinafter defined, in effect on the Trading Day (as hereinafter defined)
immediately before the applicable Dividend Payment Date or on the Conversion
Date (as hereinafter defined), as the case may be) (iii) by adding the amount
thereof to the Liquidation Preference (as defined below) of such Preferred
Shares; provided, however, that if the Corporation shall fail to pay any
dividend on a Dividend Payment Date, the amount of such dividend shall be added
to the Liquidation Preference for such Preferred Shares and; provided further
that any such dividend (other than the dividend payable on the December 31, 1997
Dividend Payment Date, which shall be paid pursuant to (iii) above) must be paid
in cash unless, at the time the Corporation elects to add the amount of such
payment to the Liquidation Preference, the Common Stock and Common Shares (as
defined below) are subject to Effective Registration (as defined in the
Investment Agreement). The Corporation will be obligated to pay dividends on
Dividend Payment Dates pursuant to (iii) above until the Corporation gives each
holder written notice of its intention to pay dividends pursuant to (i) or (ii)
above, which notice must be given at least 30 days before the next applicable
Dividend Payment Date; provided that any payments of dividends in Common Stock
will not result in the number of shares of Common Stock deemed beneficially
owned by a holder exceeding its Restricted Ownership Percentage. The Corporation
will be obligated to pay dividends on conversions on dates other than a Dividend
Payment Date pursuant to (iii) above until the Corporation gives each holder
written notice of its intention to pay dividends pursuant to (i) or (ii) above,
which notice will only become effective 30 days after being delivered. All
notices described above will remain in force unless and until replacement
notices become effective in accordance with this Section 1(b).
2. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the Corporation, either voluntary or involuntary,
the holders of the Preferred Shares shall be entitled to receive, prior and in
preference to any distribution of any assets of the Corporation to the holders
of any other class or series of equity securities ranking junior to the
Preferred Shares, the amount of $1,000 per share plus (x) dividends added to the
Liquidation Preference in accordance with Section 1(b)(iii) above, (y) default
payments owing to such holder with respect to such share pursuant to the
Registration Rights Agreement (defined below) and (z) any accrued but unpaid
dividends (with dividends deemed accrued on a per diem basis through the date of
such event and thereafter even if such event or any distribution is not on a
Dividend Payment Date) (the "Liquidation Preference").
3. ISSUANCE OF PREFERRED SHARES. The Preferred Shares shall be issued
by the Corporation pursuant to a Preferred Stock Investment Agreement
("Investment Agreement") to be entered into between the Corporation and the
initial subscribers for the Preferred Shares, and holders of Preferred Shares
shall enjoy the benefits of the Registration Rights Agreement ("Registration
Rights Agreement") to be entered into between such parties in connection with
the Investment Agreement.
4. CONVERSION. Each holder of the Preferred Shares shall have the
right at any time and from time to time, at the option of such holder, to
convert any or all of its Preferred Shares, but not less than Preferred Shares
with a Liquidation Preference of at least $10,000, for such number of fully
paid, validly issued and nonassessable shares ("Common Shares") of common stock,
par value $0.01, of the Corporation ("Common Stock"), free and clear of any
liens, claims or encumbrances, as is determined by dividing (i) the Liquidation
Preference times the number of Preferred Shares being converted (the
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<PAGE> 34
"Conversion Amount"), by (ii) the Conversion Price determined as hereinafter
provided in effect on the Conversion Date.
(a) Mechanics of Conversion. To convert Preferred Shares
into Common Shares, the holder shall give written notice ("Conversion Notice")
to the Corporation in the form of page 1 of Exhibit A hereto (which Conversion
Notice may be given by facsimile transmission) stating that such holder elects
to convert the same and shall state therein the number of shares to be converted
and the name or names in which such holder wishes the certificate or
certificates for Common Shares to be issued (the date of such Conversion Notice
shall be referred to herein as the "Conversion Date"). Either simultaneously
with the delivery of the Conversion Notice, or within one (1) Trading Day
thereafter, the holder shall deliver (which also may be done by facsimile
transmission) page 2 to Exhibit A hereto indicating the computation of the
number of Common Shares to be received. "Trading Day" means (x) if the Common
Stock is listed on the New York Stock Exchange or the American Stock Exchange, a
day on which there is trading on such stock exchange, (y) if the Common Stock is
not listed on either of such stock exchanges but sale prices of the Common Stock
are reported on an automated quotation system, a day on which trading is
reported on the principal automated quotation system on which sales of the
Common Stock are reported, or (z) if the foregoing provisions are inapplicable,
a day on which quotations are reported by National Quotation Bureau
Incorporated. Notwithstanding the foregoing, for purposes of calculating average
prices or conducting a "lookback" only (and not, inter alia, for purposes of
calculating the number of days available to the Corporation for making
deliveries or issuances to the holders), a day shall not be considered a trading
day if (i) trading of the Common Stock was suspended during the entire day or
(ii) no reported trades occur on such day. As soon as possible after delivery of
the Conversion Notice, such holder shall surrender the certificate or
certificates representing the shares being converted, duly endorsed, at the
office of the Corporation or of any transfer agent for such shares, provided
that the Corporation shall at all times maintain an office or agency in New York
City (or within 60 miles thereof) for such purposes; provided that the Company
need not effect any issuance prior to receiving all documents required by this
Section 4(a). The Corporation shall, promptly upon receipt of such Conversion
Notice, issue and deliver to or upon the order of such holder, against delivery
of the certificates representing the shares which have been converted, a
certificate or certificates for the number of Common Shares to which such holder
shall be entitled (with the number of and denomination of such certificates
designated by such holder), and the Corporation shall promptly issue and deliver
to such holder a certificate or certificates for the number of Preferred Shares
which such holder has not yet elected to convert hereunder but which are
evidenced in part by the certificate(s) delivered to the Corporation in
connection with such Conversion Notice; the Corporation shall effect such
issuance within three (3) Trading Days of the Conversion Date and shall transmit
the certificates by messenger or overnight delivery service to reach the address
designated by such holder within three (3) Trading Days after the receipt of
such Conversion Notice ("T+3"). In lieu of delivering physical certificates
representing the Common Shares issuable upon conversion of Preferred Shares or
exercise of Warrants, provided the Company's transfer agent is participating in
the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the holder, the Corporation shall use its best efforts
to cause its transfer agent to electronically transmit the Common Shares
issuable upon conversion or exercise to the holder), by crediting the account of
holder's prime broker with DTC through its Deposit Withdrawal Agent Commission
("DWAC") system. The time periods for delivery described above shall apply to
the electronic transmittals through the DWAC system. The parties agree to
coordinate with DTC to accomplish this objective. The conversion pursuant to
this Section 4 shall be deemed to have been made immediately prior to the close
of business on the Conversion Date. The person or persons entitled
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<PAGE> 35
to receive the Common Shares issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such Common Shares at the close
of business on the Conversion Date.
(b) Determination of Conversion Price.
(i) Each Preferred Share may be converted into
Common Shares by dividing the then applicable Liquidation Preference
of such Preferred Share by the Conversion Price. The Conversion Price
shall be equal to the lesser of:
(a) $8 per share of Common Stock ("Fixed
Conversion Price"), or
(b) 85% of the average closing bid price of
Common Stock on the Approved Market (as defined in
the Investment Agreement) on which the Common Stock
is then trading (the "Principal Market") for the 5
consecutive Trading Days prior to but excluding the
date of the Conversion Notice (the "Floating
Conversion Price").
Notwithstanding the foregoing, a holder of Preferred Shares may,
subject to the last sentence of this paragraph, irrevocably elect to
fix the Conversion Price with respect to all or a specified portion
of such holder's Preferred Shares at the Conversion Price in effect
on the date preceding the date of such election (an "Election Date")
by delivering a written notice (an "Election Notice") to the
Corporation on any Election Date; provided, however that, subject to
the last sentence hereof, the full amount of a holder's Preferred
Shares so fixed by an Election Notice on an Election will
automatically be converted to Common Shares pursuant hereto no later
than ninety (90) days following such Election Date if not converted
earlier at the holder's option. The holder shall be required to waive
the restrictions on its ability to convert Preferred Shares contained
in Section 4(l) hereof, to the extent necessary to permit such
conversions. A holder will not be entitled to receive any of the
dividends on the Preferred Shares being converted which accrue after
the Election Date, but shall continue to be entitled to the
anti-dilution protections contained in this Certificate of
Designations. The electing holder's obligation to so convert the
specified number of Preferred Shares at the conversion price fixed in
the applicable Election Notice is subject to the existence on the
date of conversion and at all times since the Election Date of
Effective Registration, and the electing holder will be free to
rescind any Election Notice in the event of any lack of Effective
Registration during such period.
(ii) In the event that during any period of 5
consecutive Trading Days that is used to determine the Conversion
Price as provided for above, the Corporation shall pay any dividend
on the Common Stock payable
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<PAGE> 36
in Common Stock or in rights to acquire Common Stock, or shall effect
a stock split or reverse stock split, or a combination, consolidation
or reclassification of the Common Stock, then the Conversion Price
shall be proportionately decreased or increased, as appropriate, to
give effect to such event.
(c) Conversion Restrictions. The following conversion
restrictions shall apply pro rata among all holders to conversions at a
Conversion Price below $5.00 per Common Share, subject to Section 4(q). However,
if the otherwise applicable Conversion Price is below $5.00 per Common Share,
holders may elect to convert at a Conversion Price equal to $5.00 per Common
Share in order to avoid the restrictions of Section 4(c) and 4(d) entirely.
(i) For each successive "30-Day Period" (as defined
below) following the Initial Closing Date, Preferred Shares with an
initial Liquidation Preference of not more than 10% (the "Convertible
Portion") of each initial investor's purchase price paid for
Preferred Shares at both the Initial Closing and the Subsequent
Closing (as each term is defined in the Investment Agreement) (i.e.,
$1,000,000 in the aggregate prior to the Subsequent Closing and
$4,500,000 in the aggregate thereafter) may be converted at
Conversion Prices below $5.00 per Common Share; provided that if the
Merger has not been consummated within the first six (6) 30-Day
Periods following the Initial Closing, the Convertible Portion will
automatically be increased to 20% (i.e., $2,000,000 in the aggregate)
for each 30-Day Period thereafter. The term "30-Day Period" shall
mean the 30-day period beginning on the Initial Closing Date and on
the same date of each succeeding month. To the extent an investor
transfers all or a portion of its Preferred Shares, this restriction
will attach and transfer with such Preferred Shares on a pro-rata
basis.
(ii) Of the Convertible Portion, 81.25% of
Preferred Shares may be converted at a Conversion Price equal to
eighty five percent (85%) of the average closing bid price of the
Common Stock on the Principal Market for the five (5) Trading Days
prior to conversion. The remaining 18.75% of Preferred Shares may be
converted at a Conversion Price equal to ninety two and one-half
percent (92.5%) of the average closing bid price of the Common Stock
on the Principal Market for the five (5) Trading Days prior to
conversion.
(iii)If the Conversion Price is below $5.00 for
more than five (5) Trading Days in any 30-Day Period following the
Initial Closing Date, then for the balance of that 30-Day Period and
the ensuing 30-Day Period, the "lookback period" used for purposes of
calculating the Floating Conversion Price of the Preferred Stock will
be the lowest five (5) consecutive Trading Day average closing bid
price for the Common Stock on the Principal Market of the 15 Trading
Days preceding the conversion date.
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(iv) The Corporation shall have the right to redeem
any or all of the Convertible Portion that has been submitted for
conversion by the holders in each 30-Day Period at prices below $5.00
per share, for cash equal to the Liquidation Preference of the
redeemed Preferred Stock divided by 85%. In order to exercise this
option, the Corporation must independently have notified each holder
in writing of its intention to redeem each holder's Convertible
Portion not later than ten Trading Days prior to the commencement of
the 30-Day Period to which the exercise applies. No warrants of any
type shall be issued under this Section 4(c)(iv).
(v) the $5.00 threshold specified in this Section
4(c) will be subject to the anti-dilution adjustments in Section 4(f)
applicable to the Fixed Conversion Price in this Certificate of
Designations.
(d) Deferral Option.
