<PAGE>
As filed with the Securities and Exchange Commission on September 24, 1999
Registration No. 333-82697
================================================================================
SECURITIES AND EXCHANGE COMMISSION
___________________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
___________________
C-COR.net Corp.
(Exact name of registrant as specified in its charter)
Pennsylvania 24-0811591
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 Decibel Road
State College, Pennsylvania 16801
(814) 238-2461
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
David A. Woodle, President
60 Decibel Road
State College, Pennsylvania 16801-7530
(814) 238-2461
(Name, address, including zip code, and telephone number, Including area code,
of agent for service)
___________________
Copies to:
Robert C. Gerlach, Esq.
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103
(215) 665-8500
___________________
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement is declared effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================
Proposed Proposed
Amount maximum maximum
Title of each class of to be offering price aggregate Amount of
securities to be registered registered(1)(2) per unit(3) offering price(3) registration fee
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value.... 1,800,253 (3) $50,407,084 $14,013.17(4)
===============================================================================================================
</TABLE>
(1) Shares of Common Stock which may be offered pursuant to this registration
statement include 366,930 shares issuable upon the exercise of certain
warrants (the "Warrants").
(2) Pursuant to Rule 416, this registration statement shall be deemed to cover
an indeterminate number of additional shares of Common Stock issuable
pursuant to the anti-dilution provisions of the Warrants or in the event
the number of outstanding shares is increased by stock split, stock
dividend and similar transactions.
(3) In accordance with Rules 457 (c) and (g), the price shown is estimated
solely for the purposes of calculating the registration fee, and is based
on the average of the reported high and low sales prices of the common
stock as reported on the Nasdaq National Market on July 9, 1999, which was
$28.00.
(4) This amount has been previously paid.
_____________________
The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not an offer to buy these securities in any
State where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 24, 1999
PROSPECTUS
1,800,253 Shares
C-COR.net Corp.
Common Stock
____________
The common stock, $.10 par value per share, is traded on The Nasdaq
National Market under the symbol "CCBL". On September 23, 1999, the reported
closing price of the common stock was $33.6875 per share. The common stock is
only being offered by the selling shareholders listed in this prospectus.
____________
An investment in the shares offered hereby involves a high degree of risk.
See "Risk Factors" beginning on page 4 of this prospectus.
____________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
____________
The date of this prospectus is __________, 1999.
<PAGE>
TABLE OF CONTENTS
PAGE
----
SUMMARY............................................................. 3
RISK FACTORS........................................................ 4
FORWARD LOOKING STATEMENTS.......................................... 10
USE OF PROCEEDS..................................................... 10
SELLING SHAREHOLDERS................................................ 10
PLAN OF DISTRIBUTION................................................ 13
THE COMPANY......................................................... 15
LEGAL MATTERS....................................................... 16
EXPERTS............................................................. 16
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..................... 16
WHERE YOU CAN FIND MORE INFORMATION................................. 17
2
<PAGE>
SUMMARY
The Offering
Securities Offered.............. Up to 1,800,253 shares of common stock, $0.10
par value, of C-COR.net Corp.
Nasdaq Symbol................... CCBL
Offeror......................... The common stock is being offered by the
selling shareholders listed in this
prospectus. None of the common stock is being
offered by us.
Use of Proceeds................. Because the common stock is being offered by
selling shareholders, we will not receive any
proceeds from this offering.
Our Address and Telephone Number
Our principle executive offices are located at 60 Decibel Road, State
College, PA 16801, and the telephone number is (814) 238-2461.
3
<PAGE>
Risk Factors
You should carefully consider the following factors before deciding to invest
in the shares. The risks and uncertainties described below are not the only
ones we face. Additional risks and uncertainties not presently known to us,
which we currently deem immaterial or which are similar to those faced by other
companies in our industry or business in general, may also impair our business
operations. If any of the following risks actually occurs, our business,
financial condition or results of future operations could be materially and
adversely affected. In such case, the trading price of our common stock could
decline, and you may lose all or part of your investment. This prospectus also
contains forward looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these forward
looking statements as a result of certain factors, including the risks we face
as described below and elsewhere in this prospectus. Please refer to "Forward
Looking Statements" on page 10.
Our customer base consists of a small number of customers in a single industry.
Historically, we have provided cable network transmission equipment to cable
operators in the United States and internationally. Most of our sales have been
to relatively few customers. Sales to our ten largest customers accounted for
approximately 72% of net sales in fiscal 1997, 74% of net sales in fiscal 1998
and 76% of net sales in fiscal 1999.
During the past 18 months there has been significant consolidation of ownership
of domestic cable systems. As a result, we expect that the concentration of our
sales among a small number of customers will continue for the foreseeable
future. Almost all of our sales are made on a purchase order basis and none of
our customers has entered into a long-term agreement requiring them to purchase
our products. The loss of, or any reduction in orders from, a significant
customer would harm our business. We expect that the consolidation of our
customer base may result in delays in receiving new orders or reduction in the
size of orders for our products.
A decline in capital spending in the cable industry could substantially reduce
our revenue.
Almost all of our sales have been to cable operators and we expect this to
continue for the foreseeable future. Demand for our products depends
significantly on the size and timing of capital spending by cable operators for
constructing, rebuilding or upgrading their systems. We cannot accurately
predict the growth patterns of cable operators' spending, but we believe these
patterns depend on a variety of factors, including:
. overall demand for cable services and the acceptance of new broadband
services such as Internet, telephony, video-on-demand and digital
television;
. competitive pressures, including the availability of alternative
delivery technologies such as, direct broadcast satellite, digital
subscriber line and local multipoint distribution services
. cable operators' access to financing;
. cable operators' annual budget cycles;
. the status of federal, local and foreign government regulation of
telecommunications and television broadcasting; and
. fewer construction and upgrade projects typically occurring in winter
months, and during of inclement weather.
We may be unable to manage the numerous risks and challenges associated with
our recent acquisitions of Convergence.com Corporation ("Convergence" or
"Convergence.com") and Silicon Valley Communications, Inc. ("Silicon Valley
Communications" or "SVCI") which could adversely affect our operations and
financial condition.
Recently, we have experienced significant growth, including the acquisitions of
Convergence.com and Silicon Valley Communications. These acquisitions have
placed, and we expect will continue to place, a significant strain on our
personnel, management and other resources.
We acquired Convergence.com in July 1999 to enable us to offer an integrated
package of technical services and products, including access to broadband
Internet and high speed data capabilities. Our ability
to successfully market these newly acquired services and products depends on:
. the evolution and growth of the market for high speed Internet and
broadband services;
4
<PAGE>
. assimilating Convergence.com's operations, research and development
products, personnel and culture with ours;
. our ability to successfully develop, manufacture and gain market
acceptance for Convergence.com's services and products; and
. retaining Convergence.com's key personnel.
Our acquisition of Silicon Valley Communications in September 1999 presents us
with several challenges, including:
. interfacing and integrating Silicon Valley Communications' fiber optic
product line with our existing product line;
. maintaining quality control of our expanded product line;
. integrating Silicon Valley Communications' operations and culture with
ours, including the consolidation of separate sales organizations,
engineering capabilities, manufacturing operations and support
functions; and
. retaining Silicon Valley Communications key employees, particularly in
the engineering and sales areas.
We cannot assure you that we will be able to successfully address the
challenges that these acquisitions present. Our failure to do so would likely
materially and adversely affect our business, financial condition and operating
results.
