<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 10)*
AXCESS INC.
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(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $.01 PER SHARE
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(TITLE OF CLASS OF SECURITIES)
054546 10 6
---------------------------------
(CUSIP NUMBER)
RICHARD C. E. MORGAN
AMPHION CAPITAL MANAGEMENT L.L.C.
590 MADISON AVENUE
NEW YORK, NY 10022
(212) 849-8120
---------------------------------
(NAME, ADDRESS AND TELEPHONE OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
DECEMBER 31, 1998
-----------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO REPORT
THE ACQUISITION WHICH IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING THIS
SCHEDULE BECAUSE OF RULE 13d-1(b)(3) OR (4), CHECK THE FOLLOWING BOX [ ].
NOTE: SIX COPIES OF THIS STATEMENT, INCLUDING ALL EXHIBITS, SHOULD BE FILED WITH
THE COMMISSION. SEE RULE 13d-1(a) FOR OTHER PARTIES TO WHOM COPIES ARE TO BE
SENT.
*THE REMAINDER OF THIS COVER PAGE SHALL BE FILLED OUT FOR A REPORTING PERSON'S
INITIAL FILING ON THIS FORM WITH RESPECT TO THE SUBJECT CLASS OF SECURITIES, AND
FOR ANY SUBSEQUENT AMENDMENT CONTAINING INFORMATION WHICH WOULD ALTER
DISCLOSURES PROVIDED IN A PRIOR COVER PAGE.
THE INFORMATION REQUIRED ON THE REMAINDER OF THIS COVER PAGE SHALL NOT BE DEEMED
TO BE "FILED" FOR THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF
1934 ("ACT") OR OTHERWISE SUBJECT TO THE LIABILITIES OF THAT SECTION OF THE ACT
BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT (HOWEVER, SEE THE
NOTES).
<PAGE> 2
SCHEDULE 13D
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Cusip No. 054546 10 6 Page 2 of 13 Pages
- --------------------------------------------------------------------------------
1. Name of Reporting Person
SS or I.R.S. Identification No. of Above Person:
Amphion Ventures L.P.
13-3962697
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2. Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
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3. SEC Use Only.
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4. Source of Funds BK, AF, OO
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5. Check box if disclosure of legal proceedings is required pursuant to Items
2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization Delaware
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Number of 7. Sole Voting Power N/A
Shares
--------------------------------------------------------------
Beneficially 8. Shared Voting Power 2,023,153 (See Item 5)
Owned by
--------------------------------------------------------------
Each 9. Sole Dispositive Power N/A
Reporting
--------------------------------------------------------------
Person 10. Shared Dispositive Power 2,023,153 (See Item 5)
With
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11. Aggregate amount beneficially owned by each
reporting person 2,023,153 (See Item 5)
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12. Check box if the aggregate amount in row (11)
excludes certain shares [ ]
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13. Percent of class represented by amount in row (11) 41.8% (See Item 5)
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14. Type of Reporting Person PN
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<PAGE> 3
SCHEDULE 13D
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Cusip No. 054546 10 6 Page 3 of 13 Pages
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1. Name of Reporting Person
SS or I.R.S. Identification No. of Above Person:
Amphion Partners L.L.C.
13-3962696
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2. Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
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3. SEC Use Only.
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4. Source of Funds AF
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5. Check box if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization Delaware
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Number of 7. Sole Voting Power 28,125 (See Item 5)
Shares
--------------------------------------------------------------
Beneficially 8. Shared Voting Power 2,023,153 (See Item 5)
Owned by
--------------------------------------------------------------
Each 9. Sole Dispositive Power 28,125 (See Item 5)
Reporting
--------------------------------------------------------------
Person 10. Shared Dispositive Power 2,023,153 (See Item 5)
With
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11. Aggregate amount beneficially owned by each
reporting person 2,051,278 (See Item 5)
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12. Check box if the aggregate amount in row (11)
excludes certain shares [ ]
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13. Percent of class represented by amount in row (11) 42.1% (See Item 5)
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14. Type of Reporting Person OO
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<PAGE> 4
SCHEDULE 13D
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Cusip No. 054546 10 6 Page 4 of 13 Pages
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1. Name of Reporting Person
SS or I.R.S. Identification No. of Above Person:
Antiope Partners L.L.C.
13-3260056
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2. Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
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3. SEC Use Only.
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4. Source of Funds OO
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5. Check box if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization Delaware
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Number of 7. Sole Voting Power 262,034 (See Item 5)
Shares
--------------------------------------------------------------
Beneficially 8. Shared Voting Power N/A
Owned by
--------------------------------------------------------------
Each 9. Sole Dispositive Power 262,034 (See Item 5)
Reporting
--------------------------------------------------------------
Person 10. Shared Dispositive Power N/A
With
--------------------------------------------------------------
11. Aggregate amount beneficially owned by each
reporting person 262,034 (See Item 5)
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12. Check box if the aggregate amount in row (11)
excludes certain shares [ ]
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13. Percent of class represented by amount in row (11) 7.8% (See Item 5)
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14. Type of Reporting Person OO
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<PAGE> 5
SCHEDULE 13D
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Cusip No. 054546 10 6 Page 5 of 13 Pages
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1. Name of Reporting Person
SS or I.R.S. Identification No. of Above Person:
Amphion Investments L.L.C.
13-4030159
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2. Check the appropriate box if a member of a group (a) [ ]
(b) [ ]
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3. SEC Use Only.
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4. Source of Funds OO
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5. Check box if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e) [ ]
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6. Citizenship or Place of Organization Delaware
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Number of 7. Sole Voting Power 10,000 (See Item 5)
Shares
--------------------------------------------------------------
Beneficially 8. Shared Voting Power N/A
Owned by
--------------------------------------------------------------
Each 9. Sole Dispositive Power 10,000 (See Item 5)
Reporting
--------------------------------------------------------------
Person 10. Shared Dispositive Power N/A
With
--------------------------------------------------------------
11. Aggregate amount beneficially owned by each
reporting person 10,000 (See Item 5)
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12. Check box if the aggregate amount in row (11)
excludes certain shares [ ]
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13. Percent of class represented by amount in row (11) 0.3% (See Item 5)
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14. Type of Reporting Person OO
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<PAGE> 6
Page 6 of 13 Pages
This Amendment No. 10 to the Statement on Schedule 13D dated October 4, 1985
(the "Schedule 13D") previously filed by Antiope Ventures L.P. f/k/a Wolfensohn
Associates L.P. and Antiope Partners L.L.C. f/k/a Wolfensohn Partners L.P.
("Antiope Partners"), is filed by Antiope Partners, Amphion Ventures L.P.
("Amphion Ventures"), Amphion Partners L.L.C. ("Amphion Partners") and Amphion
Investments L.L.C. ("Amphion Investments"), and concerns the common stock, $0.01
par value per share (the "Voting Common Stock"), of AXCESS Inc., a Delaware
corporation, which has its principal executive offices at 3208 Commander Drive,
Dallas, Texas 75006 (the "Company"). This Amendment No. 10 amends Items 3, 4, 5,
6 and 7 of Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION
Acquisition of Preferred Stock
Since the filing of Amendment No. 9 to this Statement on Schedule 13D in May
1998, Amphion Ventures acquired 390 shares of Series H Non-Voting Convertible
Preferred Stock (the "Series H Preferred Stock") for a total purchase price of
$3,900,000, which represented the balance of the commitment of Amphion Ventures
to purchase up to $5,500,000 of the Company's Series G Voting Convertible
Preferred Stock (the "Series G Preferred Stock") or the Series H Preferred
Stock. The consideration was in the form of a note payable to the Company for
the full amount of the purchase price. The form of the note payable is attached
to this Schedule 13D as Exhibit 99.33 and is incorporated herein by reference.
As of the date of this Schedule 13D, the note payable has been paid in full by
Amphion Ventures.
During 1998, the Company received an additional commitment from Amphion Ventures
to purchase up to $6,300,000 of the Company's convertible Preferred Stock (the
"Amphion Commitment"). In connection with the Amphion Commitment, Amphion
Ventures received common stock warrants to purchase 264,998 shares of Voting
Common Stock at an exercise price of $2.50 per share. Amphion Ventures acquired
512 shares of Series H Preferred Stock at a purchase price of $10,000 per share,
totaling $5,120,000. The consideration was in the form of a note payable to the
Company for the full amount of the purchase price. The form of note payable is
attached to this Schedule 13D as Exhibit 99.33 and is incorporated herein by
reference. As of the date of this Schedule 13D, the note payable has been paid
in full by Amphion Ventures.
Exchange of Preferred Stock
On October 15, 1998, Amphion Ventures exchanged 500 shares of Series G Preferred
Stock for 500 shares of Series H Preferred Stock such that Amphion Ventures and
its affiliates would not be deemed the beneficial owner of more than fifty
percent (50%) of the Company's voting Common Stock. As of October 15, 1998,
Amphion Ventures was the holder of 405 shares of Series G Preferred Stock and
1,402 shares of Series H Preferred Stock.
Exercise of Preferred Stock Reset Right
In connection with the issuance of Series G Preferred Stock and Series H
Preferred Stock during 1997 and 1998, the Company agreed with the initial
holders of the Series G Preferred Stock and the Series H Preferred Stock, that
if, at any time prior to December 31, 1999, the Company were to complete an
equity financing raising at least $3,000,000 in new equity, such initial holders
would have the non-assignable right (the "Reset Right"), but not the obligation
to exchange all or a portion of their shares of Series G Preferred Stock and
<PAGE> 7
Page 7 of 13 Pages
Series H Preferred Stock for shares of a new series of preferred stock with
substantially the same terms and conditions offered to the participants in the
new equity financing.