(i) Subject to Section 4(q), the Corporation shall
have the option to reduce the Convertible Portion under Section 4(c)
either (I) from 10% to either 5% or 0% in any single 30-Day Period,
in which event the Convertible Portion for the immediately following
30-Day Period shall be increased from 10% to 15% or 20%,
respectively, or (II) from 10% to 5% for any two consecutive 30-Day
Periods, in which event the Convertible Portion for the ensuing
30-Day Period shall be increased to 20%. In order to exercise such an
option, the Corporation must independently have notified each holder
in writing of the Company's intention to so reduce the Convertible
Portion not later than ten Trading Days prior to the commencement of
the 30-Day Period to which the reduction applies.
(ii) For each 30-Day Period by which the
Corporation elects to defer 5% or 10% as provided above, for each
such 5% deferral, the 15% or 7.5% (when applicable) discount used to
calculate the Floating Conversion Price will be permanently increased
by one percentage point and the Fixed Conversion Price will be
permanently reduced by 5%. For example, if the Corporation defers 10%
for a single such 30-Day Period or 5% for two such 30-Day Periods,
the percentage discount used to determine the Floating Conversion
Price will be decreased from 85% to 83% and the Fixed Conversion
Price will be permanently reduced by 10%, subject in all cases to
further adjustment in accordance with the terms of this Certificate
of Designations. Subsequent deferrals would result in further such
adjustments. However, the total reduction of the Fixed Conversion
Price pursuant to this Section 4(d) will not exceed a 25% reduction.
(e) Optional Redemption.
(i) Subject to Section 4(e)(iii), the Preferred
Shares will be callable by the Corporation in whole or part at any
time and from time to
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<PAGE> 38
time, upon 30 days advanced written notice (subject to the right of
holders to convert in advance of such optional redemption date, or
thereafter if the Corporation breaches its obligation to so redeem
the Preferred Shares). On the optional redemption date, the
Corporation will pay in respect of the redeemed Preferred Shares cash
equal to the Liquidation Preference of the Preferred Shares (or
fraction thereof) redeemed, divided by 85% (or such lower percentage
as results from an increase in the conversion discounts as a result
of conversion deferrals pursuant to Section 4(d)).
(ii) Assuming the Corporation exercises its
redemption option under this Section 4(e), Warrants in the form of
Exhibit 1.1B to the Investment Agreement, will be issued to
compensate the holders of Preferred Shares which are so redeemed for
the loss of optionality represented by the Fixed Conversion Price in
the following manner:
On the optional redemption date, the
Corporation will issue Warrants with a strike price at the
Fixed Conversion Price or the average closing bid price of
the Common Stock on the Principal Market during the five (5)
Trading Day period ending three days before the date of
redemption, whichever is higher (the "Strike Price"). The
number of Warrants issued will be equal to the Liquidation
Preference of the Preferred Shares (or fraction thereof)
redeemed, divided by the Strike Price. This number will then
be multiplied, by 50%. For example, if $1,000,000 is the
amount owed on redemption, when the Strike Price is $12.00
per share, then Warrants for 41,667 shares of Common Stock
will be issued. These Warrants will expire on the Mandatory
Conversion Date (as defined below) of the Preferred Stock as
the same may be extended pursuant to Section 4(k)(i). No
Warrants are issuable by the Corporation under any
circumstances except pursuant to this Section 4(e) or the
provisions of the Warrants or the Registration Rights
Agreement.
(iii)The Corporation's notice to the holders
pursuant to Section 4(e)(i) above will be irrevocable and if the
Corporation fails to timely effect the redemption of all Preferred
Shares identified therein, then the Corporation's rights pursuant to
this Section 4(e) will permanently and immediately expire. Any
optional redemption pursuant to Section 4(e)(i) will be made pro-rata
among all the holders. Any such notice shall clearly identify the
Trading Day on which the optional redemption will occur, and no such
notice will be effective unless, at all times between the date of
such notice and the optional redemption date, there shall be
Effective Registration of the Common Shares and the Common Stock.
(f) Stock Splits; Dividends; Adjustments.
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<PAGE> 39
(i) If the Corporation, at any time while the
Preferred Shares are outstanding, (A) shall pay a stock dividend or
otherwise make a distribution or distributions on any equity
securities (including investments or securities convertible into or
exchangeable for such equity securities) in shares of Common Stock,
(B) subdivide outstanding Common Shares into a larger number of
shares, (C) combine outstanding Common Stock into a smaller number of
shares, then the Fixed Conversion Price shall be multiplied by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding before such event and the denominator of
which shall be the number of shares of Common Stock outstanding after
such event. Any adjustment made pursuant to this Section 4(f)(i)
shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or
distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(ii) In the event that the Corporation issues or
sells any Common Stock or securities which are convertible into or
exchangeable for its Common Stock or any convertible securities, or
any warrants or other rights to subscribe for or to purchase or any
options for the purchase of its Common Stock or any such convertible
securities (other than shares or options issued pursuant to the
Corporation's or Hayes' (as defined in the Investment Agreement)
employee or director option plans or shares issued upon exercise of
options, warrants or rights outstanding on the date of the Agreement
and listed in the Company's most recent periodic report filed under
the Exchange Act or described in the S-4 (as defined in the
Investment Agreement) in the form filed and delivered to the holders
most recently before the date of the Investment Agreement) at an
effective purchase price per share which is less than the Conversion
Price then in effect, then in such case, the Fixed Conversion Price
in effect immediately prior to such issue or sale shall be reduced
effective concurrently with such issue or sale to an amount
determined by multiplying the Fixed Conversion Price then in effect
by a fraction, (x) the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior to
such issue or sale, plus (2) the number of shares of Common Stock
which the aggregate consideration received by the Corporation for
such additional shares would purchase at the Conversion Price then in
effect; and (y) the denominator of which shall be the number of
shares of Common Stock of the Company outstanding immediately after
such issue or sale.
For the purposes of the foregoing adjustment,
in the case of the issuance of any convertible securities, warrants,
options or other rights to subscribe for or to purchase or exchange
for, shares of Common Stock ("Convertible Securities"), the maximum
number of shares of Common Stock issuable upon exercise, exchange or
conversion of such Convertible Securities shall be deemed to be
outstanding, provided that no further adjustment shall
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<PAGE> 40
be made upon the actual issuance of Common Stock upon exercise,
exchange or conversion of such Convertible Securities. Convertible
Securities not exercisable or convertible because they are unvested
shall not be deemed outstanding until they become vested in
accordance with their terms, via acceleration or otherwise.
The foregoing adjustments under Section
4(f)(ii) shall not apply to a financing transaction consisting of a
private placement of the Corporation's securities in connection with
a strategic alliance. For this purpose, a strategic alliance shall
mean a transaction in which the acquiror of the Corporation's
securities has a business relationship material to the Corporation
and its subsidiaries taken as a whole independent of such acquiror's
acquisition of the Corporation's securities.
(iii)If the Corporation, at any time while the
Preferred Shares are outstanding, shall distribute to all holders of
Common Stock evidences of its indebtedness or assets or cash or
rights or warrants to subscribe for or purchase any security
(excluding those referred to in Section 4(f)(ii) above) then in each
such case the Fixed Conversion Price at which the Preferred Shares
shall thereafter be convertible shall be determined by multiplying
the Fixed Conversion Price in effect immediately prior to the record
date fixed for determination of shareholders entitled to receive such
distribution by a fraction of which the denominator shall be the Fair
Market Price for shares of Common Stock determined as of the record
date mentioned above, and of which the numerator shall be such Fair
Market Price for shares of Common Stock on such record date less the
then fair market value at such record date of the portion of such
assets or evidence of indebtedness so distributed applicable to one
share of outstanding Common Stock as determined by the Board of
Directors in good faith; provided, however that in the event of a
distribution exceeding 10% of the net assets of the Corporation, such
fair market value shall be determined by a nationally recognized or
major regional investment banking firm or firm of independent
chartered accountants of recognized standing (which may be the firm
that regularly examines the financial statements of the Corporation)
(an "Appraiser") selected in good faith by the Board of Directors and
holders of a three-quarters in interest of the Preferred Shares. In
either case the adjustments shall be described in a statement
provided to all holders of Preferred Shares of the portion of assets
or evidences of indebtedness so distributed or such subscription
rights applicable to one share of Common Stock. Such adjustment shall
be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.
(iv) Whenever the Conversion Price is adjusted
pursuant to Section 4(f)(i), (ii) or (iii), the Corporation shall
promptly mail to each holder of the Preferred Shares a notice setting
forth the Conversion Price after such
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<PAGE> 41
adjustment and setting forth a brief statement of the facts requiring
such adjustment.
(g) Notice of Record Date. In the event of any taking by the
Corporation of a record date of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, any security or right convertible into or
entitling the holder thereof to receive additional Common Shares, or 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, the
Corporation shall deliver to each holder of Preferred Shares at least 20 days
prior to the date specified therein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend, distribution,
security or right and the amount and character of such dividend, distribution,
security or right.
(h) Issue Taxes. The Corporation shall pay any and all issue
and other taxes, excluding any income, franchise or similar taxes, that may be
payable in respect of any issue or delivery of Common Shares on conversion of
Preferred Shares pursuant hereto.
(i) Fractional Shares. No fractional shares shall be issued
upon the conversion of any Preferred Shares. All Common Shares (including
fractions thereof) issuable upon conversion of more than one Preferred Share by
a holder thereof shall be aggregated for purposes of determining whether the
conversion would result in the issuance of any fractional share. If, after the
aforementioned aggregation, the conversion would result in the issuance of a
fraction of a share of Common Stock, the Corporation shall, in lieu of issuing
any fractional share, pay the holder otherwise entitled to such fraction a sum
in cash equal to the fair market value of such fraction on the Conversion Date
(as determined in good faith by the Board of Directors of the Corporation).
(j) Reorganization or Merger; Going Private. In case of any
reorganization or any reclassification of the capital stock of the Corporation
or any consolidation or merger of the Corporation with or into any other
corporation or corporations or a sale of all or substantially all of the assets
of the Corporation to any other person, then, as part of such reorganization,
consolidation, merger or sale, if the holders of Common Stock receive any
publicly traded securities as part or all of the consideration for such
reorganization, consolidation, merger or sale, then provision shall be made such
that each Preferred Share shall thereafter be convertible into such new
securities at a conversion price which places the holders of Preferred Shares in
an economically equivalent position as they would have been if not for such
event. In addition to the foregoing, to the extent that the holders of Common
Shares receive any non-publicly traded securities or other property or cash as
part or all of the consideration for such reorganization, consolidation, merger
or sale, then such distribution shall be treated as a distribution under Section
4(f) above and Section 4(f) shall govern such distribution. The Corporation
further agrees that it shall not agree or consent to or enter into any
transaction or series of transactions as a result of which the Common Shares
would cease to be publicly traded unless agreed to in writing in advance by the
Board of Directors of the Corporation and three-quarters in interest of the
holders of Preferred Shares, except for transactions in which the holders of
Common Stock receive only cash or publicly traded securities and the Preferred
Shares are afforded the protections of this Section 4(j).
(k) Mandatory Conversion.
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(i) Subject to Section 4(k)(ii) below, any
Preferred Shares held on the date which is the fourth (4th)
anniversary of the Initial Closing Date, ("Mandatory Conversion
Date") shall be converted free of all conversion restrictions
hereunder; provided that such Mandatory Conversion Date shall be
deferred, for such number of days as is equal to 1.5 times the number
of days: (A) there is not and/or has not been Effective Registration
(as defined in the Investment Agreement), but not including the first
110 days after the Initial Closing; (B) there is not and/or has not
been a sufficient amount of Common Stock available for conversion of
all outstanding Preferred Shares or exercise of all Warrants; (C) for
any other reason (except miscalculation of the conversion formula by
a holder of Preferred Shares or failure of such holder to deliver the
materials required by Section 4(a)) the Corporation refuses or
announces its refusal to honor conversion of Preferred Shares or
exercise of all Warrants; or (D) there is a suspension, restriction
or limitation on the ability of holders of Preferred Shares to sell
Common Shares received upon conversion of Preferred Shares or under
the Registration Statement and prospectus.