Reselling of stock issued in connection with our recent acquisitions may
adversely affect our stock price.
Subject to the effectiveness of certain registration statements filed with the
Securities and Exchange Commission and certain contractual limitations relating
to affiliates, shares issued to the Convergence.com and Silicon Valley
Communications shareholders will become eligible for resale. On various dates
between September and December 1999, 1,379,390 shares will become eligible for
resale. On various dates between January and February 2000, 1,585,455 shares
will become eligible for resale. Together, these shares will account for
approximately 25% of our outstanding shares. Furthermore, additional shares
issuable upon exercise of options and warrants will become eligible for resale
at various dates between September 1999 and February 2000. If a large portion of
these shares are sold during these time periods, our stock price will likely
experience volatility and may fall.
If AT&T decides not to deploy our fiber optic products currently being used in
the Salt Lake City, Utah field trial, then our financial results would likely
be adversely affected.
Our next generation MiniNode and MuxNode fiber optic products are being used in
AT&T's LightWire Neighborhood Broadband System concept testing field trials in
Salt Lake City, Utah. If the field trial does not result in widespread
deployment of the LightWire system, our future revenues would be adversely
affected. Likewise, if this new system is deployed but does not include our
MiniNode and MuxNode products, our future revenues would be adversely affected.
We could be adversely affected if broadband communications do not develop
rapidly.
Our core products are cable network transmission equipment for hybrid fiber
coax, commonly known as HFC, broadband distribution networks. The HFC networks
can be used to transport Internet, telephony, video-on-demand and digital
television. A significant part of the current demand for our products depends
on our customers' desire to upgrade their existing networks and offer Internet
and telephony services in addition to cable television service. There are,
however, competing technologies such as direct broadcast satellite, digital
subscriber line and local multipoint distribution services that can provide
these upgraded services to end users. Improvements in a competing technology
could result in significant price/performance advantages for that technology
which, in turn, could reduce demand for our core products.
It is difficult for us to accurately predict the broadband communications
market's future growth
5
<PAGE>
rate, size and technological direction because the market is in a relatively
early stage of development. As this market matures, it is possible that cable
operators, telephone companies or other suppliers of broadband wireless and
satellite services will decide to adopt alternative technologies or standards
that are incompatible with our products. If we are unable to design,
manufacture and market products that incorporate or are compatible with these
new technologies or standards, our business would suffer.
If we are unable to design, manufacture and market new products in a timely
manner, then we may not remain competitive.
The broadband communications market, which includes Internet and telephony
services, is characterized by continuing technological advancement, changes in
customer requirements and evolving industry standards. To compete successfully,
we must design, manufacture and market new products that provide increasingly
higher levels of performance and reliability. Our inability to design,
manufacture and market these products or to achieve broad commercial acceptance
of these products would have an adverse effect on our business.
If we are unable to profitably increase network management service revenue, our
financial results would be adversely affected.
Our ability to increase network management revenues depends on many factors
that are beyond our control. For example:
. our customers may decide not to outsource to third parties;
. we may be unable to compete effectively with our competitors,
particularly those with greater financial, technical, marketing and
other resources; and
. we may be unable to hire and retain enough qualified technical and
management personnel to support our growth plans.
In addition, the pricing structure and investment required in the network
management services
business is not well established. We may be unable to establish a business
strategy that generates adequate profitability or an adequate return on
investment.
If we are unable to retain our key personnel or recruit additional key
personnel in the future, then we may be unable to execute our business
strategy.
Our success depends on our ability to hire, retain and motivate highly
qualified personnel. Competition for qualified technical and other personnel is
intense and we may not successfully attract or retain such personnel.
Competitors and others in the past have recruited our employees and may do so
in the future. While we require our employees to sign customary agreements
concerning confidentiality and ownership of inventions, we generally do not
have employment contracts or noncompetition agreements with our personnel. If
we lose any of our key personnel, are unable to attract qualified personnel or
are delayed in hiring required personnel, particularly engineers and other
technical personnel, our business could be negatively affected.
Our reliance on several key components, subassemblies and modules used in the
manufacture of our products could restrict production.
We obtain many components, subassemblies and modules necessary for
manufacturing our products from a sole supplier or a limited group of
suppliers. Our reliance on sole or limited suppliers, particularly foreign
suppliers, and our increasing reliance on subcontractors, involves several
risks. These risks include a potential inability to obtain an adequate supply
of required components, subassemblies or modules, and reduced control over
pricing, quality and timely delivery of these components, subassemblies or
modules. We do not generally maintain long-term agreements with any of our
suppliers or subcontractors. We are currently experiencing a limited allocation
of a component for our amplifiers from a major supplier. This could affect
near-term product shipments because this is a key component in several of our
products. An inability to obtain adequate deliveries or any other circumstance,
requiring us to seek alternative sources of supply, could affect our ability to
ship our products on a timely basis, which could damage our relationships with
current and prospective customers and harm our business.
If our manufacturing facility in Mexico is affected by changes in international
trade laws,
6
<PAGE>
regulations or the political climate in Mexico, our production capacity could
be adversely affected.
We operate a manufacturing facility in Tijuana, Mexico that provides a
significant portion of our production capacity. This operation is exposed to
certain risks as a result of its location, including:
. changes in international trade laws, such as the North American Free
Trade Agreement, affecting our import and export activities;
. changes in, or expiration of, the Mexican government's Maquiladora
program, which provides economic benefits to us;
. changes in labor laws and regulations affecting our ability to hire and
retain employees;
. fluctuations of foreign currency and exchange controls;
. potential political instability and changes in the Mexican government;
. potential regulatory changes; and
. general economic conditions in Mexico.
Any of these risks could interfere with the operation of this facility and
result in reduced production, increased costs or both. In the event that this
facility's production capacity is reduced, we could fail to ship products on
schedule and could face a reduction in future orders from dissatisfied
customers. If our costs to operate this facility increase, our margins would
decrease. Reduced shipments and margins would have an adverse affect on our
financial results and could lead to a decline in our stock price.
Our competitors, some of whom are larger and more established, may have a
competitive advantage over us.
The market for cable network transmission equipment is extremely competitive
and is characterized by rapid technological change. Our current competitors
include significantly larger corporations with greater financial, technical,
marketing and other resources. Additional competition could come from new
entrants in the broadband communications equipment market.
These existing and potential competitors may be in a better position to
withstand any significant reduction in capital spending by cable operators and
keep pace with changes in technology. If any of our competitors' products or
technologies become the industry standard, our business could be seriously
harmed. We cannot assure you that we will be able to compete successfully in
the future or that competition will not harm our business.
We expect to need additional capital in the future and may not be able to
secure adequate funds on terms acceptable to us.
We currently anticipate that our existing cash balance, available line of credit
and cash flow expected to be generated from future operations and proceeds will
be sufficient to meet our operating needs for the next 12 months. If our cash
flows are less than expected, we may need to raise additional funds sooner to
respond to unforeseen technological or marketing hurdles, satisfy unforeseen
liabilities or take advantage of unanticipated opportunities. While we have no
current agreements or negotiations with respect to any potential acquisitions, a
future transaction could require potentially significant amounts of capital, as
could the integration of our acquisitions of Convergence.com and Silicon Valley
Communications. We may not be able to obtain funds at the time or times needed
on terms acceptable to us, or at all. If we are unable to obtain adequate funds
on acceptable terms, we may not be able to take advantage of market
opportunities, develop new products or otherwise respond to competitive
pressures.