The Amphion Commitment described above triggered the reset right held by the
holders of the Series G Preferred Stock and the Series H Preferred Stock. As a
result, all of the holders of the Series G Preferred Stock and the Series H
Preferred Stock elected to exercise their rights to exchange all shares of
Series G
Preferred Stock held by such holders for shares of a new Series I Voting
Convertible Preferred Stock (the "Series I Preferred Stock"), as well as all
shares of Series H Preferred Stock held by such holders for shares of a new
Series J Non-Voting Convertible Preferred Stock (the "Series J Preferred
Stock").
In connection with its exercise of the Reset Right, Amphion Ventures exchanged
all 405 shares of Series G Preferred Stock held by it for 405 shares of Series I
Preferred Stock and all 1,402 shares of Series H Preferred Stock held by it for
1,402 shares of Series J Preferred Stock. Also, Amphion Partners converted all
50 shares of Series G Preferred Stock held by it for 50 shares of Series I
Preferred Stock. The Series I Preferred Stock and the Series J Preferred Stock
also contain a similar reset provision such that if at any time prior to
December 31, 1999, the Company were to complete an equity financing with third
parties raising at least $1,000,000 in new equity, the initial holders would
have the non-assignable right (the "Series I and J Reset Right"), but not the
obligation to exchange all or a portion of their shares of Series I Preferred
Stock or Series J Preferred Stock for shares of a new series of preferred stock
with substantially the same terms and conditions offered to the participants in
the new equity financing. Further, if the Company fails to complete such an
equity financing prior to December 31, 1999, the conversion price of the Series
I Preferred Stock and Series J Preferred Stock would automatically be reset to
not less than the greater of $1.00 or one-half of the average closing bid price
of Voting Common Stock on the Nasdaq SmallCap Market during the last twenty (20)
consecutive trading days of 1999. If the Series I and J Reset Right is
triggered, Amphion Ventures has agreed to convert or exchange a sufficient
number of shares of Series I Preferred Stock to Series J Preferred Stock or such
other series of preferred stock such that Amphion Ventures and its affiliates
will not be deemed the beneficial owner of more than fifty percent (50%) of the
Voting Common Stock.
Payment of Dividends on Preferred Stock
The holders of Series I Preferred Stock and the Series J Preferred Stock are
entitled to receive dividends on each such share held by a holder at the annual
rate of 8% of the original issue price of each such share ($10,000) payable in
arrears, when, as and if declared by the Company's Board of Directors, in cash
or additional shares of preferred stock. On December 31, 1998, the Company
issued: (a) 71 shares of Series I Preferred Stock to Amphion Ventures as payment
in full for the $710,000 of accrued, but unpaid dividends on the Series I
Preferred Stock as of such date (which included all accrued, but unpaid
dividends on the Series G Preferred Stock as of the effective date of the Reset
Right); (b) 4 shares of Series I Preferred Stock to Antiope Partners as payment
in full for the $40,000 of accrued, but unpaid dividends on the Series I
Preferred Stock as of such date (which included all accrued, but unpaid
dividends on the Series G Preferred Stock as of the effective date of the Reset
Right); and (c) 30 shares of Series J Preferred Stock to Amphion Ventures as
payment in full for the $300,000 of accrued, but unpaid dividends on the Series
J Preferred Stock as of such date (which included all accrued, but unpaid
dividends on the Series H Preferred Stock as of the effective date of the Reset
Right).
<PAGE> 8
Page 8 of 13 Pages
Additional Equity Purchases Under Amphion Commitment
Under the terms of the Amphion Commitment, Amphion Ventures acquired 98 shares
of Series J Preferred Stock on December 31, 1998, at a purchase price of $10,000
per share, totaling $980,000. The consideration was in the form of a note
payable to the Company for the full amount of the purchase price (the "Amphion
Note Payable"). The form of note payable is attached to this Schedule 13D as
Exhibit 99.33 and is incorporated herein by reference. As of the date of this
Schedule 13D, the Amphion Note Payable has been paid in full.
On December 31, 1998, Antiope Partners acquired 118 shares of Series J Preferred
Stock at a purchase price of $10,000 per share, totaling $1,180,000. The
consideration was in the form of a note payable to the Company for the full
amount of the purchase price (the "Antiope Note Payable"). The form of note
payable is attached to this Schedule 13D as Exhibit 99.33 and is incorporated
herein by reference. As of the date of this Schedule 13D, the Antiope Note
Payable has been paid in full.
Between May and December 1998: (a) Antiope Partners acquired 44,500 shares of
Voting Common Stock for per share prices ranging from $1.37 to $3.00, totaling
$99,237 in cash on the market; (b) Amphion Investments acquired 10,000 shares of
Voting Common Stock for per share price of $1.22, totaling $12,200 in cash on
the market; and (c) Richard C.E. Morgan acquired 46,200 shares of Voting Common
Stock for per share prices ranging from $1.22 to $2.94, totaling $74,773 in cash
on the market.
Conversion of Notes Payable by Stockholders
Under the terms of a Note Purchase Agreement dated December 29, 1997 (the "Note
Purchase Agreement"), the Company borrowed a total of $2,220,233 from Amphion
Ventures ($400,000) and Antiope Partners ($1,820,233). In December 1998, Amphion
Ventures and Antiope Partners each elected to convert one-half of the
outstanding indebtedness of the Company to each of them under the Note Purchase
Agreement, including all accrued, but unpaid interest thereon through December
31, 1998, into shares of Series I Preferred Stock or Series J Preferred Stock.
In addition, Amphion Ventures elected to convert $100,000 of the accrued, but
unpaid interest under the terms of its $1.47 million note payable from the
Company (the "Amphion Note Payable"), the proceeds of which were used by the
Company to settle its dispute with Xerox Corporation in December 1998, into
shares of Series J Preferred Stock.
As a result of the debt conversions described above, the Company issued (a) 35
shares of Series J Preferred Stock to Amphion Partners for its conversion of
indebtedness of the Company in the aggregate amount of $350,000 ($200,000 under
the terms of the Note Purchase Agreement plus $50,000 of accrued, but unpaid
interest thereon, and $100,000 of accrued, but unpaid interest on the Amphion
Note Payable) and (b) 118 shares of Series J Preferred Stock to Antiope Partners
for its conversion of indebtedness of the Company in the aggregate amount of
$1,180,000 ($910,000 under the terms of the Note Purchase Agreement plus
$270,000 of accrued, but unpaid interest thereon).
Each share of Series I Preferred Stock and Series J Preferred Stock has a
liquidation preference over all Common Stock of the Company equal to the stated
value of all such shares of preferred stock outstanding at the time plus all
accrued dividends. Shares of Series I Preferred Stock are convertible in whole
or in part at any time at the option of the holder into shares of Voting Common
Stock equal to the quotient of (a) the aggregate original Series I Preferred
Stock issue price of $10,000 per share (the "Original Series I Issue Price")
divided by (b) the conversion price of $4.00 per share, which is subject to
being adjusted from time
<PAGE> 9
Page 9 of 13 Pages
to time based on the occurrence of certain events described in the Series I
Certificate of Designation attached to this Schedule 13D as Exhibit 99.31. The
Series J Preferred Stock is substantially the same as the Series I Preferred
Stock, except shares of Series J Preferred Stock are convertible in whole or in
part at any time at the option of the holder into shares Non-Voting Common Stock
based on the same formula. The original Series J Preferred Stock issue price is
also $10,000 per share (the "Original Series J Issue Price") and the conversion
price is also $4.00 per share, which is subject to being adjusted based on the
occurrence of certain events described in the Series J Certificate of
Designation attached to this Schedule 13D as Exhibit 99.32.
The Series I Preferred Stock and the Series J Preferred Stock are both subject
to the optional redemption at any time by the Company, in whole or in part, at a
redemption price per share equal to the Original Series I Issue Price or the
Original Series J Issue Price, as the case may be, plus any accrued, but unpaid
dividends thereon. The Company's optional right of redemption is subject to each
Series I Preferred Stock or Series J Preferred Stock holder's right, as the case
may be, to convert such Series I Preferred Stock or Series J Preferred Stock, as
the case may be, into Voting or Non-Voting Common Stock, as the case may be,
within ten (10) business days after the company's notice of redemption.
The Series I Preferred Stock and the Series J Preferred Stock are also subject
to the mandatory conversion by the Company into shares of the Voting or
Non-Voting Common Stock, as the case may be, if the closing bid price of the
Company's Voting Common Stock on the Nasdaq SmallCap Market is at least $10.00
per share for a period of at least ninety (90) consecutive trading days.
Although the Non-Voting Common Stock may be converted to Voting Common Stock at
any time by a holder thereof, Amphion Ventures has agreed not to convert any
shares of Non-Voting Common Stock to Voting Common Stock without the prior
consent of the Company.
Funds used by Amphion Ventures for the transactions described herein were
obtained from a bank loan and capital contributions from limited partners. Funds
used by Amphion Partners for the transaction described herein were obtained from
current income.
ITEM 4. PURPOSE OF TRANSACTIONS.
The purchases made by Amphion Partners and Amphion Ventures reported in this
Amendment No. 10 were all in connection with their respective general investment
activities.
In addition to the acquisitions described in this Schedule 13D, Amphion Partners
and Amphion Ventures each has the right to acquire additional shares of Voting
Common Stock (or other capital stock of the Company), and to dispose of some or
all of their respective current holdings of Voting Common Stock or other capital
stock of the Company or to exercise any warrants or other rights any of them may
in the future have in respect thereof, in one or more open-market or privately
negotiated transactions or otherwise, on such terms and at such times as each
considers desirable.