(ii) Notwithstanding the preceding Section 4(k)(i),
no holder of Preferred Shares shall be obligated to convert any
Preferred Shares held by such holder on the Mandatory Conversion Date
unless and until each of the following conditions has been satisfied
or exists, each of which shall be a condition precedent to any such
forced conversion:
(A) no material default or breach exists, and
no event shall have occurred which constitutes (or would
constitute with notice or the passage of time or both) a
material default or breach of the Investment Agreement, the
Registration Rights Agreement, the Warrants or this
Certificate of Designations;
(B) none of the events described in clauses
(i) through (v) of Section 2(b) of the Registration Rights
Agreement shall have occurred and be continuing;
(C) Effective Registration has occurred and is
continuing and has continuously existed for the prior 30
consecutive Trading Days;
(D) the Corporation has assets with a net
realizable fair market value exceeding its liabilities and
is able to pay all its debts as they become due in the
ordinary course of business, and the Corporation is not and
has not been subject to any liquidation, dissolution or
winding up of its affairs; and
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<PAGE> 43
(E) each holder of Preferred Shares shall have
received a certificate from an appropriate executive officer
of the Corporation certifying that each of the foregoing
conditions precedent exist or have been satisfied.
Such mandatory conversion shall be subject to and governed by all the
provisions relating to voluntary conversion of the Preferred Shares
contained herein.
(l) Limitations on Holder's Right to Convert.
Notwithstanding anything to the contrary contained herein, no Preferred Share
may be converted by a holder, other than pursuant to Section 4(k), to the extent
that, after giving effect to Common Shares to be issued pursuant to a Conversion
Notice, the total number of Common Shares deemed beneficially owned by such
holder (other than by virtue of the ownership of Preferred Shares or ownership
of other securities that have limitations on a holder's rights to convert or
exercise similar to those limitations set forth herein), together with all
Common Shares deemed beneficially owned by the holder's "affiliates" (as defined
in Rule 144 of the Act) that would be aggregated for purposes of determining
whether a group under Section 13(d) of the Securities Exchange Act of 1934
exists, would exceed the Restricted Ownership Percentage for such holder
specified on Schedule I to the Investment Agreement of the total issued and
outstanding shares of the Corporation's Common Stock; provided that (w) each
holder shall have the right at any time and from time to time to reduce its
Restricted Ownership Percentage immediately upon notice to the Corporation, (x)
each holder shall have the right at any time and from time to time, to increase
its Restricted Ownership Percentage upon 61 days prior notice to the Corporation
or immediately in the event of a Change in Control Transaction (other than the
Merger), (y) each holder can make subsequent adjustments pursuant to (w) or (x)
any number of times from time to time (which adjustment shall be effective
immediately if it results in a decrease in the percentage or shall be effective
upon 61 days' prior written notice or immediately in the event of a Change in
Control Transaction if it results in an increase in the percentage) and (z) each
holder may eliminate or reinstate this limitation at any time and from time to
time (which elimination will be effective upon 61 days' prior notice and which
reinstatement will be effective immediately). Without limiting the foregoing, in
the event of a Change in Control Transaction, any holder may reinstate
immediately (in whole or in part) the requirement that any increase in its
Restricted Ownership Percentage be subject to 61 days' prior written notice,
notwithstanding such Change in Control Transaction, without imposing such
requirement on, or otherwise changing such holder's rights with respect to, any
other Change in Control Transaction. For this purpose, any material modification
of the terms of a Change in Control Transaction will be deemed to result in a
new Change in Control Transaction. The delivery of a Conversion Notice by any
holder shall be deemed a representation by such holder that it is in compliance
with this paragraph. The term "deemed beneficially owned" as used in this
Certificate of Designations shall exclude shares that might otherwise be deemed
beneficially owned by reason of the convertibility of the Preferred Shares. A
"Change in Control Transaction" will be deemed to have occurred upon the earlier
of announcement or consummation of a transaction or series of transactions
(other than the Merger) involving (x) any consolidation or merger of the
Corporation with or into any other corporation or other entity or person
(whether or not the Corporation is the surviving corporation), or any other
corporate reorganization or transaction or series of related transactions in
which in excess of 50% of the Corporation's voting power is transferred through
a merger, consolidation, tender offer or similar transaction, or (y) in excess
of 50% of the Corporation's Board of Directors consists of directors not
nominated by the prior Board of Directors of the Corporation, or (z) any person
(as defined
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in Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), together with its affiliates and associates (as such terms are
defined in Rule 405 under the Securities Act of 1933, as amended (the "Act")),
beneficially owns or is deemed to beneficially own (as described in Rule 13d-3
under the Exchange Act without regard to the 60-day exercise period) in excess
of 50% of the Corporation's voting power. The Corporation shall provide all
holders of Preferred Shares with the earlier of (i) 20 days' prior written
notice of any such Change in Control Transaction, to the extent the Corporation
has prior knowledge of a Change in Control Transaction; or (ii) notice on the
day immediately following the Corporation's learning of any such transaction.
(m) Certificate for Conversion Price Adjustment. The
Corporation promptly shall furnish or cause to be furnished to such holder a
certificate prepared by the Corporation setting forth any adjustments or
readjustments of the Conversion Price pursuant to this Section 4.
(n) Specific Performance. The Corporation agrees that
irreparable damage would occur in the event that any of the provisions of this
Certificate of Designations were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the holders of
Preferred Shares shall be entitled to specific performance, injunctive relief or
other equitable remedies to prevent or cure breaches of the provisions of this
Certificate of Designations and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedy to which any of them may be
entitled under agreement, at law or in equity.
(o) Forced Conversion by the Corporation. At any time after
the second anniversary of the Initial Closing Date (subject to deferral pursuant
to the terms of Section 4(k)(i)), the Corporation can compel the conversion of
any or all Preferred Shares at the then applicable Conversion Price upon 30-days
advanced written notice to the holders; provided that (i) any such forced
conversion must be pro rata among all holders, (ii) any holder may convert its
Preferred Shares at its option prior to the date of such forced conversion,
(iii) the notice of forced conversion under this Section 4(o) will be
irrevocable and if the Corporation shall fail to timely effect the conversion of
all Preferred Shares identified in such notice, the Corporation's rights under
this Section 4(o) will permanently and immediately expire, (iv) the Corporation
cannot force conversion of any Preferred Shares if there is, or has been in the
previous 90 days, a lack of Effective Registration, (v) all of the conditions
set forth in Section 4(k)(ii) (A), (B), (D) and (E) shall be satisfied and (vi)
such forced conversion will not conflict with any holder's Restricted Ownership
Percentage.
(p) Mandatory Repurchase. Each holder shall have the
unilateral option and right to compel the Corporation to repurchase any or all
of such holder's Preferred Shares within 3 days of a written notice requiring
such repurchase (in the case of (iii) or (iv) below only) or simultaneously with
the consummation of the events described in (i) or (ii) below, at a price per
Preferred Share equal to the Liquidation Preference divided by the Floating
Conversion Price as of the date of exercise if any of the following events
involving the Corporation shall have been announced as pending or planned (in
the case of (iii) or (iv) below only), or shall have occurred:
(i) A Change in Control Transaction (other than the
Merger) announced before the effectiveness of a registration
statement registering all Common Shares issuable upon conversion of
the Preferred Shares;
13
<PAGE> 45
(ii) A "going private" transaction under Rule 13e-3
promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(iii)The Corporation shall (A) become insolvent;
(B) admit in writing its inability to pay its debts generally as they
mature; (C) make an assignment for the benefit of creditors or
commence proceedings for its dissolution; or (D) apply for or consent
to the appointment of a trustee, liquidator or receiver for it or for
a substantial part of its property or business; or
(iv) Bankruptcy, reorganization, insolvency or
liquidation proceedings or other proceedings, or relief under any
bankruptcy law or any law for the relief of debt shall be instituted
by or against the Corporation, or the Corporation shall by any action
or answer approve of, consent to, or acquiesce in any such
proceedings or admit to any material allegations of, or default in
answering a petition filed in any such proceedings.
(q) Self-Tenders. In the event of a tender offer by the Corporation
under Rule 13e-4 promulgated pursuant to the Exchange Act, each holder of
Preferred Shares will have the unilateral option to tender into the tender offer
without the restrictions imposed by Sections 4(c) and 4(d). If a holder
determines not to participate in or to withdraw from such tender offer, and at
all times prior to the closing of such tender offer, all other rights of such
holder under this Certificate of Designations, the Investment Agreement, the
Registration Rights Agreement and (if issued) the Warrants will remain
unmodified and in full force and effect.
5. VOTING RIGHTS. The affirmative vote of 85% in interest of the
Corporation's outstanding Preferred Shares shall be necessary for (i) any
amendment of this Certificate of Designations, (ii) any amendment to the
Certificate of Incorporation or by-laws of the Corporation that may amend or
change or adversely affect any of the rights, preferences, or privileges of the
Preferred Shares, (iii) any waiver of a default in payment of dividends on the
Preferred Shares, and (iv) any reorganization or reclassification of the capital
stock of the Corporation, any consolidation or merger (other than the Merger) of
the Corporation with or into any other corporation or corporations, or any sale
of all or substantially all of the assets of the Corporation, that, in any such
case, would have an adverse effect on any of the rights, preferences, or
privileges of the Preferred Shares, provided, however, that holders of Preferred
Shares who are affiliates of the Corporation (and the Corporation itself) shall
not participate in such vote and the Preferred Shares of such holders shall be
disregarded and deemed not to be outstanding for purposes of such vote. Except
as set forth in this Section 5, the holders of Preferred Shares shall not have
any voting rights.
6. NOTICES. The Corporation shall distribute to the holders of
Preferred Shares copies of all notices, materials, annual and quarterly reports,
proxy statements, information statements and any other documents distributed
generally to the holders of shares of Common Stock of the Corporation, at such
times and by such method as such documents are distributed to such holders of
such Common Stock.
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<PAGE> 46
7. REPLACEMENT CERTIFICATES. The certificate(s) representing the
Preferred Shares held by any holder of Preferred Shares may be exchanged by such
holder at any time and from time to time for certificates with different
denominations representing an equal aggregate number of Preferred Shares, as
reasonably requested by such holder, upon surrendering the same. No service
charge will be made for such registration or transfer or exchange.
8. ATTORNEYS' FEES. Any holder of Preferred Shares shall be entitled
to recover from the Corporation the reasonable attorneys' fees and expenses
incurred by such holder in connection with enforcement by such holder of any
obligation of the Corporation hereunder.
9. NO REISSUANCE. No Preferred Shares acquired by the Corporation by
reason of redemption, purchase, conversion or otherwise shall be reissued.
Signed on November ____, 1997
ACCESS BEYOND, INC.
By:____________________________________
Name:
Title:
15
<PAGE> 47
EXHIBIT A
(To be Executed by Holder
in order to Convert Preferred Shares)
CONVERSION NOTICE
FOR
6% CUMULATIVE CONVERTIBLE PREFERRED STOCK
The undersigned, as a holder ("Holder") of shares of 6% Cumulative Convertible
Preferred Stock ("Preferred Shares") of Access Beyond, Inc. (the "Corporation"),
hereby irrevocably elects to convert _____________ Preferred Shares for shares
("Common Shares") of common stock, par value $0.01 per share (the "Common
Stock"), of the Corporation according to the terms and conditions of the
Certificate of Designations for the Preferred Shares as of the date written
below. The undersigned hereby requests that share certificates for the Common
Stock to be issued to the undersigned pursuant to this Conversion Notice be
issued in the name of, and delivered to, the undersigned or its designee as
indicated below. No fee will be charged to the holder of Preferred Shares for
any conversion. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed thereto in the Certificate of Designations.
Conversion Date: __________________________
Conversion Information:NAME OF HOLDER:
By:
Print Name:
Print Title:
Print Address of Holder:
_________________________________________________________________
_________________________________________________________________
Issue Common Stock to:__________________________________________
at:_____________________________________________________________
_________________________________________________________________
If Common Stock is to be issued to a person other than Holder, Holder's
signature must be guaranteed below:
SIGNATURE GUARANTEED BY:
__________________________________
THE COMPUTATION OF NUMBER OF COMMON SHARES TO BE RECEIVED IS SET FORTH ON PAGE 2
OF THE CONVERSION NOTICE.