If our sales forecasts are not realized in a given period, or if our operating
results fluctuate in any given quarter, our stock price may fall for that
period.
While we receive periodic forecasts from our customers as to their future
requirements, these forecasts may not accurately reflect future purchase orders
for our products. In addition, the sales cycles of many of our products,
particularly our newer products and products sold internationally, are
typically unpredictable and usually involve:
. a significant technical evaluation by our customers;
. a commitment of capital and other resources by cable operators;
. delays associated with cable operators' internal procedures to approve
large capital expenditures;
7
<PAGE>
. time required to engineer the deployment of new technologies or services
within broadband networks; and
. testing and acceptance of new technologies that affect key operations.
For these and other reasons, our sales cycles generally last three to six
months, but can last up to 12 months.
In addition, because a limited number of large customers account for a
significant portion of our sales, the timing of their orders can cause
significant fluctuation in our quarterly operating results. A portion of our
expenses for any given quarter are typically based on expected sales and if
sales are below expectations in any given quarter, the negative impact on our
operating results may be increased if we are unable to adjust our spending to
compensate for the lower sales. Accordingly, variations in timing of sales can
cause significant fluctuation in our quarterly operating results and may result
in a fall in the price of our common stock.
Our stock price may be volatile and you may not be able to resell your shares
at or above the offering price.
The market price of our common stock has fluctuated in widely in the past and
is likely to fluctuate in the future.
Factors affecting our stock price volatility may include:
. variations in operating results from quarter to quarter;
. changes in earning estimates by analysts;
. market conditions in the industry; and
. general economic conditions.
For example, between August 17, 1999 and August 30, 1999 the price of our
common stock dropped from approximately $33.88 to $21.00 per share. Between
August 30, 1999 and September 23, 1999, the price of our common stock rose from
approximately $21.00 to $33.69 per share. Consequently, the current market
price of our common stock may not be indicative of future market prices, and
you may be unable to resell your shares of our common stock at or above the
offering price.
If our international sales do not meet our expectations, then our growth may be
less than expected.
Sales to customers outside of the United States represented 19% of net sales in
fiscal 1997, 21% of net sales in fiscal 1998 and 11% of sales in fiscal 1999.
We expect that international sales will represent a substantial portion of our
net sales in the
future. Although we plan to invest resources to grow our international sales,
there can be no guarantee that this investment will succeed. Our international
operations are subject to a number of risks, including:
. spending patterns of international cable operators;
. import and export license requirements, tariffs, taxes and other trade
barriers;
. fluctuations in currency exchange rates;
. difficulty in collecting accounts receivable;
. complying with a wide variety of foreign laws, treaties and
telecommunications standards;
. difficulty in staffing and managing foreign operations; and
. political and economic instability.
We may be harmed if we are unable to adequately protect our proprietary rights.
We currently hold 16 issued United States patents and have a number of patent
applications pending. We intend to continue to file patent applications in the
future, where we believe appropriate, and to pursue such applications with
United States and foreign patent authorities, but we cannot be sure that any
other patents will be issued on such applications or that our patents will not
be contested. Also, because issuance of a valid patent does not prevent other
companies from using alternative, non-infringing technology, we cannot be sure
that any of our patents will provide significant commercial protection. In
addition to patent protection, we also rely on trade secrets, technical know-
how, copyright and other unpatented proprietary information relating to our
product development and manufacturing activities. We try to protect this
information with confidentiality agreements with our employees and other
parties. We cannot be sure that these agreements will not be breached, that we
will have adequate remedies for any breach or that our trade secrets and
proprietary know-how will not
8
<PAGE>
otherwise become known or independently discovered by others.
Particular aspects of our technology could be found to infringe on the claims
of other existing or future patents. Other companies may hold or obtain patents
on inventions or may otherwise claim proprietary rights to technology necessary
to our business which could prevent us from developing new products. We cannot
predict the extent to which we may be required to seek licenses, or the extent
to which they will be available to us on acceptable terms, if at all.
We may be harmed if we have problems with Year 2000 issues.
We have assessed the Year 2000 readiness of our computer systems and date
sensitive equipment, which are comprised predominantly of third party software
and hardware. We are currently assessing the Year 2000 risks associated with
Convergence.com and Silicon Valley Communications. We have also contacted our
principal customers, suppliers, vendors and subcontractors to ascertain their
readiness for the Year 2000, and, where we believe necessary, made upgrades to
our systems and equipment.
Based upon our assessments to date, we believe that the products we presently
sell, and those we have installed in customers' networks in the past, are Year
2000 compliant. Undetected errors or defects may remain. If we, or any of our
key suppliers or customers, fail to mitigate internal or external Year 2000
risks, we may be unable to process transactions, manufacture products, send
invoices or engage in similar normal business activities. We may experience
additional costs and a decline in sales for an indefinite period of time, which
could materially and adversely affect our business, financial condition and
results of operations.
9
<PAGE>
FORWARD LOOKING STATEMENTS
This prospectus and the documents we have filed with the Securities and Exchange
Commission which we have referenced under "Where You Can Find More Information"
on page 17 contain forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These
forward looking statements include, among others, statements regarding our
ability to provide complete network solutions, our strategic plan, the demand
for network integrity, the trend toward more fiber in the network, global demand
for our products and services and our ability to integrate Convergence.com and
Silicon Valley Communications. Forward-looking statements represent our
judgement regarding future events. Although we believe we have a reasonable
basis for these forward looking statements, we cannot guarantee their accuracy
and actual results may differ materially from those we anticipated due to a
number of uncertainties, many of which we are not aware. Factors which could
cause actual results to differ from expectations include, among others, capital
spending patterns of the communications industry, our ability to develop new and
enhanced products, if the AT&T field trials with our fiber optic products are
not successful, continued industry consolidation, the development of competing
technology, our ability to carry out our strategic plan and our ability to
assimilate Convergence.com and Silicon Valley Communications. We urge you to
consider the risks and uncertainties discussed under "Risk Factors" and
elsewhere in this prospectus and in the other documents filed with the SEC in
evaluating our forward-looking statements. We have no plans to update our
forward-looking statements to reflect events or circumstances after the date of
this prospectus.
USE OF PROCEEDS
The net proceeds from the sale of the securities will be received by the
selling shareholders. We will not receive any proceeds from the sale of the
securities by the selling shareholders.
SELLING SHAREHOLDERS
The table below sets forth information regarding our common stock which has
been issued or is issuable to the selling shareholders as of September 17, 1999
and the amount of securities to be sold by them under this prospectus. The
securities include shares of common stock which were issued or are issuable upon
the exercise of warrants owned by the selling shareholders, which warrants were
acquired by selling shareholders from Convergence and converted by us into
warrants to acquire our common stock in connection with the Convergence merger.
We have filed with the Commission, under the Securities Act of 1933, as
amended (the "Securities Act"), a registration statement on Form S-3, of which
this prospectus forms a part, with respect to the resale of the securities from
time to time on The Nasdaq National Market or in
10
<PAGE>
privately negotiated transactions and have agreed to keep the registration
statement effective until the securities are no longer required to be registered
for the sale thereof by the selling shareholders.
The table below assumes the exercise of all outstanding warrants owned by
the selling shareholders. The percentages, if any, were calculated based on
shares of common stock outstanding as of September 17, 1999 plus the shares
issued or issuable to the selling shareholders listed in this prospectus and
includes 366,930 shares of common stock which were issued or are issuable upon
the exercise of outstanding warrants owned by the selling shareholders.