<PAGE> 10
Page 10 of 13 Pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of May 1, 1999, Amphion Ventures owned the following
interests in the Company:
<TABLE>
<CAPTION>
Common Stock
Type of Security Number of Shares Equivalent if Converted
---------------- ---------------- -----------------------
<S> <C> <C>
Common Stock 361,409 N/A
Series A Convertible Preferred
Stock 57,692 57,692
Series B Convertible Preferred
Stock 52,816 52,816
Series C Convertible Preferred
Stock 25,492 25,492
Series I Convertible Preferred Stock 476 1,190,000(1)
Series J Convertible Preferred Stock 1,565 3,192,500(2)
Warrants 331,901 331,901
Options 3,843 3,843
</TABLE>
(1) Assumes a per share price of $10,000 divided by a conversion price of
$4.00, which is subject to being adjusted upon the occurrence of certain
events.
(2) Assumes a per share price of $10,000 divided by a conversion price of
$4.00, which is subject to being adjusted upon the occurrence of certain
events. The Series J Preferred Stock is convertible into Non-Voting Common
Stock at the option of the holder. Holders of Non-Voting Common Stock may
convert their shares 1-for-1 to Voting Common Stock at any time. Amphion
Ventures, however, has agreed with the Company not to convert its
Non-Voting Common Stock to Common Stock without the Company's prior written
consent.
As of May 1, 1999, Amphion Ventures owned 361,409 shares of Voting Common
Stock, which Amphion Ventures estimates is approximately 11.4% of the total
issued and outstanding shares of the Voting Common Stock. Assuming the exercise
by Amphion Ventures of all of its rights to convert all of the Series A, Series
B, Series C and Series I Preferred Stock, as well as the warrants and the
options held by it into Voting Common Stock, Amphion Ventures would be deemed
the beneficial holder of 2,023,153 shares of Voting Common Stock, which Amphion
Ventures estimates would constitute approximately 41.8% of the issued and
outstanding Voting Common Stock (assuming all outstanding options and warrants
had been exercised, and all outstanding convertible securities had been
converted into Common Stock, except for the Series J Preferred Stock) as of
May 1, 1999.
As of May 1, 1999, Amphion Partners owned 28,125 shares of Voting Common
Stock, which Amphion Partners estimates is approximately 0.9% of the total
issued and outstanding shares of the Voting Common Stock. Amphion Partners is
the general partner of Amphion Ventures and holds 0.2% of the total partnership
interests. See the holdings of Amphion Ventures above.
<PAGE> 11
Page 11 of 13 Pages
As of May 1, 1999, Antiope Partners owned the following interests in the
Company:
<TABLE>
<CAPTION>
Common Stock
Type of Security Number of Shares Equivalent if Converted
---------------- ---------------- -----------------------
<S> <C> <C>
Common Stock 86,534 N/A
Series I Convertible Preferred Stock 54 135,000(1)
Series J Convertible Preferred Stock 123 307,500(2)
Warrants 40,500 40,500
</TABLE>
(1) Assumes a per share price of $10,000 divided by a conversion price of $4.00
per share which is subject to being adjusted, upon the occurrence of
certain events.
(2) Assumes a per share price of $10,000 divided by a conversion price of
$4.00, which is subject to being adjusted upon the occurrence of certain
events. The Series J Preferred Stock is convertible into the Company's
Non-Voting Common Stock at the option of the holder. Holders of Non-Voting
Common Stock may convert their shares 1-for-1 to Voting Common Stock at any
time.
As of May 1, 1999, Antiope Partners owned 86,534 shares of Voting Common
Stock, which Antiope Partners estimates is approximately 2.7% of the total
issued and outstanding shares of Voting Common Stock of the Company.
Assuming the exercise by Antiope Partners of all of its rights to convert all of
the Series I Preferred Stock and the warrants held by it into Voting Common
Stock, Antiope Partners would be deemed the beneficial holder of 132,534 shares
of Common Stock, which Antiope Partners estimates would constitute approximately
7.8% of the issued and outstanding Voting Common Stock (assuming all outstanding
warrants had been exercised, and all outstanding convertible securities had been
converted into Voting Common Stock) as of May 1, 1999.
As of May 1, 1999, Amphion Investments owned 10,000 shares of Voting Common
Stock, which represents less than one percent of the issued and outstanding
shares of Voting Common Stock.
Richard C.E. Morgan, a managing member of Antiope Partners and Amphion Partners
and Chairman of the Board of the Company, owns 88,163 shares of Voting Common
Stock and options to purchase 3,000 additional shares, all of which are
currently vested. The 88,163 shares of Voting Common Stock owned by Mr. Morgan
represent approximately 2.8% of the total outstanding shares of Voting Common
Stock. If Mr. Morgan were to exercise all his options, he would be deemed the
beneficial owner of 91,163 shares of Voting Common Stock, which is estimated by
Mr. Morgan to represent 2.9% of the issued and outstanding shares of the Company
(assuming all outstanding warrants had been exercised and all outstanding
securities had been converted into Voting Common Stock as of May 1, 1999.
(b) Reference is made to Rows (7) through (10) of each Reporting
person's cover page.
(c) This amendment and filing reports the following events:
Except as reported herein, neither Amphion Ventures, Amphion Partners, Antiope
Partners, Amphion Investments nor, to the best knowledge of each of these or any
of the managing members of Partners I or Partners II or any of their controlling
persons has effected any transactions in the Common Stock (or securities
convertible into Common Stock) during the last sixty days.
(d) No amendment.
(e) Not applicable.
<PAGE> 12
Page 12 of 13 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
On May 7, 1999, the Company filed its definitive proxy statement with the
Securities and Exchange Commission concerning the annual meeting of
stockholders of the Company to be held on June 9, 1999, at which time the
Company proposes to elect directors, ratify accountants, approve an amendment
to the Company's Certificate of Incorporation, authorize the issuance of Voting
Common Stock upon the conversion of the Series I and Series J Preferred Stock,
and to transact other business as may properly come before the meeting.
Except as reported herein and in previous reports, none of Amphion Ventures,
Antiope Partners, Amphion Partners or Amphion Investments or, to the best
knowledge of each of them or any of the managing members of Antiope Partners,
Amphion Partners or Amphion Investments or any of their controlling persons has
entered into any contracts, arrangements, understandings or relationships (legal
or otherwise) with any person with respect to any securities of the Company,
which are in effect as of the date of this Amendment No. 10.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following Exhibits are filed herewith as exhibits to this Schedule 13D:
99.30 Joint Filing Agreement.
99.31 Certificate of Designation of Series I Voting Convertible
Preferred Stock.
99.32 Certificate of Designation of Series J Non-Voting Convertible
Preferred Stock.
99.33 Form of Note Payable from the Company.
99.34 Preferred Stock Purchase Agreement.
The following are incorporated herein by reference to other filings:
The Series A, B and C Designations of Preferred Stock which are attached to
Amendment No. 7 as Exhibits 17, 18 and 19, respectively.
<PAGE> 13
Page 13 of 13 Pages
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 28, 1999
AMPHION VENTURES L.P.
By: Amphion Partners L.L.C., General Partner
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
AMPHION PARTNERS L.L.C.
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
ANTIOPE PARTNERS L.L.C.
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
AMPHION INVESTMENTS L.L.C.
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
99.30 Joint Filing Agreement.
99.31 Certificate of Designation of Series I Voting Convertible
Preferred Stock.
99.32 Certificate of Designation of Series J Non-Voting Convertible
Preferred Stock.
99.33 Form of Note Payable to the Company.
99.34 Preferred Stock Purchase Agreement.
</TABLE>
<PAGE> 1
EXHIBIT 99.30
JOINT FILING AGREEMENT
The undersigned hereby agree to the joint filing of the Schedule 13D to
which this Agreement is attached.
Dated: May 28, 1999
AMPHION VENTURES L.P.
By: Amphion Partners L.L.C., General Partner
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
AMPHION PARTNERS L.L.C.
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
ANTIOPE PARTNERS L.L.C.
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
AMPHION INVESTMENTS L.L.C.
By: /s/ Richard C.E. Morgan
----------------------------------------
Richard C.E. Morgan, a Managing Member
<PAGE> 1
EXHIBIT 99.31
CERTIFICATES OF DESIGNATIONS,
PREFERENCES, POWERS AND RIGHTS
OF
SERIES I PREFERRED STOCK
OF
AXCESS INC.
Pursuant to Section 151 of the
General Corporation Law
of the State of Delaware
AXCESS INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Company"), hereby certifies that,
pursuant to the authority contained in Article Fourth of its Certificate of
Incorporation, as amended, and in accordance with the provisions of Sections 103
and 151 of the General Corporation Law of the State of Delaware, its Board of
Directors has adopted the following resolution providing for the issuance of
Series I Preferred Stock:
RESOLVED, that a series of the class of authorized preferred stock of the
Company is hereby created and the Board of Directors hereby fixes the
designation and amount thereof, and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereon as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall have a
par value of $.01 per share and shall be designated as Series I Preferred stock
(the "Series I Preferred Stock") and the number of shares constituting the
Series I Preferred Stock shall be TWO THOUSAND FIVE HUNDRED (2,500). The Series
I Preferred stock shall have a stated value of Ten Thousand Dollars ($10,000)
per share (the "Original Series I Issue Price").
SECTION 2. RANK. The Series I Preferred stock shall rank: (i) junior to any
other class or series of capital stock of the Company hereafter created
specifically ranking by its terms senior to the Series I Preferred Stock
(collectively, the "Senior Securities"); (ii) prior to all of the Company's
Common Stock and Non-Voting Common Stock, each $.01 par value per share (the
"Common Stock"); (iii) prior to any class or series of capital stock of the
Company hereafter created not specifically ranking by its terms senior to or on
parity with the Series I Preferred Stock (collectively, with the Common Stock,
the "Junior Securities"); and (iv) on parity with the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series G Preferred Stock,
Series H Preferred Stock of the Company, and any class or series of capital
stock of the Company hereafter created specifically ranking by its terms on
parity with the series I Preferred stock (the "Parity Securities") in each case
as to distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary (all such distributions being referred
to collectively as "Distributions").