PAGE 1 OF CONVERSION NOTICE
<PAGE> 48
PAGE 2 TO CONVERSION NOTICE DATED ____________________ FOR:_____________________
(CONVERSION DATE) (NAME OF HOLDER)
COMPUTATION OF NUMBER OF COMMON SHARES TO BE RECEIVED
<TABLE>
<S> <C>
Number of Preferred Shares converted: ___________shares
Number of Preferred Shares converted x Liquidation Preference $----------
($1,000 per share plus dividends added pursuant to Section
1(b)(iii), default payments and accrued but unpaid dividends)
TOTAL DOLLAR AMOUNT CONVERTED $
===========
CONVERSION PRICE $
Number of Common Shares = Total dollar amount converted = $
----------------------------- -----------
Conversion Price $
NUMBER OF COMMON SHARES = _________
</TABLE>
If the conversion is not being settled by DTC, please issue and deliver _____
certificate(s) for Common Shares in the following amount(s):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
If the Holder is receiving certificate(s) for Preferred Shares upon the
conversion, please issue and deliver _____ certificate(s) for Preferred Shares
in the following amounts:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE> 49
EXHIBIT 1.1B
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD OR OFFERED FOR SALE
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAW OR AN APPLICABLE EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
_____________ __, ____
ACCESS BEYOND, INC.
Common Stock Purchase Warrant
Access Beyond, Inc., a Delaware corporation (the "COMPANY"), hereby
certifies that for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [NAME OF INVESTOR], having an address at______
________________________________________________________________________________
("PURCHASER") or any other Warrant Holder is entitled, on the terms and
conditions set forth below, to purchase from the Company at any time beginning
on the date hereof and ending on the fourth anniversary of the Initial Closing
Date, as extended 1.5 times the number of days between the Initial Closing Date
and such anniversary on which there had been no Effective Registration,
[__________] [NUMBER EQUAL TO THE AGGREGATE LIQUIDATION PREFERENCE OF THE
PREFERRED SHARES REDEEMED DIVIDED BY THE STRIKE PRICE] fully paid and
nonassessable shares of Common Stock, $.01 par value, of the Company (the
"COMMON STOCK"), at a purchase price per share equal to [$___] [THE HIGHER OF
THE FIXED CONVERSION PRICE (AS ADJUSTED) OR THE AVERAGE CLOSING PRICE OF THE
COMMON STOCK FOR THE 5 TRADING DAY PERIOD ENDING 3 DAYS BEFORE THE OPTIONAL
REDEMPTION DATE] (the "PURCHASE PRICE"), as the same may be adjusted pursuant to
Section 5 herein.
1. DEFINITIONS.
(a) The term "AGREEMENT" shall mean the Preferred Stock Investment
Agreement, dated November __, 1997, between the Company and the Investors
signatory thereto.
(b) The term "CERTIFICATE" shall mean the Certificate of
Designations filed by the Company with the Secretary of State of the State of
Delaware on November ___, 1997.
(c) The term "EFFECTIVE REGISTRATION" shall have the meaning
specified in the Agreement.
<PAGE> 50
(d) The term "INITIAL CLOSING DATE" shall have the meaning
specified in the Agreement.
(e) The term "PREFERRED" shall mean the 6% Cumulative Convertible
Preferred Shares of the Company issued pursuant to the Certificate.
(f) The term "REGISTRATION RIGHTS AGREEMENT" shall mean the
Registration Rights Agreement, dated November ___, 1997, between the Company and
the investors signatures hereto.
(g) The term "WARRANT HOLDER" shall mean the Purchaser or any
assignee of all or any portion of this Warrant.
(h) The term "WARRANT SHARES" shall mean the Shares of Common
Stock or other securities issuable upon exercise of this Warrant.
Capitalized terms used but not defined in this Warrant shall have the
meanings specified in the Agreement.
2. EXERCISE OF WARRANT.
This Warrant may be exercised by the Warrant Holder, in whole or in
part, at any time and from time to time by either of the following methods:
(a) The Warrant Holder may surrender this Warrant, together with the
form of subscription at the end hereof duly executed by Warrant Holder
("SUBSCRIPTION NOTICE") and with payment of the Purchase Price for the number of
Warrant Shares so purchased, at the offices of the Company or any transfer agent
for the Common Stock; or
(b) The Warrant Holder may also exercise this Warrant, in whole or in
part, in a "cashless" or "net-issue" exercise by delivering to the offices of
the Company or any transfer agent for the Common Stock this Warrant, together
with a Subscription Notice specifying the number of Warrant Shares to be
delivered to such Warrant Holder ("DELIVERABLE SHARES") and the number of
Warrant Shares with respect to which this Warrant is being surrendered in
payment of the aggregate Purchase Price for the Deliverable Shares ("SURRENDERED
SHARES"); provided that the Purchase Price multiplied by the number of
Deliverable Shares shall not exceed the value of the Surrendered Shares; and
provided further that the sum of the number of Deliverable Shares and the number
of Surrendered Shares so specified shall not exceed the aggregate Warrant Shares
represented by this Warrant. For the purposes of this provision, each Warrant
Share as to which this Warrant is surrendered will be attributed a value equal
to the fair market value (as defined below) of the Warrant Share minus the
Purchase Price of the Warrant Share.
In the event that the Warrant is not exercised in full, the number of
Warrant Shares shall be reduced by the number of such Warrant Shares for which
this Warrant is exercised, and the Company, at its expense, shall forthwith
issue and deliver or upon the order of Warrant Holder a new Warrant of like
tenor in the name of Warrant Holder or as Warrant Holder (upon payment by
Warrant Holder of any applicable transfer taxes) may request, reflecting such
adjusted Warrant Shares.
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<PAGE> 51
3. DELIVERY OF STOCK CERTIFICATES.
(a) Subject to the terms and conditions of this Warrant, as soon
as practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) Trading Days (as defined below) thereafter, the Company
shall transmit the certificates (together with any other stock or other
securities or property to which Warrant Holder is entitled upon exercise) by
messenger or overnight delivery service to reach the address designated by such
holder within three (3) Trading Days after the receipt of the Subscription
Notice ("T+3"). For purposes of calculating average prices or conducting a
"lookback" only (and not, inter alia, for purposes of calculating the number of
days available to the Company for making deliveries or issuances to the Warrant
Holders), a day shall not be considered a Trading Day if (i) trading of the
Common Stock was suspended during the entire day or (ii) no reported trades
occurred on such day.
In lieu of delivering physical certificates representing the
Common Stock issuable upon exercise, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer ("FAST") program, upon request of the Warrant Holder, the Company shall
use its best efforts to cause its transfer agent to electronically transmit the
Common Stock issuable upon exercise to the Warrant Holder by crediting the
account of Warrant Holder's prime broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system. The time periods for delivery described in the
immediately preceding paragraph shall apply to the electronic transmittals
described herein.
The term Trading Day means (x) if the Common Stock is listed
on the New York Stock Exchange or the American Stock Exchange, a day on which
there is trading on such stock exchange, (y) if the Common Stock is not listed
on either of such stock exchanges but sale prices of the Common Stock are
reported on an automated quotation system, a day on which trading is reported on
the principal automated quotation system on which sales of the Common Stock are
reported, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated
(b) This Warrant may not be exercised as to fractional shares of
Common Stock. In the event that the exercise of this Warrant, in full or in
part, would result in the issuance of any fractional share of Common Stock, then
in such event the Warrant Holder shall be entitled to cash equal to the fair
market value of such fractional share. For purposes of this Warrant, "FAIR
MARKET VALUE" shall equal the closing trading price of the Common Stock on the
Approved Market which is the principal trading exchange or market for the Common
Stock (the "PRINCIPAL MARKET") on the date of determination or, if the Common
Stock is not listed or admitted to trading on any Approved Market, the average
of the closing bid and asked prices on the over-the-counter market as furnished
by any New York Stock Exchange member firm reasonably selected from time to time
by the Company for that purpose and reasonably acceptable to the Warrant Holder,
or, if the Common Stock is not listed or admitted to trading on any Approved
Market or traded over-the-counter and the average price cannot be determined a
contemplated above, the fair market value of the Common Stock shall be as
reasonably determined in good faith by the Company's Board of Directors with the
written concurrence of the Warrant Holder.
4. (A) REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3
<PAGE> 52
(a) The Company shall comply with its obligations under the
Registration Rights Agreement with respect to the Warrant Shares, including,
without limitation, the Company's obligation to file and have declared effective
a registration statement registering the Warrant Shares under the Securities Act
of 1933, as amended (the "ACT").
(b) The Company shall take all necessary action and proceedings as
may be required and permitted by applicable law, rule and regulation, including,
without limitation, the notification of the Principal Market, for the legal and
valid issuance of this Warrant and the Warrant Shares to the Warrant Holder
under this Warrant.
(c) From the date hereof through the last date on which this
Warrant is exercisable, the Company shall take all steps reasonably necessary
and within its control to insure that the Common Stock remains listed on the
Principal Market and shall not amend its Certificate of Incorporation or Bylaws
so as to adversely affect any rights of the Warrant Holder under this Warrant.
(d) The Warrant Shares, when issued in accordance with the terms
hereof, will be duly authorized and, when paid for or issued in accordance with
the terms hereof, shall be validly issued, fully paid and non-assessable. The
Company has authorized and reserved for issuance to Warrant Holder the requisite
number of shares of Common Stock to be issued pursuant to this Warrant.
(e) The Company shall at all times reserve and keep available,
solely for issuance and delivery as Warrant Shares hereunder, such number of
shares of Common Stock as shall from time to time be issuable.
(f) With a view to making available to Warrant Holder the benefits
of Rule 144 promulgated under the Act and any other rule or regulation of the
Securities and Exchange Commission ("SEC") that may at any time permit Warrant
Holder to sell securities of the Company to the public without registration, the
Company agrees to use its reasonable best efforts to:
i) make and keep public information available, as those
terms are understood and defined in Rule 144, at all times;
ii) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT");
and
iii) furnish to any Warrant Holder forthwith upon request a
written statement by the Company that it has complied with the
reporting requirements of Rule 144 and of the Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the
Company as may be reasonably requested to permit any such Warrant
Holder to take advantage of any rule or regulation of the SEC
permitting the selling of any such securities without
registration.
4
<PAGE> 53
(B) REPRESENTATIONS AND COVENANTS OF THE PURCHASER.
The Purchaser shall not sell, offer for sale, transfer or assign
this Warrant or Warrant Shares, unless such resale is pursuant to an effective
registration statement under the Act or pursuant to an applicable exemption from
such registration requirements.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of and
kind of securities purchasable upon exercise of this Warrant and the Purchase
Price shall be subject to adjustment from time to time as follows:
(a) Subdivisions, Combinations and other Issuances. If the Company
shall at any time after the date hereof but prior to the expiration of this
Warrant subdivide its outstanding securities as to which purchase rights under
this Warrant exist, by split-up, spin-off, or otherwise, or combine its
outstanding securities as to which purchase rights under this Warrant exist, the
number of Warrant Shares as to which this Warrant is exercisable as of the date
of such subdivision, split-up, spin-off or combination shall forthwith be
proportionately increased in the case of a subdivision, or proportionately
decreased in the case of a combination. Appropriate proportional adjustments
(decrease in the case of subdivision, increase in the case of combination) shall
also be made to the Purchase Price payable per share, so that the aggregate
Purchase Price payable for the total number of Warrant Shares purchasable under
this Warrant as of such date shall remain the same as it would have been
immediately prior to such subdivision or combination.
(b) Stock Dividend. If at any time after the date hereof the
Company declares a dividend or other distribution on Common Stock payable in
Common Stock or other securities or rights convertible into Common Stock
("COMMON STOCK EQUIVALENTS") without payment of any consideration by holders of
Common Stock for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
exercise or conversion thereof), then the number of shares of Common Stock for
which this Warrant may be exercised shall be increased as of the record date (or
the date of such dividend distribution if no record date is set) for determining
which holders of Common Stock shall be entitled to receive such dividends, in
proportion to the increase in the number of outstanding shares (and shares of
Common Stock issuable upon conversion of all such securities convertible into
Common Stock) of Common Stock as a result of such dividend, and the Purchase
Price shall be proportionately reduced so that the aggregate Purchase Price for
all the Warrant Shares issuable hereunder immediately after the record date (or
on the date of such distribution, if applicable), for such dividend shall equal
the aggregate Purchase Price so payable immediately before such record date (or
on the date of such distribution, if applicable).