David R. Ames and Terry L. Wright, both selling shareholders listed below,
are officers of our company.
<TABLE>
<CAPTION>
Securities Owned Securities Owned
Prior to Offering After Offering
-------------------------------------- -------------------
Shares of Number of
Shares of Common Stock Percent of Shares of Percent of
Name of Selling Shareholder Common Stock Offered Hereby Common Stock Common Stock Common Stock
- --------------------------- ------------ -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Kevin B. Allen............... 5,000 5,000 * 0 *
David R. Ames................ 446,190 446,190 3.5% 0 *
Elizabeth F. Ames............ 4,000 4,000 * 0 *
Margaret A. Ames............. 7,276 7,276 * 0 *
Robert S. Ames............... 12,440 12,440 * 0 *
Frank M. Ayre, III........... 66,930 66,930 * 0 *
BG Investments............... 10,000 10,000 * 0 *
Jeffrey D. Bennis............ 5,000 5,000 * 0 *
Vincent T. Bocchino.......... 2,000 2,000 * 0 *
Joseph V. Bocchino........... 2,000 2,000 * 0 *
John M. Bohunsky............. 2,000 2,000 * 0 *
Robert V. Bolen.............. 5,000 5,000 * 0 *
Kip R. Caffey................ 25,000 25,000 * 0 *
Linda Cassady................ 4,000 4,000 * 0 *
DRL, LLC..................... 10,000 10,000 * 0 *
Drew W. Edwards.............. 1,000 1,000 * 0 *
U. Bertram Ellis, Jr......... 20,000 20,000 * 0 *
Finn Partners................ 100,000 100,000 * 0 *
Robert Frankovich............ 100,000 100,000 * 0 *
S. Taylor Glover............. 40,000 40,000 * 0 *
Reese M. Jones............... 216,846 216,846 1.7% 0 *
James C. Kennedy............. 40,000 40,000 * 0 *
Steve Kirschner.............. 15,000 15,000 * 0 *
Billy Morgan Long and/or
Dixie Norman Long............ 40,157 40,157 * 0 *
Joseph L. Mathias, IV........ 20,000 20,000 * 0 *
Drexel and Gwendolyn
McDaniel................... 2,000 2,000 * 0 *
Realan Capital Corp.......... 100,000 100,000 * 0 *
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Bruce A. Rifkin........... 5,000 5,000 * 0 *
Monroe M. Rifkin.......... 23,000 23,000 * 0 *
Stuart G. Rifkin.......... 5,000 5,000 * 0 *
Arthur W. Rollins......... 5,000 5,000 * 0 *
Bradley Simmons........... 5,000 5,000 * 0 *
Peter N. Smith............ 5,000 5,000 * 0 *
T.A.F., L.P............... 2,224 2,224 * 0 *
Dale D. Wagner............ 2,000 2,000 * 0 *
Terry L. Wright........... 446,190 446,190 3.5% 0 *
</TABLE>
________________________
* Less than one percent.
12
<PAGE>
PLAN OF DISTRIBUTION
The selling shareholders may sell their shares of common stock from time to
time to purchasers directly by any such selling shareholder, or by pledgees,
donees, transferees or other successors in interest receiving shares from a
selling shareholder after the date of this prospectus. As used in this section,
the term "selling shareholder" includes pledgees, donees, transferees or other
successors in interest. Alternatively, the selling shareholders may from time
to time offer the securities offered hereby through underwriters, brokers,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the selling shareholders and/or the
purchasers of the securities for whom they may act as agent (which compensation
as to a particular broker-dealer might exceed that amount normally received by
such broker-dealers).
The selling shareholders and any such underwriters, brokers, dealers or
agents who participate in the distribution of the securities may be
underwriters, and any profits on the sale of the securities by them and any
discounts, commissions or concessions received by any such underwriters,
brokers, dealers or agents might be underwriting discounts and commissions under
the Securities Act. To the extent the selling shareholders may be underwriters,
they may be subject to statutory liabilities and requirements of the Securities
Act, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Because
selling shareholders may be underwriters within the meaning of Section 2(l1) of
the Securities Act, they will be required to deliver a prospectus to their
purchasers.
The securities offered hereby may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices,
including in transactions on The Nasdaq National Market. The securities may be
sold by one or more of the following methods without limitation:
. to underwriters who will acquire securities for their own account and
resell them in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale (any public offering price and any
discounts or concessions may be changed from time to time);
. a block trade in which the broker or dealer so engaged will attempt
to sell the securities as agent but may resell a portion of the block
as principal to facilitate the transaction;
. purchases by a broker or dealer as principal and resale by such broker
or dealer for its own account;
13
<PAGE>
. ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
. an exchange distribution in accordance with the rules of such
exchange;
. face-to-face transactions between sellers and purchasers without a
broker or dealer;
. through the writing of options; and
. other legally available means.
At any time a particular offering of securities is made, a revised
prospectus or prospectus supplement, if required, will be distributed including
the name or names of any underwriters, brokers, dealers or agents, any
discounts, commissions and other items constituting compensation from the
selling shareholders and any discounts, commissions or concessions allowed or
reallowed or paid to dealers. Such revised prospectus or prospectus supplement
and, if necessary, a post-effective amendment to the registration statement of
which this prospectus is a part, will be filed with the Commission to reflect
the disclosure of additional information with respect to the distribution of the
securities. In addition, the securities may be sold in private transactions in
compliance with Rule 144A or under Rule 144 of the Securities Act.
We are bearing all costs relating to the registration of these securities
(other than fees and expenses, if any, of counsel or other advisers to the
selling shareholders). Any commissions, discounts or other fees payable to
broker-dealers in connection with any sale of these securities will be borne by
the selling shareholders selling such securities.
We have agreed to indemnify the selling shareholders in certain
circumstances against certain liabilities, including liabilities that could
arise under the Securities Act.
There is no guarantee that any selling shareholder will sell any or all of
the securities offered in this prospectus or that any such selling shareholder
will not transfer, devise or gift such securities by other means not described
in this prospectus.
Underwriters participating in any offering made of the shares of common
stock offered by this prospectus (as amended or supplemented from time to time)
may receive underwriting discounts and commissions, and discounts or concessions
may be allowed or reallowed or paid to dealers, and brokers or agents
participating in such transaction may receive brokerage or agent's commissions
or fees.
When a selling shareholder tells us that they have arranged with a broker-
dealer for the sale of securities through a block trade, special offering,
exchange distribution or secondary
14
<PAGE>
distribution or a purchase by a broker or dealer, or other material arrangement,
a supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing:
. the name of each such selling shareholder and of the participating
broker-dealer(s);
. the number of securities involved;
. the price at which such securities were sold;
. the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
. that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in the
prospectus; and
. other facts material to the transaction.
The selling shareholders and any other person participating in such
distribution must comply with the Exchange Act and the rules and regulations.
These rules include Regulation M, which may limit the timing of purchases and
sales of any of the securities by the selling shareholders and any other such
person. Furthermore, Regulation M may prohibit persons engaged in the
distribution of the securities from simultaneously engaging in market making
activities with respect to the particular securities for a period of up to five
business days (or such other applicable period as Regulation M may provide)
prior to the commencement of such distribution. All of the foregoing may affect
the marketability of the securities and the ability of any person or entity to
engage in market-making activities with respect to the securities.