-1-
<PAGE> 2
SECTION 3. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to Section 3(d), the holders of record of shares of
Series I Preferred stock (the "Holders"), in preference to the holders of shares
of capital stock ranking junior to the Series I Preferred Stock as to dividends,
shall be entitled to receive dividends on each share of Series I Preferred Stock
held of record at the annual rate of 8% of the Original Series I Issue Price,
payable semi-annually, to the extent of funds legally available therefor. Such
dividends shall be cumulative, shall accrue on each share on a daily basis
(calculated on the basis of a 360-day year, whether or not earned or declared,
from the date of original issue of such shares) and shall be payable in arrears,
when, as and if declared by the Board of Directors, on the last day of June and
December in each year (each such date, a "Dividend Payment Date"). Each such
dividend will be paid to the Holders as they appear on the stock register of the
Company on the record date therefor as shall be fixed by the Board of Directors,
which record date shall not be more than 25 days or less than 10 days preceding
the payment date thereof.
(b) The Company may, at its option, make any dividend payment to
Holders of Series I Preferred Stock in cash or in additional shares (including
fractional shares) of Series I Preferred Stock or in any combination of cash and
such shares. Each such dividend payment (or portion thereof) to be paid in
shares of Series I Preferred Stock shall be paid by the issuance and delivery to
such Holders of that number of additional shares (including any fractional
shares, if applicable) of Series I Preferred Stock as shall be equal to the
quotient obtained by dividing the aggregate dollar amount of such dividend
payment (or portion thereof) by the Original Series I Issue Price per share.
Dividends to be paid in additional shares of Series I Preferred Stock shall be
deemed to have been made when certificates representing such additional shares
of Series I Preferred Stock have been delivered to the record holders of the
Series I Preferred stock entitled to receive the same, in accordance with the
instructions of such holders designated in writing to the Company at least two
business days prior to any Dividend Payment Date. All shares of Series I
Preferred Stock paid as such dividends (the "Dividend Shares") shall be validly
issued, fully paid and non-assessable, shall be free and clear of preemptive
rights and liens, claims and encumbrances of any kind. Subject to the other
provisions of this Certificate of Designation, holders of shares of Series I
Preferred stock shall not be entitled to any dividend, whether payable in cash,
additional shares of Series I Preferred Stock, or other property, in excess of
full cumulative dividends as herein provided. No interest, or sum of money in
lieu of interest, shall be payable under this Certificate of Designation in
respect of any dividend payment or payments on the Series I Preferred Stock
which may be in arrears.
(c) So long as any Series I Preferred Stock remains outstanding, the
Company will not redeem, purchase or otherwise acquire any Junior Securities;
nor will the Company declare or pay any dividend or make any distribution (in
each case, whether in cash or securities or assets in kind) upon any Junior
Securities (other than stock dividends on Junior Securities, payable in shares
of, options, warrants or similar rights to acquire shares of, the same class
(and series, if applicable) of Junior Securities), or make any sinking fund or
other payment in respect of any of the foregoing if the Company shall not have
paid in full all accrued dividends on the Series I Preferred Stock in accordance
with Section 3(a) hereof.
(d) Anything contained herein to the contrary notwithstanding, if at
any time that any shares of Series I Preferred Stock are outstanding, the
closing bid price per share of the Common Stock on the Nasdaq Stock Market (or,
if the Common Stock is not then included in Nasdaq, but is listed on any
national securities exchange, on the principal national securities exchange on
which the Common Stock is then listed) remains above $20.00 per share (as
adjusted for any stock splits, reverse stock splits, stock dividends or similar
events after the date of this Certificate of Designation) for twenty (20)
consecutive
-2-
<PAGE> 3
trading days, then, commencing on such 20th trading day, the cumulative dividend
will not be payable; provided, however, that if the closing bid price per share
of the Common Stock remains below $20.00 for twenty (20) consecutive trading
days (as so adjusted), then the dividend will resume as of such 20th day.
SECTION 4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Company (each a "Liquidation Event"), either voluntary or involuntary, the
Holders of shares of Series I Preferred Stock shall be entitled to receive,
immediately after any distributions to Senior Securities required by the
Company's Certificate of Incorporation or any certificate of designation, and
prior in preference to any distribution to Junior Securities, and in parity with
any distribution to Parity Securities, an amount for each share of Series I
Preferred Stock then outstanding equal to the Original Series I Issue Price,
plus any and all accrued unpaid dividends. If upon the occurrence of such event,
and after payment in full of the preferential amounts with respect to the Senior
Securities, the assets and funds available to be distributed among the Holders
of the Series I Preferred stock and Parity Securities shall be insufficient to
permit the payment to such Holders of the full preferential amounts due to the
Holders of the Series I Preferred Stock and the Parity Securities, respectively,
then the entire assets and funds of the Company legally available for
distribution shall be distributed among the Holders of the Series I Preferred
Stock and the Parity Securities, pro rata, based on the respective liquidation
amounts to which each such series of stock is entitled by the Company's
Certificate of Incorporation and any certificate(s) of designation relating
thereto.
(b) Upon the completion of the distribution required by subsection
4(a), if assets remain in this Company, they shall be distributed to holders of
Junior Securities in accordance with the Company's Certificate of Incorporation
including any duly adopted certificate(s) of designation.
(c) At each Holder's option, a sale, conveyance or disposition of
all or substantially all of the assets of the Company or the effectuation by the
Company of a transaction or series of related transactions in which any person
or entity acquires more than fifty percent (50%) of the voting power of the
Company (a "Change of Control") shall be deemed to be a Liquidation Event as
defined in section 4(a); provided further that (i) a consolidation, merger,
acquisition, or other business combination of the Company with or into any other
publicly traded company or companies shall not be treated as a Liquidation Event
as defined in Section 4(a), but instead shall be treated pursuant to Section
5(d)(ii) hereof, and (ii) a consolidation, merger, acquisition, or other
business combination of the Company with or into any other non-publicly traded
company or companies shall be treated as a Liquidation Event as defined in
section 4(a). The Company shall not effect any transaction described in
subsection 4(c)(ii) unless it first gives thirty (30) business days prior notice
of such transaction (during which time the Holder shall be entitled to convert
its shares of Series I Preferred Stock into Common Stock). For purposes of this
section 4(c), neither the public offering, sale or distribution of shares of
stock (or assets) of the Company's Sandia Imaging Systems Corporation subsidiary
or the Lasertechnics Marking Corporation subsidiary shall be deemed to be a
Liquidation Event.
(d) In the event that, immediately prior to the closing of a
transaction described in section 4(c) which would constitute a Liquidation
Event, the cash distributions required by Section 4(a) have not been made, the
Company shall either: (i) cause such closing to be postponed until such cash
distributions have been made, or (ii) cancel such transaction, in which event
the rights of the Holders of Series I Preferred stock shall be the same as
existing immediately prior to such proposed transaction.
-3-
<PAGE> 4
SECTION 5. CONVERSION. The record Holders of this Series I Preferred Stock
shall have conversion ights as follows (the "Conversion Rights"):
(a) Right to Convert. On the terms and subject to the conditions set
forth in this Certificate of Designation, each record Holder of Series I
Preferred stock shall be entitled to convert the shares of Series I Preferred
Stock held by such Holder, in whole at any time and in part from time to time,
into a number of fully-paid and non-assessable shares of voting Common Stock of
the Company equal to the quotient of (i) the aggregate Original Series I Issue
Price of the shares of Series I Preferred Stock being converted divided by (ii)
the Conversion Price as determined pursuant to this Section 5 (the "Conversion
Price"). The Conversion Price shall initially be FOUR DOLLARS ($4.00) per share
of Series I Preferred Stock. The Conversion Price shall be subject to adjustment
from time to time as provided in Section 5(d).
(b) Mechanics of Conversion. Conversion of shares of Series I
Preferred Stock may be effected by written notice to the Company, and shall be
effective upon receipt of such notice by the Company, or as otherwise provided
in such notice, and delivery to the Company of (i) one or more certificates
representing the shares of Series I Preferred Stock being converted, (ii) a
certificate of guaranteed delivery of such certificates reasonably satisfactory
to the Company, or (iii) evidence of the loss, theft or destruction of such
certificates pursuant to Section 11 of this Certificate of Designation, together
with any indemnity or security reasonably requested by the Company pursuant to
such Section 11. Upon any conversion of shares of Series I Preferred Stock
pursuant to this Section 5, the Holder shall be deemed to be the record holder
of the shares of Common Stock into which shares of Series I Preferred Stock have
been converted and shall be entitled to receive duly executed certificates, in
proper form, representing such shares of voting Common Stock as soon as
practicable thereafter. Anything contained herein to the contrary
notwithstanding, if any conversion of shares of Series I Preferred Stock 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 shares of Common Stock issuable upon such conversion, in the aggregate, shall
be rounded to the nearest whole number of shares (with one-half of a share
rounded up).
(c) Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the Series I Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all then outstanding
Series I Preferred Stock. If at any time the number of authorized but unissued
shares of Common Stock (excluding for this purpose any authorized but unissued
shares of Common Stock that are properly reserved for some other purpose) shall
be insufficient to cause the conversion into Common Stock of all shares of
Series I Preferred Stock then outstanding, the Company will take such corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
(d) Adjustment to Conversion Rate.
(i) Adjustment to Conversion Price Due to Stock Split, Stock
Dividend, Etc. If, at any time that any shares of Series I Preferred Stock
remaining outstanding, the number of outstanding shares of Common Stock is
increased by a stock split, stock dividend, or other similar event, the
Conversion Price shall be proportionately reduced, or if the number of
outstanding shares of Common Stock is decreased by a reverse stock split,
combination or reclassification of shares, or other similar event, the
Conversion Price shall be proportionately increased.