(c) Other Distributions. If at any time after the date hereof the
Company distributes to holders of its Common Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any shares of its
capital stock, any evidence of indebtedness or any of its assets (other than
cash, Common Stock or securities convertible into Common Stock), then the number
of Warrant Shares for which this Warrant is exercisable shall be increased to
equal: (i) the number of Warrant Shares for which this Warrant is exercisable
immediately prior to such event, (ii) multiplied by a fraction, (A) the
numerator of which shall be the fair market value per share of Common Stock on
the record date for the dividend or distribution, and (B) the denominator of
which shall be the fair market value price per share of Common Stock on the
record date for the dividend or distribution minus the amount allocable to one
share of Common Stock of the value (as jointly determined in good faith by the
Board of Directors of the Company and the Warrant Holder) of
5
<PAGE> 54
any and all such evidences of indebtedness, shares of capital stock, other
securities or property, so distributed. The Purchase Price shall be reduced to
equal: (i) the Purchase Price in effect immediately before the occurrence of any
event (ii) multiplied by a fraction, (A) the numerator of which is the number of
Warrant Shares for which this Warrant is exercisable immediately before the
adjustment, and (B) the denominator of which is the number of Warrant Shares for
which this Warrant is exercisable immediately after the adjustment.
(d) Merger, etc. If at any time after the date hereof there shall
be a merger or consolidation of the Company with or into or a transfer of all or
substantially all of the assets of the Company to another entity, then the
Warrant Holder shall be entitled to receive upon or after such transfer, merger
or consolidation becoming effective, and upon payment of the Purchase Price then
in effect, the number of shares or other securities or property of the Company
or of the successor corporation resulting from such merger or consolidation,
which would have been received by Warrant Holder for the shares of stock subject
to this Warrant had this Warrant been exercised just prior to such transfer,
merger or consolidation becoming effective or to the applicable record date
thereof, as the case may be. The Company will not merge or consolidate with or
into any other corporation, or sell or otherwise transfer its property, assets
and business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company), or
such transferee corporation, as the case may be, shall expressly assume, by
supplemental agreement, the due and punctual performance and observance of each
and every covenant and condition of this Warrant to be performed and observed by
the Company.
(e) Reclassification, etc. If at any time after the date hereof
there shall be a reorganization or reclassification of the securities as to
which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Warrant Holder
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the Purchase Price then in
effect, the number of shares or other securities or property resulting from such
reorganization or reclassification, which would have been received by the
Warrant Holder for the shares of stock subject to this Warrant had this Warrant
at such time been exercised.
(f) Purchase Price Adjustment. In the event that the Company
issues or sells any Common Stock or securities which are convertible into or
exchangeable for its Common Stock or any convertible securities, or any warrants
or other rights to subscribe for or to purchase or any options for the purchase
of its Common Stock or any such convertible securities (other than shares or
options issued or which may be issued pursuant to the Company's or Haye's (as
defined in the Investment Agreement and only if the Merger described therein has
been consummated) employee or director option plans or shares issued upon
exercise of options, warrants or rights outstanding on the date of the Agreement
and listed in the Company's most recent periodic report filed under the Exchange
Act or in the S-4 (as defined in Investment Agreement)) at an effective purchase
price per share which is less than the Purchase Price then in effect, then in
such case, the Purchase Price in effect immediately prior to such issue or sale
shall be reduced effective concurrently with such issue or sale to an amount
determined by multiplying the Purchase Price then in effect by a fraction, (x)
the numerator of which shall be the sum of (1) the number of shares of Common
Stock outstanding immediately prior to such issue or sale, plus (2) the number
of shares of Common Stock which the aggregate consideration received by the
Company for such additional shares would purchase at the Purchase Price then in
effect; and (y) the denominator of which shall be the number of shares of Common
Stock of the Company outstanding immediately after such issue or sale. The
foregoing shall not apply to a financing transaction consisting of a private
placement of the Company's securities in connection
6
<PAGE> 55
with a strategic alliance. For this purpose, a strategic alliance shall mean a
transaction in which the acquiror of the Company's securities has a business
relationship material to the Company and its subsidiaries taken as a whole
independent of such acquiror's acquisition of the Company's securities.
For the purposes of the foregoing adjustment, in the case of the
issuance of any convertible securities, warrants, options or other rights to
subscribe for or to purchase or exchange for, shares of Common Stock
("CONVERTIBLE SECURITIES"), the maximum number of shares of Common Stock
issuable upon exercise, exchange or conversion of such Convertible Securities
shall be deemed to be outstanding, provided that no further adjustment shall be
made upon the actual issuance of Common Stock upon exercise, exchange or
conversion of such Convertible Securities, and convertible securities not
exercisable or convertible because they are unvested shall not be deemed
outstanding until they become vested in accordance with their terms, via
acceleration or otherwise.
The number of shares which may be purchased hereunder shall be
increased proportionately to any reduction in Purchase Price pursuant to this
paragraph 5(f), so that after such adjustments the aggregate Purchase Price
payable hereunder for the increased number of shares shall be the same as the
aggregate Purchase Price in effect just prior to such adjustments.
6. NO IMPAIRMENT. The Company will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Warrant Holder
against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, and (b) will take all such action as
may be reasonably necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant.
7. NOTICE OF ADJUSTMENTS. Whenever the Purchase Price or number of
Shares purchasable hereunder shall be adjusted pursuant to Section 5 hereof, the
Company shall execute and deliver to the Warrant Holder a certificate setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated and the
Purchase Price and number of shares purchasable hereunder after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first class mail, postage prepaid) to the Warrant Holder.
8. RIGHTS AS STOCKHOLDER. Prior to exercise of this Warrant, the Warrant
Holder shall not be entitled to any rights as a stockholder of the Company with
respect to the Warrant Shares, including (without limitation) the right to vote
such shares, receive dividends or other distributions thereon or be notified of
stockholder meetings. However, in the event of any taking by the Company 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, the Company shall mail to each Warrant
Holder, at least 10 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
7
<PAGE> 56
9. LIMITATION ON EXERCISE. Notwithstanding anything to the contrary
contained herein, this Warrant may not be exercised by the Warrant Holder to the
extent that, after giving effect to Warrant Shares to be issued pursuant to a
Subscription Notice, the total number of shares of Common Stock deemed
beneficially owned by such holder (other than by virtue of ownership of this
Warrant, or ownership of other securities that have limitations on the holder's
rights to convert or exercise similar to the limitations set forth herein),
together with all shares of Common Stock deemed beneficially owned by the
holder's "affiliates" (as defined in Rule 144 of the Act) that would be
aggregated for purposes of determining whether a group under Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") exists,
would exceed the Warrant Holder's Restricted Ownership Percentage specified on
Schedule I to the Agreement; provided that (w) each Warrant Holder shall have
the right at any time and from time to time to reduce its Restricted Ownership
Percentage immediately upon notice to the Company or immediately in the event of
a Change in Control Transaction (other than the Merger), (x) each Warrant Holder
shall have the right at any time and from time to time to increase its
Restricted Ownership Percentage upon 61 days' prior notice to the Company or
immediately in the event of a Change in Control Transaction (other than the
Merger), (y) each Warrant Holder can make subsequent adjustments pursuant to (w)
or (x) any number of times from time to time (which adjustment shall be
effective immediately if it results in a decrease in the Restricted Ownership
Percentage or shall be effective upon 61 days' prior written notice or
immediately in the event of a Change in Control Transaction (other than the
Merger) if it results in an increase in the Restricted Ownership Percentage) and
(z) each Warrant Holder may eliminate or reinstate this limitation at any time
and from time to time (which elimination will be effective upon 61 days' prior
notice and which reinstatement will be effective immediately). Without limiting
the foregoing, in the event of a Change in Control Transaction, any holder may
reinstate immediately (in whole or in part) the requirement that any increase in
its Restricted Ownership Percentage be subject to 61 days' prior written notice,
notwithstanding such Change in Control Transaction, without imposing such
requirement on, or otherwise changing such holder's rights with respect to, any
other Change in Control Transaction. For this purpose, any material modification
of the terms of a Change in Control Transaction will be deemed to create a new
Change in Control Transaction. The term "deemed beneficially owned" as used in
this Warrant shall exclude shares that might otherwise be deemed beneficially
owned by reason of the convertibility of the Preferred Shares. A "Change in
Control Transaction" will be deemed to have occurred upon the earlier of
announcement or consummation of a transaction or series of transactions (other
than the Merger) involving (x) any consolidation or merger of the Company with
or into any other corporation or other entity or person (whether or not the
Company is the surviving corporation), or any other corporate reorganization or
transaction or series of related transactions in which in excess of 50% of the
Company's voting power is transferred through a merger, consolidation, tender
offer or similar transaction, or (y) in excess of 50% of the Corporation's Board
of Directors consists of directors not nominated by the prior Board of Directors
of the Company, or (z) any person (as defined in Section 13(d) of the Exchange
Act, together with its affiliates and associates (as such terms are defined in
Rule 405 under the Act), beneficially owns or is deemed to beneficially own (as
described in Rule 13d-3 under the Exchange Act without regard to the 60-day
exercise period) in excess of 50% of the Company's voting power. The delivery of
a Subscription Notice by the Warrant Holder shall be deemed a representation by
such holder that it is in compliance with this paragraph.
10. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant and, in the case of any such loss, theft or destruction of the Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such
8
<PAGE> 57
Warrant, the Company at its expense promptly will execute and deliver, in lieu
thereof a new Warrant of like tenor.
11. SPECIFIC PERFORMANCE; CONSENT TO JURISDICTION; CHOICE OF LAW
(a) The Company and the Warrant Holder acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall he entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Warrant and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which either of them may be entitled by
law or equity.
(b) EACH OF THE COMPANY AND THE WARRANT HOLDER (I) HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT AND (II) HEREBY WAIVES,
AND AGREES NOT TO ASSERT IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT
IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF
THE SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH OF THE COMPANY AND THE WARRANT
HOLDER 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 WARRANT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND
SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING IN THIS PARAGRAPH
SHALL AFFECT OR LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY APPLICABLE LAW.
(c) THE COMPANY AND THE WARRANT HOLDER IRREVOCABLY WAIVE THEIR
RIGHT TO TRIAL BY JURY.
(d) This Warrant shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York applicable to
contracts executed and to be performed entirely within such State.
12. ENTIRE AGREEMENT; AMENDMENTS. This Warrant, the Exhibits hereto and
the provisions contained in the Agreement or the Registration Rights Agreement
are incorporated into this Warrant and the Warrant Shares and contain the entire
understanding of the parties with respect to the matters covered hereby and
thereby and, except as specifically set forth herein and therein, neither the
Company nor the Warrant Holder makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Warrant may be
waived or amended other than by a written instrument signed by the party against
whom enforcement of any such amendment or waiver is sought.
13. NOTICES. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery or delivery by telex (with correct answer back received), telecopy or
facsimile at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service,
9
<PAGE> 58
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The addresses for such communications
shall be:
to the Company:
Access Beyond, Inc.
1300 Quince Orchard Blvd.
Gaithersburg, MD 20878
Attention: Chief Financial Officer
Facsimile: (301) 921-9149
to the Warrant Holder:
[_________________________]
[_________________________]
[_________________________]
[_________________________]
Attention: [_________________________]
Facsimile: [_________________________]
with copies to:
[_________________________]
[_________________________]
[_________________________]
[_________________________]
Attention: [_________________________]
Facsimile: [_________________________]
Either party hereto may from time to time change its address for notices under
this Section 13 by giving at least 10 days prior written notice of such changed
address to the other party hereto.
14. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.
15. ASSIGNMENT. Subject to Section 4B, this Warrant may be transferred
or assigned, in whole or in part, at any time and from time to time by the then
Warrant Holder by submitting this Warrant to the Company together with a duly
executed Assignment in substantially the form and substance of the Form of
Assignment which accompanies this Warrant and, upon the Company's receipt
hereof, and in any event,
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<PAGE> 59
within three (3) business days thereafter, the Company shall issue a Warrant to
the Warrant Holder to evidence that portion of this Warrant, if any as shall not
have been so transferred or assigned.
[SIGNATURE PAGE FOLLOWS]
11
<PAGE> 60
Dated: ACCESS BEYOND, INC.
By:_______________________________________
Name:
Title:
[CORPORATE SEAL]
Attest:
By:______________________________
Its
[PURCHASER SIGNATURE BLOCK]
By:_______________________________________
(SIGNATURE PAGE OF ACCESS BEYOND, INC. COMMON STOCK PURCHASE WARRANT)
12
<PAGE> 61
(SUBSCRIPTION NOTICE)
FORM OF WARRANT EXERCISE
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO: ACCESS BEYOND, INC.