In order to comply with the securities laws of certain states, if
applicable, the securities will be sold in such jurisdictions, if required, only
through registered or licensed brokers or dealers.
THE COMPANY
We have been operating in the Electronic Distribution Products business
segment which provides HFC equipment for signal distribution applications,
primarily to the cable television market. We design and manufacture cable
television distribution equipment for two-way hybrid fiber coax networks.
On July 9, 1999, we completed a merger with Convergence pursuant to which
Convergence became a wholly owned subsidiary and now operates as a separate
business unit
15
<PAGE>
called Broadband Management Services which provides Internet enabling technical
services. These services include access to broadband Internet/high speed data
capabilities and a full set of network management products and services. The 24
hour per day, seven days per week Network Operations Center (NOC) and subscriber
help desk, core capabilities of Broadband Management Services, are located in a
facility near Atlanta, Georgia. This facility features a multi-vendor showroom
where potential customers can experience live, real-time demonstrations of high-
speed data and Internet-over-cable access.
On September 17, 1999, we completed a merger with Silicon Valley
Communications, a leading edge technology company and key supplier of high
quality, comprehensive fiber optic transmission systems used in advanced HFC
networks. Pursuant to the terms of the merger Silicon Valley Communications
became our wholly owned subsidiary.
Our headquarters are in State College, Pennsylvania, and our manufacturing
facilities are in State College and Tipton, Pennsylvania, and Tijuana, Mexico.
We also maintain administrative offices in Santa Clara, California; Toronto,
Canada; Almere, The Netherlands; and Hong Kong. As a result of the acquisition
of Convergence, we maintain a network operations center and an administrative
office near Atlanta, Georgia.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon for us by Ballard Spahr Andrews & Ingersoll, LLP, Philadelphia,
Pennsylvania.
EXPERTS
The consolidated financial statements of the Registrant and subsidiaries
and schedules as of June 25, 1999 and June 26, 1998, and for each of the years
in the three-year period ended June 25, 1999, have been incorporated by
reference herein and in the registration statement in reliance upon the reports
of KPMG LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by us (File No.
0-10726) with the Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K, as amended by Form 10-K/A, for the
fiscal year ended June 25, 1999.
(b) Reports on Form 8-K filed on July 15, 1999, July 26, 1999,
August 2, 1999, August 30, 1999 and September 24, 1999.
16
<PAGE>
(c) The description of our common stock contained in our registration
statement on Form 8-A filed with the Commission under the
Exchange Act on October 27, 1982, as amended by the Form 8 filed
with the Commission on July 3, 1990.
(d) The description of our shareholder rights plan contained in our
registration statement on Form 8-A filed with the Commission
under the Exchange Act on August 30, 1999.
All reports and other documents subsequently filed by us pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference into this
prospectus and to be a part hereof from the date of the filing of such reports
or documents. Any statement contained in a document, all or a portion of which
is incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained or incorporated by herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
Upon written or oral request, we will provide without charge to each person,
including any beneficial owner, to whom this prospectus is delivered a copy of
any or all of such documents which are incorporated herein by reference (other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the documents that this prospectus incorporates).
Written or oral requests for copies should be directed to William T. Hanelly,
Vice President - Finance, Secretary and Treasurer, 60 Decibel Road, State
College, PA 16801, (814) 238-2461.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus, which constitutes a part of a registration statement on
Form S-3 filed by us with the Commission under the Securities Act, omits certain
of the information set forth in the registration statement. Reference is hereby
made to the registration statement and to the exhibits thereto for further
information with respect to us and the securities offered hereby. Copies of the
registration statement and the exhibits thereto are on file at the offices of
the Commission and may be obtained upon payment of the prescribed fee or may be
examined without charge at the public reference facilities of the Commission
described below or via the Commission's web site described below.
17
<PAGE>
Statements contained herein concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
We are subject to the informational requirements of the Exchange Act, and,
accordingly, file reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C.
20549, and at the Commission's Regional Offices located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
documents may also be obtained from the Public Reference Room of the Commission
at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed
rates. Information regarding the operation the Public Reference Room may be
obtained by calling the Commission at 1-800-SEC-0330. The Commission maintains a
web site (http://www.sec.gov) that contains material regarding issuers that file
electronically with the Commission.
18
<PAGE>
================================================================================
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must
not rely on any unauthorized information. If anyone provides you with different
or inconsistent information, you should not rely on it. This prospectus does
not offer to sell any shares in any jurisdiction where it is unlawful. The
information in this prospectus is current as of the date shown on the cover
page.
C-COR.net Corp.
1,800,253 Shares of
Common Stock
_______________
PROSPECTUS
_______________
, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated costs and expenses of the sale
and distribution of the securities being registered, all of which are being
borne by us.
Securities and Exchange Commission filing fee......... $14,013.17
Printing expenses..................................... $ 2,500.00
Legal, accounting and other professional services..... $20,000.00
Miscellaneous......................................... $ 500.00
----------
Total................................................. $37,013.17
==========
All of the amounts shown are estimates except for the fee payable to the
Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 1741 through 1750 of the Pennsylvania Business Corporation Law of
1988 permits, and in some cases requires, the indemnification of officers,
directors and employees of the Registrant. Article VII-Section 7-1 of the
Registrant's bylaws provides that the Registrant shall indemnify any director or
officer of the Registrant against expenses (including legal fees), judgments,
fines and amounts paid in settlement, actually and reasonably incurred by him or
her, to the fullest extent now or hereafter permitted by law in connection with
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, brought or threatened to be brought
against him, including actions or suits by or in the right of the Registrant, by
reason of the fact that he or she is or was a director or officer of the
Registrant, its parent or any of its subsidiaries, or acted as a director or
officer or in any other capacity on behalf of the Registrant, its parent or any
of its subsidiaries or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise.
The board of directors by resolution may similarly indemnify any person
other than a director or officer of the Registrant to the fullest extent now or
hereafter permitted by law for liabilities incurred by him in connection with
services rendered by him for or at the request of the Registrant, its parent or
any of its subsidiaries.
II-1
<PAGE>
ITEM 16. EXHIBITS
The following is a list of exhibits filed as part of this registration
statement.
Exhibit
Number Description and Method of Filing
------ --------------------------------
2.1 Agreement and Plan of Merger dated as of May 15, 1999 among
the Registrant, C-COR Acquisition Corp. and Convergence.com
Corporation (incorporated by reference to the Registrant's
report on Form 8-K dated July 9, 1999 and filed on August 2,
1999, File No. 0-10726).
2.2 Agreement and Plan of Merger dated as of July 13, 1999 among
the Registrant, C-COR-net Acquisition Corp. and Silicon
Valley Communications, Inc. (incorporated by reference to
the Registrant's report on Form 10-K for the fiscal year
ended June 25, 1999, File No. 0-10726).
4.1 Specimen copy of common stock certificate (incorporated by
reference to the Registrant's Registration Statement on Form
S-8, File No. 2-95959).
4.2 Form of Common Stock Purchase Warrant.
4.3 Form of Letter Amendment to Common Stock Purchase Warrant.
4.4 Rights Agreement dated August 17, 1999 between the
Registrant and American Stock Transfer & Trust Company
(incorporated by reference to the Registrant's registration
statement on Form 8-A filed August 30, 1999, File No.
0-10726).
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
23.1 Consent of KPMG LLP (State College, PA).
23.2 Consent of KPMG LLP (Atlanta, GA).
23.3 Consent of KPMG LLP (Mountain View, CA).
23.4 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included
in Exhibit 5).