-4-
<PAGE> 5
(ii) Adjustment Due to Merger, Consolidation, Etc. If, at any
time that any shares of Series I Preferred Stock remain outstanding, there shall
be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of Common
Stock of the Company 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
Company or another entity, or there is a sale of all or substantially all the
Company's assets or there is a Change of Control not deemed to be a Liquidation
Event pursuant to section 4(c), then the Holders shall thereafter have the right
to receive upon conversion of shares of Series I Preferred Stock, upon the basis
and upon the terms and conditions specified herein and in lieu of the shares of
Common Stock immediately theretofore issuable upon conversion, such stock,
securities and/or other assets which the Holder would have been entitled to
receive in such transaction had such shares of Series I Preferred Stock been
converted immediately prior to such transaction, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
the Holders of the Series I Preferred Stock to the end that the provisions
hereof (including, without limitation, provisions for the adjustment of the
Conversion Price and of the number of shares issuable upon conversion of the
Series I Preferred Stock) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities thereafter deliverable upon the
exercise hereof. The Company shall not effect any transaction described in this
subsection 5(d)(ii) unless (A) it first gives thirty (30) business days prior
notice of such merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event (during which time the Holders shall be
entitled to convert their shares of Series I Preferred Stock into Common Stock)
and (B) the resulting successor or acquiring entity (if not the Company) assumes
by written instrument the obligations of the Company under this Certificate of
Designation including this subsection 5(d)(ii).
(iii) Adjustment Due to Qualified Equity Financing. If the
Company consummates an equity financing with any third party at any time on or
before December 31, 1999, which equity financing raises at least $1,000,000 in
cash (a "Qualified Equity Financing"), the Holder will have the non-assignable
right, exercisable by written notice to the Company given at any time within
thirty (30) days after the date of the closing of a Qualified Equity Financing,
to exchange the shares of Series I Preferred Stock, in whole or in part, for
shares of a new series of preferred stock of the Company (the "Exchange
Preferred"), on the following basis:
(A) If the securities issued in such Qualified Equity
Financing (the "New Securities") are convertible into voting or non-voting
Common Stock, the Exchange Preferred will be convertible into voting Common
Stock at a conversion price equal to the lesser of (x) the Conversion Price then
applicable under the Series I Preferred Stock and (y) the conversion price then
applicable under the New Securities.
(B) All other terms of the Exchange Preferred will be
economically equivalent to the terms of the New Securities, determined as if the
New Securities had been issued on the date hereof. The Exchange Preferred will
be on parity with the New Securities for all purposes, and will vote together
with the New Securities for all purposes, except as otherwise required by law.
(C) If the Holder exchanges any Shares pursuant to this
paragraph 5(iii), it shall be entitled to any additional rights with respect to
the shares of Exchange Preferred (including, without limitation, rights of first
refusal or payment of attorneys' fees) as the purchasers of New Securities shall
be entitled to under the Qualified Equity Financing.
-5-
<PAGE> 6
(D) The number of shares of Exchange Preferred issuable to
the Holder pursuant to any exchange of Shares hereunder will be the number of
shares of Exchange Preferred that the Holder could have purchased on the date
hereof for a purchase price equal to the aggregate purchase price hereunder of
the Shares to be exchanged therefor, payable in cash (determined on a basis so
that the cash purchase price of shares of Exchange Preferred and the cash
purchase price of the New Securities are economically equivalent).
(E) If the Holder exchanges any Shares pursuant to this
paragraph 5(iii), such exchange will not result in an increase in the conversion
price above $4.00 per share.
(F) If the Company does not consummate a Qualified Equity
Financing on or before December 31, 1999, the $4.00 conversion price of the
Preferred Stock shall be reset to not less than the greater of (i) $1.00 or (ii)
one-half of the average closing bid price per share of the Company's Common
Stock on the Nasdaq SmallCap Market (or if the Common Stock is not then included
on Nasdaq, but is listed on any national securities exchange, on the principal
national securities exchange on which the Common Stock is then listed) during
the last twenty (20) trading days of 1999.
SECTION 6. VOTING. The Holders shall be entitled to vote, together with the
holders of the Company's voting Common Stock, as a single class, on all matters
submitted to a vote of the stockholders of the Company, or as to which the
holders of the voting Common Stock shall otherwise be entitled to vote. In all
such matters, the Holders shall be entitled to cast, for each share of Series I
Preferred Stock held of record, a number of votes equal to the product of (i)
the number of votes that one share of voting Common Stock shall be entitled to
cast on such matter times (ii) the number of shares of voting Common Stock into
which one share of Series I Preferred Stock is convertible on the record date
for such vote. As used in this Section 6, all references to votes and voting
shall refer as well to action and actions by written consent.
SECTION 7. OPTIONAL REDEMPTION BY COMPANY. The Series I Preferred Stock
shall be subject to the optional redemption by the Company, in whole at any time
or in part from time to time, at a redemption price per share equal to the
Original Series I Issue Price, plus any and all accrued unpaid dividends
thereon. The Company shall give at least ten (10) days' prior written notice of
any redemption pursuant to this Section 7 to each Holder of shares of Series I
Preferred Stock to be redeemed. The Company's optional right of redemption is
subject to each Holder's right to convert all or any part of the shares to be
redeemed into Common Stock pursuant to Section 5, provided that the Holder gives
written notice of such conversion to the Company in accordance with Section 5
within ten (10) business days after the Company's notice of redemption. The
Holders of Series I Preferred Stock shall not be entitled to any mandatory
redemption of their Shares without the consent of the Company.
SECTION 8. MANDATORY CONVERSION BY COMPANY. Each share of Series I
Preferred Stock shall automatically convert into that number of fully-paid and
non-assessable shares of voting Common Stock of the Company equal to the
Original Series I Issue Price plus all accrued, but unpaid dividends thereon,
divided by the Conversion Price (subject to adjustment from time to time as
provided in Section 5(d)), upon the closing bid price per share of the Common
Stock on the Nasdaq SmallCap Market (or, if the Common Stock is not then
included in Nasdaq, but is listed on any national securities exchange, on the
principal national securities exchange on which the Common Stock is then listed)
having reached and remained at $10.00 per share or more for a period of ninety
(90) consecutive trading days.
-6-
<PAGE> 7
SECTION 9. STATUS OF CONVERTED OR REDEEMED STOCK. In the event any shares
of Series I Preferred Stock shall be converted pursuant to Section 5 hereof or
redeemed pursuant to Section 7 hereof, the shares so converted or redeemed shall
be canceled, shall return to the status of authorized but unissued Preferred
Stock of no designated series, and shall not thereafter be issuable by the
Company as Series I Preferred Stock.
SECTION 10. OTHER PREFERRED STOCK. Nothing contained herein shall be
construed to prevent the Board of Directors from authorizing the creation of, or
to prevent the Company from issuing shares of, one or more series of Preferred
Stock senior to, junior to or on parity with the Series I Preferred Stock as to
dividend, liquidation rights or otherwise.
SECTION 11. LOST OR STOLEN CERTIFICATES. Upon receipt by the Company of
evidence of the loss, theft, destruction or mutilation of any certificates
representing shares of Series I Preferred Stock, and (in the case of loss, theft
or destruction) of indemnity or security reasonably satisfactory to the Company,
and upon surrender and cancellation of the certificate(s), if mutilated, the
Company shall execute and deliver to the record Holder thereof new
certificate(s) of like tenor and date. However, the Company shall not be
obligated to re-issue such lost or stolen certificates if the Holder
contemporaneously requests the Company to convert such shares of Series I
Preferred Stock into shares of Common Stock.
SECTION 12. FRACTIONAL SHARES. In the event a Holder of Series I Preferred
Stock shall be entitled to receive a fractional interest in a share of Series I
Preferred Stock of less than one one-hundredth of one share, except as otherwise
provided herein, the Company shall either, in the sole discretion of the Board
of Directors, (a) round such fractional interest up to the next one-hundredth of
one whole share of Series I Preferred Stock or (b) deliver cash in the amount of
the fair market value (as determined by the Board of Directors or in any manner
prescribed by the Board of Directors) of such fractional interest.
SECTION 13. PREEMPTIVE RIGHTS. The Holders of Series I Preferred Stock are
not entitled to any preemptive or subscription rights in respect of any
securities of the Company.
SECTION 14. COUNTERPARTS. This Certificate of Designation may be executed
on separate counterparts and shall be effective as of the date signed.
**Remainder Intentionally Left Blank**
-7-
<PAGE> 8
IN WITNESS WHEREOF, AXCESS Inc. has caused this certificate to be signed by
its President and attested by its Secretary, as of the 10th day of March, 1999.
/s/ Harry S. Budow
---------------------------------------
Harry S. Budow, Chief Executive Officer
Attest:
/s/ Danny G. Hair
- ------------------------
Danny G. Hair, Secretary
-8-
<PAGE> 1
EXHIBIT 99.32
CERTIFICATE OF DESIGNATION,
PREFERENCES, POWERS AND RIGHTS
OF
SERIES J PREFERRED STOCK
OF
AXCESS INC.
Pursuant to Section 151 of the
General Corporation Law
of the State of Delaware
AXCESS INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Company"), hereby certifies that,
pursuant to the authority contained in Article Fourth of its Certificate of
Incorporation, as amended, and in accordance with the provisions of Sections 103
and 151 of the General Corporation Law of the State of Delaware, its Board of
Directors has adopted the following resolution providing for the issuance of
Series J Preferred Stock:
RESOLVED, that a series of the class of authorized Preferred Stock of the
Company is hereby created and the Board of Directors hereby fixes the
designation and amount thereof, and the voting powers, preferences, and
relative, participating, optional and other special rights of the shares of such
series, and the qualifications, limitations, or restrictions thereon as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall have a
par value of $.01 per share and shall be designated as Series J Preferred Stock
(the "Series J Preferred Stock") and the number of shares constituting the
Series J Preferred Stock shall be TWO THOUSAND FIVE HUNDRED (2,500). The Series
J Preferred Stock shall have a stated value of Ten Thousand Dollars ($10,000)
per share (the "Original Series J Issue Price").