ATTN: CHIEF FINANCIAL OFFICER
The undersigned, the holder of the within Warrant, hereby irrevocably elects
to exercise this Warrant:
_____ (A) for, and to purchase thereunder, _______ shares of Common Stock of
Access Beyond, Inc., a Delaware corporation (the "COMMON STOCK"),
and herewith, or by wire transfer, makes payment of $_________
therefor; or
_____ (B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder , ______ shares of Common Stock, and herewith makes
payment therefor with __________ Surrendered Warrant Shares.
The undersigned requests that the certificates for such shares be issued in
the name of, and
_____ (A) delivered to ______________ , whose address is ______________; or
_____ (B) electronically transmitted and credited to the account of
______________, undersigned's prime broker (Account No._________)
with Depository Trust Company through its Deposit Withdrawal Agent
Commission system.
Dated:__________________
_____________________________________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
_____________________________________________
(Address)
Tax Identification Number:___________________
13
<PAGE> 62
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns, and transfers unto
__________ the right represented by the within Warrant to purchase __________
shares of Common Stock of ACCESS BEYOND, INC., a Delaware corporation, to which
the within Warrant relates, and appoints Attorney to transfer such right on the
books of [_______________], a [__________] corporation, with full power of
substitution of premises.
Dated: ______________
_____________________________________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
_____________________________________________
(Address)
Signed in the presence of:
_________________________________
<PAGE> 63
SCHEDULE 2.1(a)
LIST OF SUBSIDIARIES
As of the date of the Agreement and as of the Initial Closing Date:
.1.
.2.
.3.
As of the Subsequent Closing Date:
.1.
.2.
.3.
.4.
<PAGE> 64
SCHEDULE 2.1(C)
SENIORITY OF OUTSTANDING PREFERRED STOCK
<PAGE> 65
SCHEDULE 2.1(f)
UPDATES TO SEC DOCUMENTS
<PAGE> 66
SCHEDULE 2.1(m)
INTELLECTUAL PROPERTY INFRINGEMENT OF SUPPLIERS
<PAGE> 67
SCHEDULE 2.1(r)
OUTSTANDING SECURITIES SUBJECT TO REGISTRATION RIGHTS, ETC.
<PAGE> 68
SCHEDULE 2.1(y)
UNSATISFIED CLOSING CONDITIONS TO THE MERGER
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
November 12, 1997, between Access Beyond, Inc., a Delaware corporation with
offices at 1300 Quince Orchard Boulevard, Gaithersburg, Maryland (the "Company")
and each of the entities listed under "Investors" on the signature page hereto
(each an "Investor" and collectively the "Investors"), each with offices at the
address listed under such Investor's name on Schedule I hereto.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Preferred Stock Investment Agreement
by and between the Company and the Investors (the "Purchase Agreement"), the
Company has agreed to sell and issue to the Investors, and the Investors have
agreed to purchase from the Company, an aggregate of up to 45,000 shares,
Liquidation Preference $1,000 of the Company's 6% Cumulative Convertible
Preferred Stock (the "Preferred Shares") at two separate closings and subject to
the terms and conditions set forth therein; and
WHEREAS, the Purchase Agreement contemplates that the Preferred Shares
will be convertible into shares (the "Common Shares") of common stock, par value
$.01, of the Company ("Common Stock") pursuant to the terms and conditions set
forth in the Certificate of Designations for the Preferred Shares (the
"Certificate");
WHEREAS, the Purchase Agreement contemplates that if the Company
exercises its option to redeem the Preferred Shares it will issue Warrants to
the Investors, which Warrants are themselves exercisable by the Holders for
Warrant Shares; and
WHEREAS, pursuant to the terms of, and in partial consideration for, the
Investors' agreement to enter into the Purchase Agreement, the Company has
agreed to provide the Investors with certain registration rights with respect to
the Common Shares and Warrant Shares and certain other rights and remedies with
respect to the Preferred Shares as set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Purchase
Agreement and this Agreement, the Company and the Investors agree as follows:
1. Certain Definitions. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Purchase Agreement or the
Certificate. As used in this Agreement, the following terms shall have the
following respective meanings:
"Applicable Closing" shall mean the Initial Closing when referring to
the issuance of Preferred Shares by the Company on the Initial Closing Date, the
Subsequent Closing when referring to the issuance of Preferred Shares by the
Company on the Subsequent Closing Date, and the Warrant Closing when referring
to the issuance of Warrants on a Warrant Closing Date, each as the context
requires.
<PAGE> 2
"Applicable Closing Date" means the Initial Closing Date, the Subsequent
Closing Date and the Warrant Closing Date, each as the context requires.
"Closing" and "Closing Date" shall have the meanings ascribed to such
terms in the Purchase Agreement.
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Holder" and "Holders" shall include an Investor or the Investors,
respectively, and any transferee of the Preferred Shares, Warrants, Common
Shares, Warrant Shares or Registrable Securities which have not been sold to the
public to whom the registration rights conferred by this Agreement have been
transferred in compliance with this Agreement.
"Initial Closing" and "Initial Closing Date" shall have the meanings
ascribed to such terms in the Purchase Agreement.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean: (i) the Common Shares or other
securities issued or issuable to each Holder or its permitted transferee or
designee upon conversion of the Preferred Shares; (ii) the Warrant Shares or
other securities issued or issuable to each Holder or its permitted transferee
or designee upon exercise of the Warrants; (iii) securities issued or issuable
upon any stock split, stock dividend, recapitalization or similar event with
respect to such Common Shares or Warrant Shares; and (iv) any other security
issued as a dividend or other distribution with respect to, in exchange for or
in replacement of Registrable Securities.
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements of counsel to Holders
(using a single counsel selected by a majority in interest of the Holders) for a
review of the Registration Statement and related documents, and the expense of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company).
"Registration Statement" shall have the meaning set forth in Section 2(a)
herein.
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities Act" or "Act" shall mean the Securities Act of 1933, as
amended.
2
<PAGE> 3
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses".
"Subsequent Closing" and "Subsequent Closing Date" shall have the
meanings ascribed to such terms in the Purchase Agreement.
"Warrants" shall mean the warrants in form and substance of Exhibit 1.1B
to the Purchase Agreement between the Company and the Investors, dated as of the
date hereof.
"Warrant Closing" shall mean an issuance of Warrants by the Company.
"Warrant Shares" shall mean shares of Common Stock of the Company
issuable upon exercise of the Warrants.
"Warrant Closing Date" shall mean the date of a Warrant Closing
2. Registration Requirements. The Company shall use its best efforts to
effect the registration of the Registrable Securities (including without
limitation the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act) as would permit or facilitate the sale or distribution of all
the Registrable Securities in the manner (including manner of sale) and in all
states reasonably requested by the Holder. Subject to Section 13(m), such best
efforts by the Company shall include the following:
(a) The Company shall, as expeditiously as reasonably possible
after the Applicable Closing Date:
(i) But in any event within 45 days of the Applicable
Closing Date, prepare and file a registration statement with the
Commission pursuant to Rule 415 under the Securities Act on Form
S-3 under the Securities Act (or in the event that the Company is
ineligible to use such form, such other form as the Company is
eligible to use under the Securities Act) covering the Registrable
Securities ("Registration Statement"), which Registration
Statement, to the extent allowable under the Securities Act and
the rules promulgated thereunder (including Rule 416), shall state
that such Registration Statement also covers such indeterminate
number of additional shares of Common Stock as may become issuable
upon conversion of the Preferred Shares or exercise of the
Warrants, inter alia, to prevent dilution resulting from stock
splits, stock dividends or similar transactions. The number of
shares of Common Stock initially included in such Registration
Statement shall be no less than the sum of (A) two times the sum
of the number of Common Shares that are then issuable
3
<PAGE> 4
upon conversion of the Preferred Shares then outstanding plus (B)
the number of Warrant Shares issuable upon exercise of the
Warrants then outstanding, in each case without regard to any
limitation on the Investor's ability to convert such Preferred
Shares. Thereafter the Company shall use its best efforts to cause
such Registration Statement and other filings to be declared
effective (including by promptly responding to all Commission
comments and inquiries and filing requests for acceleration with
the Commission as promptly as possible) as soon as possible, and
in any event prior to 110 days following the Applicable Closing
Date. The Company shall provide Holders reasonable opportunity to
review any such Registration Statement or amendment or supplement
thereto prior to filing.
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used
in connection with such Registration Statement as may be necessary
to comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration
Statement and promptly notify the Holders of the filing and
effectiveness of such Registration Statement and any amendments or
supplements.
(iii) Furnish to each Holder such numbers of copies of a
current prospectus conforming with the requirements of the Act,
copies of the Registration Statement, any amendment or supplement
thereto and any documents incorporated by reference therein and
such other documents as such Holder may reasonably require in
order to facilitate the disposition of Registrable Securities
owned by such Holder.
(iv) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other
securities or "Blue Sky" laws of such jurisdictions as shall be
reasonably requested by each Holder; provided that the Company
shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(v) Notify each Holder immediately of the happening of any
event as a result of which the prospectus (including any
supplements thereto or thereof) included in such Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then
4
<PAGE> 5
existing, and use its best efforts to promptly update and/or
correct such prospectus.
(vi) Notify each Holder immediately of the issuance by the
Commission or any state securities commission or agency of any
stop order suspending the effectiveness of the Registration
Statement or the threat or initiation of any proceedings for that
purpose. The Company shall use its best efforts to prevent the
issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible time.
(vii) Permit counsel to each Holder to review the
Registration Statement and all amendments and supplements thereto
within a reasonable period of time prior to each filing, and shall
not file any document in a form to which such counsel reasonably
objects.
(viii) Use its best efforts to list the Registrable
Securities covered by such Registration Statement by the time that
the Registration Statement is declared effective with all
securities exchange(s) and/or markets on which the Common Stock is
then listed and prepare and file any required filings with the
National Association of Securities Dealers, Inc. or any exchange
or market where the Common Shares are traded.
(ix) Take all steps necessary to enable Holders to avail
themselves of the prospectus delivery mechanism set forth in Rule
153 (or successor thereto) under the Act.
(b) Set forth below in this Section 2(b) are (I) events that may
arise that the Investors consider will interfere with the full enjoyment of
their rights under this Agreement, the Purchase Agreement and the Certificate
(the "Interfering Events"), and (II) certain remedies applicable in each of
these events.
Paragraphs (i) through (iv) of this Section 2(b) describe
the Interfering Events, provide a remedy to the Investors if an Interfering
Event occurs and provide that the Investors may require that the Company redeem
outstanding Preferred Shares at a specified price if certain Interfering Events
are not timely cured.
Paragraph (v) provides, inter alia, that if cash payments
required as the remedy in the case of certain of the Interfering Events are not
paid when due, the Company may be required by the Investors to redeem
outstanding Preferred Shares at a specified price.
Paragraph (vi) provides, inter alia, that the Investors have
the right to specific performance.
5
<PAGE> 6
The preceding paragraphs in this Section 2(b) are meant to
serve only as an introduction to this Section 2(b), are for convenience only,
and are not to be considered in applying, construing or interpreting this
Section 2(b).
(i) Delay in Effectiveness of Registration Statement. The
Company agrees that it shall file a Registration Statement (or an
amendment to an already effective Registration Statement)
complying with the requirements of this Agreement promptly
following each Applicable Closing Date, but in any event within 45
days after each Applicable Closing Date, and shall use its best
efforts to cause each such Registration Statement to become
effective within 110 days from each Applicable Closing Date. In
the event that any such Registration Statement has not been filed
within 45 days after the Applicable Closing Date, or has not been
declared effective within 110 days from the Applicable Closing
Date, then the Company shall pay in cash to each Holder a default
payment in an amount equal to two percent (2%) of the Liquidation
Preference of the Preferred Shares held by such Holder that should
have been registered on such Registration Statement for each
30-day period that such failure continues. If any such
Registration Statement has not been declared effective within 210
days after the Applicable Closing Date, then each Holder shall
have the right to sell any or all of its Preferred Shares to the
Company for consideration (the "Mandatory Purchase Price") equal
to the sum of (A) the price in cash at which the Company may
optionally redeem Preferred Shares pursuant to Section 4(e) of the
Certificate, plus (B) Warrants, in amounts and on terms equivalent
to those required to be delivered by the Company in connection
with any optional redemption under Section 4(e) of the
Certificate. Payment of such cash amount and delivery of Warrants
shall be due and payable from the Company to such Holder within 5
Trading Days of demand therefor.