24 Power of Attorney (included in signature page previously
filed).
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
A. Rule 415 Offering
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sale; are being
made, a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(b) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(c) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (1)(a) and (1)(b) above do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be, included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Filings Incorporating Subsequent Exchange Act Documents by Reference
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
C. Request for Acceleration of Effective Date
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
registration statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of State College,
Commonwealth of Pennsylvania, on September 24, 1999.
C-COR.net CORP.
By: /s/ William T. Hanelly
----------------------------------
William T. Hanelly
Vice President-Finance,
Security and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to registration statement on Form S-3 has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C>
* President and Chief Executive September 24, 1999
- --------------------------------
David A. Woodle Officer and Director (Principal
Executive Officer)
/s/ William T. Hanelly Vice President - Finance, September 24, 1999
- --------------------------------
William T. Hanelly Secretary Treasurer (Principal
Financial Officer)
* Controller (Principal Accounting September 24, 1999
- --------------------------------
Joseph Zavacky Officer)
* Director and Chairman September 24, 1999
- --------------------------------
Richard E. Perry
* Director September 24, 1999
- --------------------------------
Donald M. Cook, Jr.
* Director September 24, 1999
- --------------------------------
I. N. Rendall Harper, Jr.
* Director September 24, 1999
- --------------------------------
Anne P. Jones
* Director September 24, 1999
- --------------------------------
John J. Omlor
* Director September 24, 1999
- --------------------------------
Frank Rusinko, Jr.
</TABLE>
II-5
<PAGE>
* Director September 24, 1999
- --------------------------------
James J. Tietjen
*By: /s/ William T. Hanelly September 24, 1999
---------------------------------
William T. Hanelly pursuant
to a power of attorney
previously filed.
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description and Method of Filing
------ --------------------------------
2.1 Agreement and Plan of Merger dated as of May 15, 1999 among
the Registrant, C-COR Acquisition Corp. and Convergence.com
Corporation (incorporated by reference to the Registrant's
report on Form 8-K dated July 9 and filed on August 2, 1999,
File No. 0-10726).
2.2 Agreement and Plan of Merger dated as of July 13, 1999 among
the Registrant, C-COR.net Acquisition Corp. and Silicon
Valley Communications, Inc. (incorporated by reference to
the Registrant's report on Form 10-K for the fiscal year
ended June 25, 1999, File No. 0-10726).
4.1 Specimen copy of common stock certificate (incorporated by
reference to the Registrant's Registration Statement on Form
S-8, File No. 2-95959).
4.2 Form of Common Stock Purchase Warrant.
4.3 Form of Letter Amendment to Common Stock Purchase Warrant.
4.4 Rights Agreement dated August 17, 1999 between the
Registrant and American Stock Transfer & Trust Company
(incorporated by reference to the Registrant's registration
statement on Form 8-A filed August 30, 1999, File No.
0-10726).
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
23.1 Consent of KPMG LLP (State College, PA).
23.2 Consent of KPMG LLP (Atlanta, GA).
23.3 Consent of KPMG LLP (Mountain View, CA).
23.4 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included
in Exhibit 5).
24 Power of Attorney (included in signature page previously
filed).
II-7
<PAGE>
Exhibit 4.2
STOCK PURCHASE WARRANT
THIS STOCK PURCHASE WARRANT (hereinafter referred to as the "Warrant") is
made and entered into as of __________________, 1998 (the "Issuance Date"), by
and between CONVERGENCE SYSTEMS, INC., a Georgia corporation (the
"Corporation"), and ____________________ (the "Warrantholder").
W I T N E S S E T H:
WHEREAS, the Board has granted to the Warrantholder warrants to purchase
shares of the Corporation's no par value common stock (the "Common Stock"), upon
the terms and conditions herein contained;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, and of other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Warrant. Subject to the terms and conditions of this
Warrant, the Corporation hereby grants to the Warrantholder the right to
purchase _________ shares of Common Stock (the "Warrant Shares").
2. Exercise Price. The purchase price (the "Exercise Price") for each
Warrant Share shall be $10.00.
3. Exercise of Warrant.
(a) To the extent that the Warrant has become and remains exercisable
it may be exercised by the Warrantholder delivering to the Corporation a written
notice of exercise signed by the Warrantholder, in substantially the form
attached hereto as Exhibit A (a "Notice of Exercise"), together with a check
payable to the Corporation in the amount of the total purchase price for the
Warrant Shares to be purchased pursuant to the Notice of Exercise.
(b) The Warrant shall become exercisable with respect to all of the
Warrant Shares only upon the earlier to occur of the following: (i) the second
anniversary of the Issuance Date; or (ii) the effectiveness of the registration
under the Securities Act of 1933, as amended (the "Act") of the issuance of the
Warrant Shares to the Warrantholder in a "Qualified IPO." The term "Qualified
IPO" shall mean an offering of securities of the Company that is registered
under
<PAGE>
the Act and that yields gross proceeds to the Company of at least $7,500,000.
This Warrant will expire seven years from the Issuance Date.
(c) The Warrantholder may not exercise the Warrant for less than the
full number of Warrant Shares.
(d) The Corporation shall have the right to demand that the
Warrantholder exercise this Warrant in whole upon the closing of a Qualified IPO
in which this Warrant becomes exercisable pursuant to Section 3(b) above by
delivering to the Warrantholder a written request to such effect at least 15
days prior to the closing of such Qualified IPO (a "Demand Notice"). If the
Warrantholder does not exercise the Warrant to the extent demanded in the Demand
Notice prior to the closing of such Qualified IPO, the Warrant shall be canceled
upon the closing of such Qualified IPO.
(e) Within thirty (30) days after the exercise of the Warrant as
herein provided, the Corporation shall deliver to the Warrantholder a
certificate or certificates for the Warrant Shares being issued in the name of
the Warrantholder and in such denominations as are requested by the
Warrantholder.
(f) The Corporation covenants and agrees that all Warrant Shares which
may be issued upon exercise of the Warrant shall, upon issuance and payment
therefor, be legally and validly issued and outstanding, fully paid and
nonassessable, and free from all liens, claims and encumbrances, except
restrictions imposed by applicable securities laws, the Corporation's Articles
of Incorporation and/or this Warrant. The Corporation shall at all times
reserve and keep available for issuance upon the exercise of the Warrant such
number of authorized but unissued shares of Common Stock as will be sufficient
to permit the exercise in full of the Warrant.
4. Term of Warrant.
(a) The term of the Warrant shall continue in effect until the first
to occur of the following: (i) the date on which the Warrant has been fully
exercised and/or canceled pursuant to Section 3(c) hereof, with respect to all
of the Warrant Shares; or (ii) the closing of a Qualified IPO or (iii) seven
years from the Issuance Date.
(b) In the event of the Warrantholder's death, the Warrant may be
exercised hereunder by the Warrantholder's personal representative, legatees, or
heirs at law, as the case may be, and in the case of the Warrantholder's mental
incompetence, by his legal guardian, or if none has been appointed, by his duly
authorized attorney-in-fact.
5. Consent to Transfer. This Warrant, the Warrant and all rights
hereunder are nontransferable and nonassignable by the Warrantholder, other than
by the last will and testament of the Warrantholder or the laws of descent and
distribution, unless the Corporation
<PAGE>
consents thereto in writing. Any transfer or attempted transfer except pursuant
to the preceding sentence shall be null and void and of no effect whatsoever.