SECTION 2. RANK. The Series J Preferred Stock shall rank: (i) junior to any
other class or series of capital stock of the Company hereafter created
specifically ranking by its terms senior to the Series J Preferred Stock
(collectively, the "Senior Securities"); (ii) prior to all of the Company's
Common Stock, $.01 par value per share ("Common Stock") and Non-Voting Common
Stock, $.01 par value per share (the "Non-Voting Common Stock"); (iii) prior to
any class or series of capital stock of the Company hereafter created not
specifically ranking by its terms senior to or on parity with the Series J
Preferred Stock (collectively, with the Common Stock and Non-Voting Common
Stock, the "Junior Securities"); and (iv) on parity with the Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock, the Series G
Preferred Stock, the Series H Preferred Stock, the Series I Preferred Stock of
the Company and any class or series of capital stock of the Company hereafter
created specifically ranking by its terms on parity with the Series J Preferred
Stock (the "Parity Securities") in each case as to distributions of assets upon
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary (all such distributions being referred to collectively as
"Distributions").
-1-
<PAGE> 2
SECTION 3. DIVIDENDS AND DISTRIBUTIONS. (a) Subject to Section 3(d), the
holders of record of shares of Series J Preferred Stock (the "Holders"), in
preference to the holders of shares of capital stock ranking junior to the
Series J Preferred Stock as to dividends, shall be entitled to receive dividends
on each share of Series J Preferred Stock held of record at the annual rate of
8% of the Original Series J Issue Price, payable semi-annually, to the extent of
funds legally available therefor. Such dividends shall be cumulative, shall
accrue on each share on a daily basis (calculated on the basis of a 360-day
year, whether or not earned or declared, from the date of original issue of such
shares) and shall be payable in arrears, when, as and if declared by the Board
of Directors, on the last day of June and December in each year (each such date,
a "Dividend Payment Date"). Each such dividend will be paid to the Holders as
they appear on the stock register of the Company on the record date therefor as
shall be fixed by the Board of Directors, which record date shall not be more
than 25 days or less than 10 days preceding the payment date thereof.
(b) The Company may, at its option, make any dividend payment to
Holders of Series J Preferred Stock in cash or in additional shares of Series J
Preferred Stock or in any combination of cash and such shares. Each such
dividend payment (or portion thereof) to be paid in shares of Series J Preferred
Stock shall be paid by the issuance and delivery to such Holders of that number
of additional shares of Series J Preferred Stock as shall be equal to the
quotient obtained by dividing the aggregate dollar amount of such dividend
payment (or portion thereof) by the Original Series J Issue Price per share.
Dividends to be paid in additional shares of Series J Preferred Stock shall be
deemed to have been made when certificates representing such additional shares
of Series J Preferred Stock have been delivered to the record holders of the
Series J Preferred Stock entitled to receive the same, in accordance with the
instructions of such holders designated in writing to the Company at least two
business days prior to any Dividend Payment Date. All shares of Series J
Preferred Stock paid as such dividends (the "Dividend Shares") shall be validly
issued, fully paid and non-assessable, shall be free and clear of preemptive
rights and liens, claims and encumbrances of any kind. Subject to the other
provisions of this Certificate of Designation, holders of shares of Series J
Preferred Stock shall not be entitled to any dividend, whether payable in cash,
additional shares of Series J Preferred Stock, or other property, in excess of
full cumulative dividends as herein provided. No interest, or sum of money in
lieu of interest, shall be payable under this Certificate of Designation in
respect of any dividend payment or payments on the Series J Preferred Stock
which may be in arrears.
(c) So long as any Series J Preferred Stock remains outstanding, the
Company will not redeem, purchase or otherwise acquire any Junior Securities;
nor will the Company declare or pay any dividend or make any distribution (in
each case, whether in cash or securities or assets in kind) upon any Junior
Securities (other than stock dividends on Junior Securities, payable in shares
of, options, warrants or similar rights to acquire shares of, the same class
(and series, if applicable) of Junior Securities), or make any sinking fund or
other payment in respect of any of the foregoing if the Company shall not have
paid in full all accrued dividends on the Series J Preferred Stock in accordance
with Section 3(a) hereof.
(d) Anything contained herein to the contrary notwithstanding, if at
any time that any shares of Series J Preferred Stock are outstanding, the
closing bid price per share of the Common Stock on the Nasdaq Stock Market (or,
if the Common Stock is not then included in Nasdaq, but is listed on any
national securities exchange, on the principal national securities exchange on
which the Common Stock is then listed) remains above $20.00 per share (as
adjusted for any stock splits, reverse stock splits, stock dividends or similar
events after the date of this Certificate of Designation) for twenty (20)
consecutive trading days, then, commencing on such 20th trading day, the
cumulative dividend will not be payable; provided, however, that if the closing
bid price per share of the Common Stock remains below $20.00 for twenty (20)
consecutive trading days (as so adjusted), then the dividend will resume as of
such 20th day.
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<PAGE> 3
SECTION 4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Company (each a "Liquidation Event"), either voluntary or involuntary, the
Holders of shares of Series J Preferred Stock shall be entitled to receive,
immediately after any distributions to Senior Securities required by the
Company's Certificate of Incorporation or any certificate of designation, and
prior in preference to any distribution to Junior Securities, and in parity with
any distribution to Parity Securities, an amount for each share of Series J
Preferred Stock then outstanding equal to the Original Series J Issue Price,
plus any and all accrued unpaid dividends. If upon the occurrence of such event,
and after payment in full of the preferential amounts with respect to the Senior
Securities, the assets and funds available to be distributed among the Holders
of the Series J Preferred Stock and Parity Securities shall be insufficient to
permit the payment to such Holders of the full preferential amounts due to the
Holders of the Series J Preferred Stock and the Parity Securities, respectively,
then the entire assets and funds of the Company legally available for
distribution shall be distributed among the Holders of the Series J Preferred
Stock and the Parity Securities, pro rata, based on the respective liquidation
amounts to which each such series of stock is entitled by the Company's
Certificate of Incorporation and any certificate(s) of designation relating
thereto.
(b) Upon the completion of the distribution required by subsection
4(a), if assets remain in this Company, they shall be distributed to holders of
Junior Securities in accordance with the Company's Certificate of Incorporation
including any duly adopted certificate(s) of designation.
(c) At each Holder's option, a sale, conveyance or disposition of
all or substantially all of the assets of the Company or the effectuation by the
Company of a transaction or series of related transactions in which any person
or entity acquires more than fifty percent (50%) of the voting power of the
Company (a "Change of Control") shall be deemed to be a Liquidation Event as
defined in section 4(a); provided further that (i) a consolidation, merger,
acquisition, or other business combination of the Company with or into any other
publicly traded company or companies shall not be treated as a Liquidation Event
as defined in Section 4(a), but instead shall be treated pursuant to Section
5(d)(ii) hereof, and (ii) a consolidation, merger, acquisition, or other
business combination of the Company with or into any other non-publicly traded
company or companies (except for a consolidation, merger, acquisition or other
business combination with one of its subsidiaries) shall be treated as a
Liquidation Event as defined in section 4(a). The Company shall not effect any
transaction described in subsection 4(c)(ii) (except for a consolidation,
merger, acquisition or other business combination with one of its subsidiaries)
unless it first gives thirty (30) business days prior notice of such transaction
(during which time the Holder shall be entitled to convert its shares of Series
J Preferred Stock into Non-Voting Common Stock). For purposes of this section
4(c), neither the public offering, sale or distribution of shares of stock (or
assets) of the Company's Sandia Imaging Systems Corporation subsidiary or the
Lasertechnics Marking Corporation subsidiary shall be deemed to be a Liquidation
Event.
(d) In the event that, immediately prior to or contemporaneously
with the closing of a transaction described in section 4(c) which would
constitute a Liquidation Event, the cash distributions required by Section 4(a)
have not been made, the Company shall either: (i) cause such closing to be
postponed until such cash distributions have been made, or (ii) cancel such
transaction, in which event the rights of the Holders of Series J Preferred
Stock shall be the same as existing immediately prior to such proposed
transaction.
SECTION 5. CONVERSION. The record Holders of this Series J Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
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<PAGE> 4
(a) Right to Convert. On the terms and subject to the conditions set
forth in this Certificate of Designation, each record Holder of Series J
Preferred Stock shall be entitled to convert the shares of Series J Preferred
Stock held by such Holder, in whole at any time and in part from time to time,
into a number of fully-paid and non-assessable shares of Non-Voting Common Stock
of the Company equal to the quotient of (i) the aggregate Original Series J
Issue Price of the shares of Series J Preferred Stock being converted divided by
(ii) the Conversion Price as determined pursuant to this Section 5 (the
"Conversion Price"). The Conversion Price shall initially be FOUR DOLLARS
($4.00) per share of Series J Preferred Stock. The Conversion Price shall be
subject to adjustment from time to time as provided in Section 5(d).
(b) Mechanics of Conversion. Conversion of shares of Series J
Preferred Stock may be effected by written notice to the Company, and shall be
effective upon receipt of such notice by the Company, or as otherwise provided
in such notice, and delivery to the Company of (i) one or more certificates
representing the shares of Series J Preferred Stock being converted, (ii) a
certificate of guaranteed delivery of such certificates reasonably satisfactory
to the Company, or (iii) evidence of the loss, theft or destruction of such
certificates pursuant to Section 11 of this Certificate of Designation, together
with any indemnity or security reasonably requested by the Company pursuant to
such Section 11. Upon any conversion of shares of Series J Preferred Stock
pursuant to this Section 5, the Holder shall be deemed to be the record holder
of the shares of Non-Voting Common Stock into which shares of Series J Preferred
Stock have been converted and shall be entitled to receive duly executed
certificates, in proper form, representing such shares of Non-Voting Common
Stock as soon as practicable thereafter. Anything contained herein to the
contrary notwithstanding, if any conversion of shares of Series J Preferred
Stock would create a fractional share of Non-Voting Common Stock or a right to
acquire a fractional share of Non-Voting Common Stock, such fractional share
shall be disregarded and the number of shares of Non-Voting Common Stock
issuable upon such conversion, in the aggregate, shall be rounded to the nearest
whole number of shares (with one-half of a share rounded up).