(ii) No Listing; Premium Price Redemption for
Delisting of Class of Shares.
(A) In the event that the Company fails, refuses or
for any other reason is unable to cause the Registrable Securities
covered by any Registration Statement to be listed with the Nasdaq
NMS or one of the other Approved Markets at all times during the
period ("Listing Period") from the 110th day following the Initial
Closing Date until the Mandatory Conversion Date (as defined in
the Certificate; provided that such date shall be deferred 1.5
days for each day that there is no
6
<PAGE> 7
Effective Registration) then the Company shall pay in cash to each
Holder a default payment in an amount equal to two percent (2%) of
the Liquidation Preference of the Preferred Shares covered by such
Registration Statement and held by such Holder for each 30-day
period during the Listing Period from and after such failure,
refusal or inability to so list the Registrable Securities until
the Registrable Securities are so listed.
(B) In the event that shares of Common Stock of the
Company are not listed on any of the Approved Markets at all times
following the Initial Closing Date and remain delisted for 60
consecutive days, then at the option of each Holder and to the
extent such Holder so elects, each Holder shall have the right to
sell to the Company the Preferred Shares held by such Holder, in
whole or in part, for the consideration and on the terms set forth
in Section 2(b)(i) above.
(iii) Blackout Periods. In the event any Holder's ability to
sell Registrable Securities under any Registration Statement is
suspended for more than (i) twenty (20) consecutive Trading Days
in the aggregate or (ii) thirty (30) Trading Days in any 365 day
period beginning with the Initial Closing Date or an anniversary
thereof ("Suspension Grace Period"), including without limitation
by reason of a suspension of trading of the Common Stock on the
Nasdaq NMS (exclusive of a general trading suspension on the
Nasdaq NMS lasting no more than two Trading Days), any suspension
or stop order with respect to the Registration Statement or the
fact that an event has occurred as a result of which the
prospectus (including any supplements thereto) included in such
Registration Statement then in effect includes an untrue statement
of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, then the
Company shall pay in cash to each Holder a default payment in an
amount equal to two percent (2%) of the Liquidation Preference for
the Preferred Shares held by such Holder for each 30-day period
from and after the expiration of the Suspension Grace Period and
continuing until the termination or cure of the suspension, stop
order or event giving rise to the Suspension Grace Period. At any
time after the tenth day following the expiration of the
Suspension Grace Period, a Holder shall have the right to sell to
the Company its Preferred
7
<PAGE> 8
Shares in whole or in part for the consideration and on the terms
set forth in Section 2(b)(i) above.
(iv) Conversion Deficiency; Mandatory Purchase Price
Redemption for Conversion Deficiency. In the event that the
Company, after receipt of a Conversion Notice, (x) does not have a
sufficient number of Common Shares or Warrant Shares authorized
and available to satisfy the Company's obligations to any Holder
upon receipt of a Conversion Notice (as defined in the
Certificate), (y) is otherwise unable but willing (which shall be
limited to the existence of (I) a lack of a sufficient number of
authorized and available Common Shares or Warrant Shares, other
than authorization deficiencies satisfying the provisions of
Section 2(b)(iv)(B)(I) below and (II) a force majeure event
resulting in the inability of the Company's transfer agent to
process the required conversion), or (z) is unwilling to issue
such Common Shares or Warrant Shares (including without limitation
by reason of the limit described in Section 10 below)(each, a
"Conversion Deficiency") in accordance with the terms of the
Certificate for any reason, then:
(A) The Company shall pay in cash to each Holder a
default payment in an amount equal to two percent (2%) of the
Liquidation Preference for the outstanding Preferred Shares held
by such Holder for each 30-day period that the Company fails or
refuses to issue Common Shares or Warrant Shares in accordance
with the Certificate terms (such amount not being payable in
respect of Preferred Shares actually converted into Common
Shares); and
(B) At any time, as applicable, (I) seventy days (in
the case of Section (iv)(x) above, provided that the deficiency of
authorized Common Shares or Warrant Shares was caused by one or a
series of market events occurring within a 7 Trading Day period,
the Company previously was in compliance with its covenant to keep
a sufficient number of Common Shares and Warrant Shares authorized
and available and promptly takes effective action to authorize and
make available more Common Shares and Warrant Shares in response
to market changes necessitating such action, and provided further
that the Company has not used Common Shares and Warrant Shares
reserved for the Holders for other purposes), (II) thirty days (in
the case of Section (iv)(y) above), or (III) five days (in the
case of Section (iv)(z) above) after the commencement of the
running of the first 30-day period described above in clause (A)
of this paragraph (iv), at the request of any
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<PAGE> 9
Holder pursuant to a redemption notice, (unless the Company has,
within the relevant seventy, thirty or five day period, as
applicable, issued the Common Shares or Warrant Shares required by
such Conversion Notice) the Company promptly (1) shall purchase
from such Holder, for the consideration and on the terms set forth
in Section 2(b)(i) above, the outstanding Preferred Shares equal
to such Holder's pro rata share of the "Deficiency", as such terms
are defined below, if the failure to issue Common Shares results
from the lack of a sufficient number thereof and (2) shall
purchase all of such Holder's Preferred Shares (or such portion
requested by such Holder) for such consideration and on such terms
if the failure to issue Common Shares results from any other
cause. The "Deficiency" shall be equal to the amount of
outstanding Preferred Shares that would not be able to be
converted for Common Shares, due to an insufficient number of
Common Shares or Warrant Shares available, if all the outstanding
Preferred Shares were submitted for conversion at the Conversion
Price set forth in the Certificate as of the date such Deficiency
is determined.
(v) Liquidated Damages.
(A) The Company acknowledges that any failure, refusal
or inability by the Company described in the foregoing paragraphs
(i) through (iv) will cause the Holders to suffer damages in an
amount that will be difficult to ascertain, including without
limitation damages resulting from the loss of liquidity in the
Registrable Securities and the additional investment risk in
holding the Registrable Securities. Accordingly, the parties agree
that it is appropriate to include in this Agreement the foregoing
provisions for default payments and mandatory redemptions in order
to compensate the Holders for such damages. The parties
acknowledge and agree that the default payments and mandatory
redemptions set forth above represent the parties' good faith
effort to quantify such damages and, as such, agree (after
consultation with counsel) that the form and amount of such
default payments are reasonable and will not constitute a penalty.
(B) Each default payment provided for in the foregoing
paragraphs (i) through (iv) shall be in addition to each other
default payment; provided, however, that in no event shall the
Company be obligated to pay to any Holder default payments in an
aggregate amount greater than two percent (2%) of the Liquidation
Preference of the Preferred Shares held by such Holder for any
30-day period. All default payments required to be made in
connection with the above provisions shall be paid in cash by the
tenth (10th) day of each next succeeding calendar month (which
payments shall be pro rata on a per diem basis for any period of
less than 30 days).
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<PAGE> 10
(C) In the event that the Company fails or refuses to
pay any default payment when due, at any Holder's request and
option, the Company shall purchase all (or such portion requested
by the Holder) of the Preferred Shares held by such Holder (with
default payments accruing through the date of such purchase),
within five (5) Trading Days of such request, for the
consideration and on the terms set forth in Section 2(b)(i) above,
provided that such Holder may revoke such request at any time
prior to receipt of such payment of such purchase price. Until
such time as the Company purchases such Preferred Shares at the
request of such Holder pursuant to the preceding sentence, at any
Holder's request and option the Company shall as to such Holder
pay such amount by adding and including the amount of such default
payment to the Liquidation Preference of a Holder's Preferred
Shares.
(vi) Cumulative Remedies. The default payments and mandatory
purchases provided for above are in addition to and not in lieu or
limitation of any other rights the Holders may have at law, in
equity or under the terms of the Certificate, the Purchase
Agreement, the Warrants or this Agreement, including without
limitation the right to specific performance. Each Holder shall be
entitled to specific performance of any and all obligations of the
Company in connection with the registration rights of the Holders
hereunder.
(vii) Deferral of Mandatory Conversion Date. In the event of
a failure of Effective Registration, including without limitation
by reason of any of the circumstances described in the foregoing
clauses (i) through (iv) above, then the Mandatory Conversion Date
shall be deferred by 1.5 days for each day that any of the
circumstances in clauses (i), (ii), (iii) (without regard to the
applicability of the Suspension Grace Period), or (iv) exist or
there is otherwise a lack of Effective Registration.
(viii)Remedies for Registrable Securities. In any case in
which a Holder of Preferred Shares has the right to cause the
purchase of its Preferred Shares under this Section 2(b), it shall
also have the right to cause the purchase of the Registrable
Securities that it owns as follows: in the case of Common Shares
issued to such Holder pursuant to conversion of Preferred Shares
and Warrant Shares issued to such Holder pursuant to exercise of
Warrants, such shares shall be purchased at a price per share
("Common Purchase Price") equal to the closing bid price of a
share of Common Stock on the Approved Market on which it is traded
as of the time such Common Shares or Warrant Shares were received
pursuant to conversion of Preferred Shares or exercise of the
Warrants, as the case may be; provided, however, that such Holder
may revoke such
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<PAGE> 11
request at any time prior to receipt of such payment of such
redemption price.
In the case in which a Holder of Preferred Shares
would have the right to receive default payments with respect to
Preferred Shares under Section 2(b), it shall also have the right
to receive default payments with respect to Registrable Securities
owned by it in an amount equal to two percent (2%) per 30-day
period of the aggregate Common Purchase Price amount of such
Registrable Securities.
(ix) Mandatory Purchase Period. In the event a Holder has the
right to cause the Company to purchase Preferred Shares at the
Mandatory Purchase Price or Registrable Securities at the Common
Purchase Price, the period in which the Holder may exercise its
right to cause the Company to so purchase those securities (the
"Mandatory Purchase Period") shall terminate 90 days after the
Company notifies the Holder in writing of such purchase right
(which notice will specify the subsection(s) of Section 2(b)
pursuant to which the Holder may cause such purchase); provided
that if the Company does not honor the Holder's request that the
Company purchase the applicable securities in accordance with the
terms of this Agreement, the Holder may revoke its request for
such purchase by the Company, whereupon another Mandatory Purchase
Period will begin. Nothing in this Section 2(b)(ix) will limit the
right of a Holder to revoke any request to the Company seeking
repurchase at the Mandatory Purchase Price or at the Common
Purchase Price before such repurchase is effected and without
beginning a new Mandatory Purchase Period.
(c) If at any time and from time to time the Company shall
determine to register any of its securities either for its own account or the
account of a security holder or holders exercising their respective demand
registration rights, other than a registration relating solely to employee
benefit plans or a registration statement on Form S-4, the Company will:
(i) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by any Holder
within thirty (30) days after receipt of the written notice from
the Company described in clause (i) above, except as set forth in
Section 2(d) below. Such written request may specify all or a part
of a Holder's Registrable Securities.
(d) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
2(c). All Holders proposing to distribute their securities through such
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<PAGE> 12
underwriting shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
Section 2(c) or Section 2(d), if the underwriter in good faith determines that
marketing factors require a limitation on the number of securities underwritten,
the underwriter may (subject to the proportional allocation below) exclude from
such registration and underwriting some or all of the Registrable Securities
which would otherwise be underwritten pursuant hereto. The Company shall so
advise all holders of securities requesting registration, and the number of
shares of securities that are entitled to be included in the registration and
underwriting shall be allocated in the following manner. The number of shares
that may be included in the registration and underwriting shall be allocated
among all such Holders and other shareholders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities and other
securities which they had requested to be included in such registration at the
time of filing the registration statement. If any Holder of Registrable
Securities or any other shareholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(e) The Company shall make available for inspection by the
Holders, representative(s) of all the Holders together, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney or accountant retained by any Holder or underwriter, all financial and
other records customary for purposes of the Holders' due diligence examination
of the Company and review of any Registration Statement, all SEC Documents (as
defined in the Purchase Agreement) filed subsequent to the Closing, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such representative, underwriter, attorney or accountant in connection
with such Registration Statement, provided that such parties agree to keep such
information confidential.
(f) Subject to Section 2(b) above, the Company may suspend the use
of any prospectus used in connection with the Registration Statement only in the
event, and for such period of time as, such a suspension is required by the
rules and regulations of the Commission. The Company will use its best efforts
to cause such suspension to terminate at the earliest possible date.