6. Adjustments.
(a) If, prior to the termination of the Warrant as provided in Section
4(a) hereof:
(i) The number of outstanding shares of Common Stock is increased
by a stock split, stock dividend, or other similar event, the Exercise
Price shall be proportionately reduced and the number of Warrant Shares
that have not theretofore been purchased by the Warrantholder shall be
proportionately increased.
(ii) The number of outstanding shares of Common Stock is
decreased by a combination or reclassification of shares, or other similar
event, the Exercise Price shall be proportionately increased and the number
of Warrant Shares that have not theretofore been purchased by the
Warrantholder shall be proportionately reduced.
If any adjustment under this Section 6(a) would create a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded and the number of Warrant Shares subject
to the Warrant shall be the next higher number of shares.
(b) If, prior to the termination of the Warrant as provided in Section
4(a) hereof, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock shall be changed into the same or a different number of
shares of the same or another class or classes of stock or securities of the
Corporation or another entity, then the Warrantholder shall thereafter have the
right to purchase and receive upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the Warrant Shares immediately
theretofore purchasable and receivable upon the exercise of the Warrant, such
shares of stock and/or securities as may be issued or payable with respect to or
in exchange for the number of Warrant Shares immediately theretofore purchasable
and receivable upon the exercise of the Warrant had such merger, consolidation,
exchange of shares, recapitalization or reorganization not taken place, and in
any such case appropriate provisions shall be made with respect to the rights
and interests of the Warrantholder to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Exercise Price
and of the number of shares purchasable upon the exercise of the Warrant) shall
thereafter be applicable, as nearly as may be practicable in relation to any
shares of stock or securities thereafter deliverable upon the exercise hereof.
The Corporation shall not effect any transaction described in this subsection
(b) unless the resulting successor or acquiring entity (if not the Corporation)
assumes by written instrument the obligation to deliver to the Warrantholder
such shares of stock and/or securities as, in accordance with the foregoing
provisions, the Warrantholder may be entitled to purchase. The foregoing
notwithstanding, in the event of a merger or consolidation in which the
Corporation is not the surviving entity, if the
<PAGE>
Corporation concludes that it will be unable to satisfy the conditions of this
subsection (b) without a material adverse effect on the terms of such proposed
transaction, then the Corporation shall have the option, prior to or
contemporaneously with the closing of such merger or consolidation, to purchase
the Warrant from the Warrantholder at its then fair value, determined with
regard to both the spread between the Exercise Price and the value of the
consideration to be received in the transaction and the remaining term of the
Warrant. The Corporation and the Warrantholder shall agree on such fair value
or, in the event they are unable to agree, shall submit the question of fair
value to an investment banking firm to be selected by the Corporation, with the
cost of such investment banking firm to be paid by the Corporation.
7. Investment Representation. As a condition to the issuance of Warrant
Shares hereunder, the Warrantholder shall represent to the Corporation that the
Warrant Shares he will acquire pursuant to such exercise are being purchased for
his own account for investment purposes only and not with a present view to
resale or a distribution thereof, unless the Warrantholder delivers to the
Corporation an opinion of counsel acceptable to the Corporation stating that
such a representation is not required under the Act or any state securities
laws. The Warrantholder acknowledges that the Warrant Shares may be "restricted
securities" as defined in the Act and that such Warrant Shares may not be able
to be resold unless such resale is registered under the Act and applicable state
securities laws or unless an exemption is available. The Warrantholder
acknowledges that he has only the rights to cause the registration of the
Warrant Shares as are set forth in that certain Registration Rights Agreement
between the Warrantholder and the Company of even date herewith and that no
additional registration rights are granted hereby.
8. No Rights as a Shareholder. The Warrantholder shall not have any
interest in or shareholder rights with respect to any shares of Common Stock
which are subject to the Warrant until such shares have been issued and
delivered to the Warrantholder in accordance with this Warrant.
9. Taxes. As a condition to the issuance of Warrant Shares hereunder,
the Corporation may withhold, or require the Warrantholder to pay or reimburse
the Corporation for, any taxes which the Corporation determines are required to
be withheld under federal, state or local law in connection with the exercise of
the Warrant.
10. Heirs and Successors. This Warrant and all terms and conditions
hereof shall be binding upon the Corporation and its successors and assigns, and
upon the Warrantholder and his heirs, legatees and legal representatives.
11. Governing Law. This Warrant shall be governed by, and construed and
enforced in accordance with, the laws of the State of Georgia without regard to
the principles of conflicts of laws.
12. Notices. All notices, requests and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given and received when
<PAGE>
delivered in person, when delivered by overnight delivery service, or three (3)
business days after being mailed by registered or certified mail, postage
prepaid, return receipt requested, to the following addresses (or to such other
address as one party may from time to time designate in writing to the other
party hereto):
If to the Corporation: Convergence Systems, Inc.
3800 Holcomb Bridge Road, N.W.
Suite 204
Norcross, GA 30092-2230
Attn: President
If to the Warrantholder: _____________________________
_____________________________
_____________________________
13. Entire Agreement. This Agreement and the related Investor Rights
Agreement, Subscription Agreements, investor questionnaires and Amended and
Restated Articles of Incorporation of the Company in the form filed with the
Georgia Secretary of State (collectively, the "Related Documents") constitute
the full and entire agreement and understanding of the parties to this Agreement
with respect to the subjects hereof and thereof, supersede all previous
discussions and agreements, if any, of the parties hereto with respect to the
subject matter of this Agreement and the Related Agreements (including, but not
limited to, all matters set forth in term sheets or business plans of the
Company) and no party shall be liable for or bound in any other manner by any
representations, warranties, covenants or agreements except as specifically set
forth in this Agreement and the Related Documents.
14. Severability. The provisions of this Warrant, and of each separate
section and subsection, are severable, and if any one or more provisions may be
determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions, and any unenforceable provision to the extent enforceable,
shall nevertheless be binding and enforceable.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed
by its duly authorized officer, and the Warrantholder has executed this Warrant,
as of the Issuance Date.
CONVERGENCE SYSTEMS, INC.
By: ________________________________
David R. Ames
President
WARRANTHOLDER:
By: ________________________________
Name (Print):________________________
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
[DATE]
Convergence Systems, Inc.
3800 Holcomb Bridge Road N.W.
Suite 204
Norcross, Georgia 30092-2230
Attn: President
Re: Exercise of Stock Purchase Warrant
----------------------------------
Dear Sir:
The undersigned, _____________________, pursuant to that certain Stock
Purchase Warrant, dated as of ___________________, 1998, by and between
Convergence Systems, Inc. and the undersigned (the "Warrant"), hereby exercises
the Warrant for the following number of Warrant Shares, subject to the terms and
conditions of the Warrant:
Number of Warrant Shares Being Purchased __________________________
Total Purchase Price and Amount Remitted __________________________
Very truly yours,
_____________________________________
[Name]
<PAGE>
Exhibit 4.3
September 8, 1999
To: Former Warrantholders of Convergence.com Corporation
Re: Assumption of Warrants to Purchase Common Stock of Convergence.com
------------------------------------------------------------------
Dear Sir or Madam:
At a meeting on June 17, 1999, the shareholders of Convergence.com
approved an Agreement and Plan of Merger dated May 15, 1999 (the "Agreement")
between C-COR Electronics, Inc. ("C-COR"), C-COR Acquisition Corp., a wholly
owned subsidiary of C-COR ("Acquisition Sub") and Convergence.com Corporation
("Convergence"). Pursuant to the Agreement, Convergence became a wholly owned
subsidiary of C-COR upon the closing of the merger of Acquisition Sub with and
into Convergence on July 9, 1999. On July 9, 1999, C-COR changed its corporate
name to "C-COR.net Corp."