(c) Reservation of Stock Issuable Upon Conversion. Other than as set
forth below, the Company shall at all times reserve and keep available out of
its authorized but unissued shares of Non-Voting Common Stock, solely for the
purpose of effecting the conversion of the Series J Preferred Stock, such number
of its shares of Non-Voting Common Stock as shall from time to time be
sufficient to effect the conversion of all then outstanding Series J Preferred
Stock. Notwithstanding the foregoing, if at any time the number of authorized
but unissued shares of Non-Voting Common Stock (excluding for this purpose any
authorized but unissued shares of Non-Voting Common Stock that are properly
reserved for some other purpose) shall be insufficient to cause the conversion
into Non-Voting Common Stock of all shares of Series J Preferred Stock then
outstanding, the Company will, when authorized by the Board of Directors, take
such corporate action as may be reasonably necessary to increase its authorized
but unissued shares of Non-Voting Common Stock to such number of shares as shall
be sufficient for such purpose.
(d) Adjustment to Conversion Rate.
(i) Adjustment to Conversion Price Due to Stock Split, Stock
Dividend, Etc. If, at any time that any shares of Series J Preferred Stock
remaining outstanding, the number of outstanding shares of Non-Voting Common
Stock is increased by a stock split, stock dividend, or other similar event, the
Conversion Price shall be proportionately reduced, or if the number of
outstanding shares of Non-Voting Common Stock is decreased by a reverse stock
split, combination or reclassification of shares, or other similar event, the
Conversion Price shall be proportionately increased.
(ii) Adjustment Due to Merger, Consolidation, Etc. If, at any
time that any shares of Series J Preferred Stock remain outstanding, there shall
be any merger, consolidation, exchange of
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<PAGE> 5
shares, recapitalization, reorganization, or other similar event, as a result of
which shares of Non-Voting Common Stock of the Company 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 Company or another entity, or there is a sale of all
or substantially all the Company's assets or there is a Change of Control not
deemed to be a Liquidation Event pursuant to section 4(c), then the Holders
shall thereafter have the right to receive upon conversion of shares of Series J
Preferred Stock, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Non-Voting Common Stock immediately
theretofore issuable upon conversion, such stock, securities and/or other assets
which the Holder would have been entitled to receive in such transaction had
such shares of Series J Preferred Stock been converted immediately prior to such
transaction, and in any such case appropriate provisions shall be made with
respect to the rights and interests of the Holders of the Series J Preferred
Stock to the end that the provisions hereof (including, without limitation,
provisions for the adjustment of the Conversion Price and of the number of
shares issuable upon conversion of the Series J Preferred Stock) shall
thereafter be applicable, as nearly as may be practicable in relation to any
securities thereafter deliverable upon the exercise hereof. The Company shall
not effect any transaction described in this subsection 5(d)(ii) unless (A) it
first gives thirty (30) business days prior notice of such merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event (during which time the Holders shall be entitled to convert their
shares of Series J Preferred Stock into Non-Voting Common Stock) and (B) the
resulting successor or acquiring entity (if not the Company) assumes by written
instrument the obligations of the Company under this Certificate of Designation
including this subsection 5(d)(ii).
(iii) Adjustment Due to Qualified Equity Financing. If the
Company consummates an equity financing with any third party at any time on or
before December 31, 1999, which equity financing raises at least $1,000,000 in
cash (a "Qualified Equity Financing"), the Holder will have the non-assignable
right, exercisable by written notice to the Company given at any time within
thirty (30) days after the date of the closing of a Qualified Equity Financing,
to exchange the shares of Series J Preferred Stock, in whole or in part, for
shares of a new series of preferred stock of the Company (the "Exchange
Preferred"), on the following basis:
(A) If the securities issued in such Qualified Equity
Financing (the "New Securities") are convertible into voting or non-voting
Common Stock, the Exchange Preferred will be convertible into voting Common
Stock at a conversion price equal to the lesser of (x) the Conversion Price then
applicable under the Series J Preferred Stock and (y) the conversion price then
applicable under the New Securities.
(B) All other terms of the Exchange Preferred will be
economically equivalent to the terms of the New Securities, determined as if the
New Securities had been issued on the date hereof. The Exchange Preferred will
be on parity with the New Securities for all purposes, and will vote together
with the New Securities for all purposes, except as otherwise required by law.
(C) If the Holder exchanges any Shares pursuant to this
paragraph 5(iii), it shall be entitled to any additional rights with respect to
the shares of Exchange Preferred (including, without limitation, rights of first
refusal or payment of attorneys' fees) as the purchasers of New Securities shall
be entitled to under the Qualified Equity Financing.
(D) The number of shares of Exchange Preferred issuable to
the Holder pursuant to any exchange of Shares hereunder will be the number of
shares of Exchange Preferred that the Holder could have purchased on the date
hereof for a purchase price equal to the aggregate purchase price hereunder of
the Shares to be exchanged therefor, payable in cash (determined on a basis so
that the cash
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<PAGE> 6
purchase price of shares of Exchange Preferred and the cash purchase price of
the New Securities are economically equivalent).
(E) If the Holder exchanges any Shares pursuant to this
paragraph 5(iii), such exchange will not result in an increase in the conversion
price above $4.00 per share.
(F) If the Company does not consummate a Qualified Equity
Financing on or before December 31, 1999, the $4.00 conversion price of the
Preferred Stock shall be reset to not less than the greater of (i) $1.00 or (ii)
one-half of the average closing bid price per share of the Company's Common
Stock on the Nasdaq SmallCap Market (or if the Common Stock is not then included
on Nasdaq, but is listed on any national securities exchange, on the principal
national securities exchange on which the Common Stock is then listed) during
the last twenty (20) trading days of 1999.
SECTION 6. VOTING. The Holders shall not be entitled to vote, either
together with the holders of the Company's voting Common Stock or voting
Preferred Stock, or as a single class, on any matter submitted to a vote of the
stockholders of the Company, or as to which the holders of the voting Common
Stock or voting Preferred Stock shall otherwise be entitled to vote. As used in
this Section 6, all references to votes and voting shall refer as well to action
and actions by written consent.
SECTION 7. OPTIONAL REDEMPTION BY COMPANY. The Series J Preferred Stock
shall be subject to optional redemption by the Company, in whole at any time or
in part from time to time, at a redemption price per share equal to the Original
Series J Issue Price, plus any and all accrued unpaid dividends thereon. The
Company shall give at least 10 days' prior written notice of any redemption
pursuant to this Section 7 to each Holder of shares of Series J Preferred Stock
to be redeemed. The Company's optional right of redemption is subject to each
Holder's right to convert all or any part of the shares to be redeemed into
Non-Voting Common Stock pursuant to Section 5, provided that the Holder gives
written notice of such conversion to the Company in accordance with Section 5
within ten (10) business days after the Company's notice of redemption. The
Holders of Series J Preferred Stock shall not be entitled to any mandatory
redemption of their Shares without the consent of the Company.
SECTION 8. MANDATORY CONVERSION BY COMPANY. Each share of Series J
Preferred Stock shall automatically convert into that number of fully-paid and
non-assessable shares of non-voting Common Stock of the Company equal to the
Original Series J Issue Price plus all accrued, but unpaid dividends thereon,
divided by the Conversion Price (subject to adjustment from time to time as
provided in Section 5(d)), upon the closing bid price per share of the Common
Stock on the Nasdaq SmallCap Market (or, if the Common Stock is not then
included in Nasdaq, but is listed on any national securities exchange, on the
principal national securities exchange on which the Common Stock is then listed)
having reached and remained at $10.00 per share or more for a period of ninety
(90) consecutive trading days.
SECTION 9. STATUS OF CONVERTED OR REDEEMED STOCK. In the event any shares
of Series J Preferred Stock shall be converted pursuant to Section 5 hereof or
redeemed pursuant to Section 7 hereof, the shares so converted or redeemed shall
be canceled, shall return to the status of authorized but unissued Preferred
Stock of no designated series, and shall not thereafter be issuable by the
Company as Series J Preferred Stock.
SECTION 10. OTHER PREFERRED STOCK. Nothing contained herein shall be
construed to prevent the Board of Directors from authorizing the creation of, or
to prevent the Company from issuing shares of, one or more series of Preferred
Stock senior to, junior to or on parity with the Series J Preferred Stock as to
dividend, liquidation rights or otherwise.
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<PAGE> 7
SECTION 11. LOST OR STOLEN CERTIFICATES. Upon receipt by the Company of
evidence of the loss, theft, destruction or mutilation of any certificates
representing shares of Series J Preferred Stock, and (in the case of loss, theft
or destruction) of indemnity or security reasonably satisfactory to the Company,
and upon surrender and cancellation of the certificate(s), if mutilated, the
Company shall execute and deliver to the record Holder thereof new
certificate(s) of like tenor and date. However, the Company shall not be
obligated to re-issue such lost or stolen certificates if the Holder
contemporaneously requests the Company to convert such shares of Series J
Preferred Stock into shares of Non-Voting Common Stock.
SECTION 12. FRACTIONAL SHARES. In the event a Holder of Series J Preferred
Stock shall be entitled to receive a fractional interest in a share of Series J
Preferred Stock of less than one one-hundredth of one share, except as otherwise
provided herein, the Company shall either, in the sole discretion of the Board
of Directors, (a) round such fractional interest up to the next one-hundredth of
one whole share of Series J Preferred Stock or (b) deliver cash in the amount of
the fair market value (as determined by the Board of Directors or in any manner
prescribed by the Board of Directors) of such fractional interest.