(g) The Company shall file a Registration Statement with respect
to any newly authorized and/or reserved shares for purposes of complying
herewith within forty-five (45) days of any shareholders meeting authorizing
same and shall use its best efforts to cause such Registration Statement to
become effective within one hundred and ten (110) days of such shareholders
meeting. If the Holders become entitled, pursuant to an event described in
clause (iii) of the definition of Registrable Securities, to receive any
securities in respect of Registrable Securities that were already included in a
Registration Statement, subsequent to the date such Registration Statement is
declared effective, and the Company is unable under the securities laws to add
such securities to the then effective Registration Statement, the Company shall
promptly file, in accordance with the procedures set forth herein, an additional
Registration Statement with respect to such newly Registrable Securities. The
Company shall use its best efforts to (i) cause any such additional Registration
Statement, when filed, to become effective under the Securities Act, and (ii)
keep such additional Registration Statement effective during the period
described in Section 5 below and use its best efforts to cause such Registration
Statement to become effective within 110 days of that date that the need to file
the Registration Statement arose. All of the registration rights and remedies
under this
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<PAGE> 13
Agreement shall apply to the registration of such newly reserved shares and such
new Registrable Securities, including without limitation the provisions
providing for default payments contained herein.
3. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses of a Holder shall be borne by such Holder.
4. Registration on Form S-3. The Company shall use its best efforts to
remain qualified for registration on Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
such form as the Company is eligible to use under the Securities Act. The
Company will use Form S-3 whenever available, and will use another Form only if,
and to the extent that, Form S-3 is not available.
5. Registration Period. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will use its best efforts to
keep such registration effective until all the Holders have completed the sales
or distribution described in the Registration Statement relating thereto or, if
earlier, until such Registerable Securities may be sold under Rule 144(k)
(provided that the Company's transfer agent has accepted an instruction from the
Company to such effect).
6. Indemnification.
(a) The Company Indemnity. The Company will indemnify each Holder,
each of its officers, directors and partners, and each person controlling each
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls, within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, any underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on 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 in light of the circumstances under which they were made, or any
violation by the Company of the Securities Act or any state securities law or in
either case, any rule or regulation thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration, qualification or compliance, and will reimburse each Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to a Holder to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or the underwriter (if any) therefor and
intended to be specifically for use therein. The indemnity agreement contained
in this Section 6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent will not be unreasonably withheld).
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<PAGE> 14
(b) Holder Indemnity. Each Holder will, severally and not jointly,
if Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder, each
other Holder (if any), and each of their officers, directors and partners, and
each person controlling such other Holder(s) against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading in light of the circumstances under which they were made, and will
reimburse the Company and such other Holder(s) and their directors, officers and
partners, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
intended to be specifically for use therein, and provided that the maximum
amount for which such Holder shall be liable under this indemnity shall not
exceed the net proceeds received by such Holder from the sale of the Registrable
Securities pursuant to the registration statement in question. The indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities if such settlement
is effected without the consent of such Holder (which consent shall not be
unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this
Section 6 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at its own expense, and provided further that
the failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Article except to
the extent that the Indemnifying Party is materially and adversely affected by
such failure to provide notice. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Each Indemnified Party shall furnish such
non-privileged information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
7. Contribution. If the indemnification provided for in Section 6 herein
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each 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 or
liabilities as between the Company on the one hand and any Holder on the
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<PAGE> 15
other, in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 7 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs 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.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of any Holder, the net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the registration statement in question or
(ii) in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such Holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements contained in
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Purchase Agreement or
any underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall furnish to the Company such
information regarding such Holder and the distribution and/or sale proposed by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. The intended method or methods of
disposition and/or sale (Plan of Distribution) of such securities as so provided
by such Investor shall be included without alteration in the Registration
Statement covering the Registrable Securities and shall not be changed without
written consent of such Holder.
10. Limit on Stock Issuances. In the event that the Company is unable
to issue (i) any Common Shares upon conversion of Preferred Shares or (ii) any
Warrant Shares, due to the rules or regulations of any
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<PAGE> 16
market or exchange regulator for the market or exchange on which the Common
Shares or Warrant Shares are then trading, the Company shall, at the request of
any Holder promptly following such determination, purchase such Preferred Shares
of such Holder which cannot be converted, or Warrant Shares which cannot be
issued, at a purchase price equal to the Mandatory Purchase Price.
11. Replacement Certificates. The certificate(s) representing the Common
Shares or Warrant Shares held by any Investor (or then Holder) may be exchanged
by such Investor (or such Holder) at any time and from time to time for
certificates with different denominations representing an equal aggregate number
of Common Shares or Warrant Shares, as reasonably requested by such Investor (or
such Holder) upon surrendering the same. No service charge will be made for such
registration or transfer or exchange.
12. Transfer or Assignment. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Investors by
the Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Preferred Shares or Warrants, and all other rights granted to the
Investors by the Company hereunder may be transferred or assigned to any
transferee or assignee of any Preferred Shares or Warrants; provided in each
case that the Company must be given written notice by the such Investor at the
time of or within a reasonable time after said transfer or assignment, stating
the name and address of said transferee or assignee and identifying the
securities with respect to which such registration rights are being transferred
or assigned; and provided further that the transferee or assignee of such rights
agrees in writing to be bound by the registration provisions of this Agreement.
13. Miscellaneous.
(a) Remedies. The Company and each of the Investors acknowledge
and agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity.
(b) Jurisdiction. THE COMPANY AND EACH OF THE INVESTORS (I) HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT, THE NEW YORK STATE COURTS AND OTHER COURTS OF THE UNITED STATES SITTING
IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSES OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND (II) HEREBY WAIVES, AND AGREES
NOT TO ASSERT IN ANY SUCH SUIT ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER. THE COMPANY AND EACH OF THE INVESTORS 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 IN THIS PARAGRAPH SHALL AFFECT OR
LIMIT ANY RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
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(c) Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing by facsimile, mail or
personal delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Access Beyond, Inc.
1300 Quince Orchard Boulevard
Gaithersburg, Maryland
Facsimile: (301) 921-9149
Attention: Chief Financial Officer
with copies to:
Morrison Cohen Singer & Weinstein, LLP
750 Lexington Avenue
New York, New York 10022
Attention: Stephen I. Budow, Esq.
Facsimile: (212) 735-8708
and:
Womble Carlyle Sandrige & Rice
1275 Peachtree Street, N.E., Suite 700
Atlanta, Georgia 30309-3514
Attention G. Donald Johnson, Esq.
Facsimile: (404) 888-7490
to the Investors:
To each Investor at the address and/or fax number set forth on
Schedule I of this Agreement.
with copies to:
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue
New York, New York 10176
Facsimile: (212) 986-8866
Attention: Stephen M. Schultz, Esq.
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
(d) Indemnity. Each party shall indemnify each other party against
any loss, cost or damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty, covenant or
agreement in this Agreement.
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(e) Waivers. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter. The representations and warranties and the agreements and
covenants of the Company and each Investor contained herein shall survive the
Closing.
(f) Execution in Counterpart. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart.
(g) Publicity. The Company agrees that it will not disclose, and
will not include in any public announcement, the name of any Investor without
its consent, unless and until such disclosure is required by law or applicable
regulation, and then only to the extent of such requirement. The Company agrees
to deliver a copy of any public announcement regarding the matters covered by
this Agreement or any agreement or document executed herewith to each Investor
and any public announcement including the name of an Investor to such Investor,
prior to the publication of such announcements.
(h) Entire Agreement; Amendment and Termination. This Agreement,
together with the Purchase Agreement, the Certificate and the Warrants and the
agreements and documents contemplated hereby and thereby, contains the entire
understanding and agreement of the parties, and may not be modified, amended or
terminated except by a written agreement signed by all parties.
(i) Governing Law. This Agreement and the validity and performance
of the terms hereof shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts executed and to be
performed entirely within such state, except to the extent that the law of the
State of Delaware regulates the Company's issuance of securities.
(j) Severability. The parties acknowledge and agree that the
Investors are not agents, affiliates or partners of each other, that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint, that no Investor shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
any other Investor, and that any rights granted to "Investors" hereunder shall
be enforceable by each Investor hereunder.
(k) Jury Trial. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY
JURY.
(l) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
(m) Timing of Registration. Nothing in this Agreement shall
require the Company to register the Common Shares issuable upon conversion of
the Preferred Shares issued at the Initial Closing until after the Initial
Closing Date, the Common Shares issuable upon conversion of the Preferred Shares
issued at the Subsequent Closing until after the Subsequent Closing Date, or the
Warrant Shares issuable upon exercise of the Warrants issued at a particular
Warrant Closing until after the applicable Warrant Closing Date. Common Shares
and Warrant Shares shall not be considered Registrable Securities for
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purposes of this Agreement until after the Applicable Closing Date on which the
Preferred Shares or Warrants convertible into or exercisable for such Common
Shares or Warrant Shares has occurred.
19
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ACCESS BEYOND, INC.
By: /s/ Ronald A. Howard
_____________________________________
Name:
Title:
INVESTORS:
ELLIOTT ASSOCIATES, L.P.
By: /s/ Paul E. Singer
_____________________________________
Paul E. Singer,
General Partner
WESTGATE INTERNATIONAL, L.P.
By: /s/ Paul E. Singer
_____________________________________
Paul E. Singer
President
Martley International, Inc.
Attorney-in-Fact for
Westgate International, L.P.
MONTROSE INVESTMENTS LTD.
By: /s/
_____________________________________
Name:
Title:
WESTOVER INVESTMENTS, L.P.
By: /s/
_____________________________________
Name:
Title:
20
<PAGE> 21
STARK INTERNATIONAL, LTD.
By: /s/
_____________________________________
Name:
Title:
SHEPHERD INVESTMENTS INTERNATIONAL, LTD.
By: /s/
_____________________________________
Name:
Title:
RAMIUS FUND, LTD.
By: AG. RAMIUS PARTNERS, L.L.C.,
Investment Manager
By: /s/ Michael L. Gordon
_____________________________________
Name: Michael L. Gordon
Title: Managing Officer
[SIGNATURE PAGE TO ACCESS BEYOND, INC.
REGISTRATION RIGHTS AGREEMENT]
21
<PAGE> 22
GAM ARBITRAGE INVESTMENTS, INC.
By: Angelo Gordon & Co., L.P.,
Investment Manager
By: /s/ Michael L. Gordon
_____________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
LEONARDO, L.P.
By: ANGELO, GORDON & CO., L.P.,
General Partner
By: /s/ Michael L. Gordon
_____________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
RAPHAEL, L.P.
By: /s/ Michael L. Gordon
_____________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
AG SUPER FUND INTERNATIONAL PARTNERS, L.P.
By: ANGELO, GORDON & CO., L.P.,
General Partner
By: /s/ Michael L. Gordon
_____________________________________
Name: Michael L. Gordon
Title: Chief Operating Officer
[SIGNATURE PAGE TO ACCESS BEYOND, INC. REGISTRATION
RIGHTS AGREEMENT]
22
<PAGE> 23
SCHEDULE I
<TABLE>
<CAPTION>
NAME OF PURCHASER ADDRESS OF PURCHASER
- ----------------- --------------------
<S> <C>
1. Elliott Associates, L.P. 712 Fifth Avenue, 36th Floor
New York, New York 10019
Attn: Mark Brodsky
2. Westgate International, L.P. c/o Stonington Management Corporation
712 Fifth Avenue, 36th Floor
New York, New York 10019
Attn: Mark Brodsky
3. Westover Investments, L.P. 777 Main Street, Suite 2750
Fort Worth, Texas 76102
Attn: Mike Reese
4. Montrose Investments Ltd. 777 Main Street, Suite 2750
Forth Worth, Texas 76102
Attn: Mike Reese
5. Sheperd Investments International, Ltd. c/o Staro Asset Management
1500 W. Market Street
Suite 200
Mequon, WI 53092
6. Stark International c/o Staro Asset Management
1500 W. Market Street
Suite 200
Mequon, WI 53092
7. Ramius Fund, Ltd. c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, New York 10167
8. Raphael, L.P. c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, New York 10167
9. Leonardo, L.P. c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, New York 10167
10. GAM Arbitrage Investments, Inc. c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, New York 10167
11. AG Super Fund International Partners, L.P. c/o Angelo, Gordon & Co., L.P.
245 Park Avenue, 26th Floor
New York, New York 10167
</TABLE>
23