Pursuant to the terms of the Agreement, C-COR has assumed each
unexpired warrant that you hold to purchase common stock of Convergence (each, a
"Convergence Warrant") and each Convergence Warrant has automatically and
without any action on your part been converted into a warrant to purchase an
equal number of shares of common stock of C-COR (each, a "C-COR Warrant").
The exercise price per share of common stock of C-COR under each C-COR Warrant
shall equal the per share exercise price of each Convergence Warrant so assumed
and converted, subject to equitable adjustment for stock splits, stock dividends
and other similar transactions. The C-COR Warrants will also have the same
terms and conditions as the Convergence Warrants so assumed and converted except
that:
1. Each reference to "Convergence Systems, Inc.", "Convergence.com
Corporation" and/or "the Corporation" shall be deemed to refer to C-COR.net
Corp.;
2. The phrase "and/or cancelled" shall be moved from the second line
of Section 4(a) to immediately following the phrase "Section 3(c) hereof" in the
second line of Section 4(a);
3. The phrase "the Warrant" in the first line of Section 5 of shall
be deleted in its entirety;
<PAGE>
4. The last sentence of Section 7 shall be deleted in its entirety;
5. The address for the Corporation in Section 12 shall be restated
in its entirety to read as follows:
If to the Corporation: C-COR.net Corp.
60 Decibel Road
State College, PA 16801
6. Section 13 shall be amended and restated in its entirety to read
as follows:
"13. Entire Agreement. This Warrant and the Letter Agreement dated
July 30, 1999 (the "Letter Agreement") constitute the full and entire agreement
and understanding of the parties to this Warrant with respect to the subjects
hereof and thereof, supersede all previous discussions and agreements, if any,
of the parties hereto and with respect to the subject matter of this Warrant and
the Letter Agreement (including, but not limited to, all matters set forth in
term sheets or business plans of the Corporation) and no party shall be liable
for or bound in any other manner in any representations, warranties, covenants
or agreements except as specifically set forth in this Warrant and the Letter
Agreement."
7. Exhibit A shall be amended and restated in its entirety to read
as Exhibit A attached to this letter.
Please indicate your acceptance and acknowledgment of the terms of
this letter by signing below and returning a copy to C-COR the address indicated
above.
Very truly yours,
C-COR.net Corp.
By:___________________________
Name: William T. Hanelly
Title: Vice President, Finance
<PAGE>
Agreed to and acknowledged by:
If an individual: If not an individual:
Name of Warrantholder: Name of Warrantholder:
______________________________ ______________________________
______________________________ By:___________________________
Signature Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
C-COR.net Corp.
60 Decibel Road
State College, PA 16801
Attn: President
Re: Exercise of Stock Purchase Warrants
-----------------------------------
Dear Sir:
The undersigned, ______________________, pursuant to that certain
Stock Purchase Warrant, dated as of _________________, as amended by the letter
dated July 30, 1999, by and between C-COR.net Corp. and the undersigned (the
"Warrant"), hereby exercises the Warrant for the following number of Warrant
Shares, subject to the terms and conditions of the Warrant":
Number of Warrant Shares Being Purchased____________________________
Total Purchase Price and Amount Remitted_____________________________
(Cashier's check enclosed)
Very truly yours,
_______________________________________
[Name]
<PAGE>
Exhibit 5
September 24, 1999
C-COR.net Corp.
60 Decibel Road
State College, PA 16801
Re: C-COR.net Corp. Amendment No. 1 to Registration Statement
on Form S-3 (File No. 333-82697)
Gentlemen:
We have acted as special counsel to C-COR.net Corp. (the "Company") in
connection with the registration under the Securities Act of 1933, as amended,
of 1,800,253 shares of common stock of the Company, par value $.10 per share
(the "Shares"), proposed to be sold by certain selling shareholders named in the
Registration Statement on Form S-3 (the "Registration Statement").
In rendering our opinion, we have reviewed and relied upon such
certificates, documents, corporate records, other instruments and
representations of officers of the Company as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. In giving this
opinion, we are assuming the authenticity of all instruments presented to us as
originals, the conformity with the originals of all instruments presented to us
as copies and the genuineness of all signatures.
Based upon the foregoing, we are of the opinion that the Shares to be sold
by the selling shareholders have been duly authorized and, when duly executed,
delivered, issued and paid for, will be legally issued, fully paid and
nonassessable.
<PAGE>
C-COR.net Corp.
September 24, 1999
Page 2
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement with respect to the offering of the Shares and the
reference to the firm in the section of the Registration Statement entitled
"Legal Matters."
This opinion is limited to the matters expressly stated herein. No implied
opinion may be inferred to extend this opinion beyond the matters expressly
stated herein. We do not undertake to advise you or anyone else of any changes
in the opinion expressed herein resulting from changes in law, changes in facts
or any other matters that hereafter might occur or be brought to our attention.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors and Stockholders
C-COR.net Corp:
We consent to incorporation by reference in the registration statements (Nos. 2-
95959, 33-27440, 33-35208, 33-66590, 333-02505, 333-65805) on Form S-8 and (No.
333-82697) on Form S-3 of C-COR.net Corp. of our reports dated August 16, 1999,
relating to the consolidated balance sheets of C-COR.net Corp. as of June 25,
1999 and June 26, 1998, and the related consolidated statements of operations,
cash flows and shareholders' equity for each of the years in the three-year
period ended June 25, 1999, and related schedule, which reports appear in the
June 25, 1999 annual report on Form 10-K of C-COR.net Corp. incorporated by
reference herein, and our report dated September 20, 1999, relating to the
supplemental consolidated financial statements of C-COR.net Corp., which give
retroactive effect to the mergers of C-COR.net Corp. and Convergence.com, which
occurred on July 9, 1999, and Silicon Valley Communications, Inc., which
occurred on September 17, 1999, incorporated by reference herein from C-COR.net
Corp.'s Form 8-K filing dated September 17, 1999.
We also consent to the reference to our firm under the heading "Experts" in the
prospectus.
KPMG LLP
State College, Pennsylvania
September 24, 1999
<PAGE>
Exhibit 23.2
The Board of Directors
Convergence.com Corporation:
We consent to the use of our report incorporated herein by reference.
KPMG LLP
Atlanta, Georgia
September 24, 1999
<PAGE>
Exhibit 23.3
Consent of Independent Auditors
The Board of Directors and Stockholders
C-COR.net Corp. and Subsidiaries:
We consent to incorporation herein by reference in the registration statements
(Nos. 2-95959, 33-27440, 33-35208, 33-66590, 333-65805, and 333-02505) on Form
S-8 and (No. 333-82697) on Form S-3 of C-COR.net Corp. of our report dated July
30, 1999, except as to Note 2, which is as of August 4, 1999, with respect to
the balance sheets of Silicon Valley Communications, Inc. (formerly Qualop
Systems Corporation) as of June 25, 1999 and June 30, 1998, and the related
statements of operations, shareholders' (deficit) equity, and cash flows for the
years then ended, which report appears in the Form 8-K of C-COR.net Corp. dated
September 24, 1999.
KPMG LLP
Mountain View, California
September 23, 1999