SECTION 13. PREEMPTIVE RIGHTS. The Holders of Series J Preferred Stock are
not entitled to any preemptive or subscription rights in respect of any
securities of the Company.
SECTION 14. COUNTERPARTS. This Certificate of Designation may be executed
on separate counterparts and shall be effective as of the date signed.
**Remainder Intentionally Left Blank**
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<PAGE> 8
IN WITNESS WHEREOF, AXCESS Inc. has caused this certificate to be signed by
its President and attested by its Secretary, as of the 10th day of March, 1999.
AXCESS INC.
By: /s/ Harry S. Budow
---------------------------------------
Harry S. Budow, Chief Executive Officer
Attest:
/s/ Danny G. Hair
- ------------------------
Danny G. Hair, Secretary
-8-
<PAGE> 1
EXHIBIT 99.33
AMPHION VENTURES L.P.
FORM OF PROMISSORY NOTE
$_____________________ _________________, 1998
AMPHION VENTURES L.P., a New York limited partnership having its
principal place of business in New York, New York ("Amphion Ventures"), for
value received, hereby promises to pay to the order of AXCESS Inc., its legal
successors and permitted assigns (the "Holder"), on ________________________
(the "Final Maturity Date"), the unpaid principal amount of
_______________________________________ UNITED STATES DOLLARS (U.S.
$__________________), together with interest thereon from the date hereof, at
the rate of ten percent (10.00%) per annum, calculated on the basis of the
number of days elapsed over a 360-day year of twelve 30- day months (the
"Interest Rate"). Interest shall be payable quarterly in arrears, in cash, on
each January 1, April 1, July 1 and October 1 during the term of this Note,
commencing __________, 1998. Each payment received by the Holder hereunder shall
be applied first to the interest accrued on and then to the unpaid principal
amount of this Note.
Payment of principal and interest hereunder shall be made in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts. All such payments
shall be paid by wire transfer of federal funds in accordance with the written
instructions of the Holder or, in the absence of current written instructions,
by check mailed to the Holder at the address last given to Amphion Ventures by
the Holder in writing for such purpose.
This Note may be prepaid in whole or in part at any time at the option
of Amphion Ventures, without premium or penalty, upon not less than two business
days' prior written notice to the Holder.
Except as otherwise expressly provided herein, the Amphion Ventures
hereby waives presentment for payment, demand for payment, notice of nonpayment,
protest and notice of protest.
This Note shall be binding upon Amphion Ventures and its successors and
assigns and shall inure to the benefit of the Holder, its legal successors and
its permitted assigns.
If Amphion Ventures fails to pay any amount of principal or interest
when due, and such due but unpaid amount remains unpaid for five business days
after the Holder makes written demand therefor, the entire unpaid principal of
and accrued interest on this Note shall forthwith become absolutely due and
payable without any further notice, demand, protest or presentment whatsoever,
all of which are hereby expressly waived.
This Note shall be governed by and construed in accordance with the
laws of the State of New York, without reference to its rules as to conflicts of
law. Any judicial proceeding brought against Amphion Ventures to enforce, or
otherwise in connection with, this Note shall be brought in any court of
competent jurisdiction in the City of New York, and, by acceptance of this Note,
the Holder (i) accepts, generally and unconditionally, the exclusive
jurisdiction of such courts and any related appellate court and irrevocably
agrees to be bound by any final judgment rendered thereby in connection with
this Note
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<PAGE> 2
and (ii) irrevocably waives any objection it may now or hereafter have
as to the venue of any such proceeding brought in such a court or that such a
court is an inconvenient forum.
IN WITNESS WHEREOF, Amphion Ventures has caused this Note to be signed
by its duly authorized officer and has caused its corporate seal to be affixed
and attested by its general partner, as of the date first set forth above.
[Corporate Seal] Attested: AMPHION VENTURES L.P.
By: Amphion Partners L.L.C., General Partner
By:
- ------------------------------- ----------------------------------------
Richard C.E. Morgan, a Managing Member
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<PAGE> 1
EXHIBIT 99.34
AXCESS INC.
3208 Commander Drive
Carrollton, Texas 75006
Amphion Ventures L.P. February 26, 1999
c/o Amphion Capital
590 Madison Avenue
32nd Floor
New York, New York 10022
Re: Preferred Stock Purchase Agreement
Ladies and Gentlemen:
On October 21, 1998, Amphion Ventures L.P., a Delaware limited
partnership (the "Purchaser"), committed to provide up to $6,300,000 of equity
financing to AXCESS Inc., a Delaware corporation (the "Company"), in connection
with the Company's 1998 plan of operations and to maintain the Company's
compliance with the net tangible asset requirement of the new Nasdaq listing
requirements (the "Commitment"). This letter sets forth the terms and conditions
on which the Company will issue and sell to Purchaser for an aggregate purchase
price of up to $6,300,000, payable as provided herein, shares of either its
Series G Voting Preferred Stock, Series H Non-Voting Preferred Stock or shares
of any new series of voting preferred stock or non-voting preferred stock of the
Company that may be authorized for issuance as of the date Purchaser advances
funds against the Commitment to the Company (collectively, the "Preferred
Stock"). Purchaser shall designate in writing to the Company what series of
preferred stock of the Company the Purchaser desires to purchase at the time it
advances funds against the Commitment to the Company. Although Amphion agreed to
make the Commitment to be effective as of October 21, 1998 (the "Effective
Date"), this letter sets forth in detail the terms on which the Purchaser agreed
to make the Commitment.
1. Advances; Purchase Price; Effectiveness. The Purchaser hereby agrees
to subscribe for and purchase from the Company, and the Company hereby agrees to
issue and sell to the Purchaser, up to $6,300,000 of shares of Preferred Stock
(the "Shares"). The purchase price for each Share shall be $10,000, payable in
cash. The purchase and sale of Shares hereunder shall be effective as of the
date the Company receives the purchase price for each Share from Purchaser
(subject to the filing of any Certificates of Designation of the Preferred Stock
in the office of the Secretary of State of the State of Delaware (the
"Certificates of Designation"), which filing may occur subsequently to the
Effective Date without effecting the rights and obligations of the parties
hereto).
2. Purchase and Delivery of Shares. Upon its receipt of the purchase
price for each Share, the Company shall issue and sell to Purchaser the number
of Shares, the stated value of which shall be $10,000 per share (the "Original
Preferred Stock Issue Price"). On and as of the Effective Date, the Company
shall execute and deliver to the Purchaser a stock certificate in proper form
representing the Shares.
3. Conversion of Preferred Stock to Voting or Non-Voting Common Stock.
Purchaser hereby agrees that it shall not, without the prior written consent of
the Company, convert any shares of Preferred Stock, other than Series G
Preferred Stock, to shares of either voting or non-voting common stock of the
Company, $0.01 par value per share (the "Common Stock"), as the case may be,
issuable to Purchaser upon its conversion of any Shares until the Company
receives stockholder approval to issue more than twenty
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<PAGE> 2
AXCESS Inc.
February 26, 1999
Page 2
percent (20%) of the Company's outstanding voting or non-voting Common Stock, as
the case may be, at a per share price potentially less than the per share market
price of the Common Stock on the date of issuance to holders of Preferred Stock.
The Company hereby agrees to submit such a proposal to its stockholders for
approval at the Company's 1999 annual meeting of stockholders.
4. Conversion of Non-Voting Common Stock to Voting Common Stock.
Purchaser hereby agrees that it shall not, without the prior written consent of
the Company, which consent will not be unreasonably withheld, convert any shares
of the Company's non-voting Common Stock issuable to Purchaser upon its
conversion of any Shares to voting Common Stock of the Company.
5. Right to Exchange Shares. If the Company consummates an equity
financing with any third party at any time on or before December 31, 1999, which
equity financing raises at least $1,000,000 in cash (a "Qualified Equity
Financing"), the Purchaser will have the non-assignable right, exercisable by
written notice to the Company given at any time within thirty (30) days after
the date of the closing of a Qualified Equity Financing, to exchange the Shares
in whole or in part, for shares (the "Exchange Shares") of a new series of
preferred stock of the Company (the "Exchange Preferred"), on the following
basis:
A. If the securities issued in such Qualified Equity Financing
(the "New Securities") are convertible into voting or non-voting Common
Stock, the Exchange Preferred will be convertible into voting or
non-voting Common Stock, as the case may be, at a conversion price
equal to the lesser of (x) the conversion price then applicable under
the Preferred Stock and (y) the conversion price then applicable under
the New Securities.
B. All other terms of the Exchange Preferred will be
economically equivalent to the terms of the New Securities, determined
as if the New Securities had been issued on the date hereof. The
Exchange Preferred will be on parity with the New Securities for all
purposes, and will vote, if applicable, together with the New
Securities for all purposes, except as otherwise required by law.
C. If the Purchaser exchanges any Shares pursuant to this
paragraph 5, it shall be entitled to any additional rights with respect
to the Exchange Shares (including, without limitation, rights of first
refusal or payment of attorneys' fees) as the purchasers of New
Securities shall be entitled to under the Qualified Equity Financing.
D. The number of Exchange Shares issuable to the Purchaser
pursuant to any exchange of Shares hereunder will be the number of
shares of Exchange Preferred that the Purchaser could have purchased on
the date hereof for a purchase price equal to the aggregate purchase
price hereunder of the Shares to be exchanged therefor, payable in cash
(determined on a basis so that the cash purchase price of the Exchange
Shares and the cash purchase price of the New Securities are
economically equivalent).
E. If the Purchaser exchanges any Shares pursuant to this
paragraph 5, such exchange will not result in an increase in the
conversion price above $4.00 per share (as adjusted for any stock
splits, reverse stock splits, stock dividends or similar events after
the date of the Certificates of Designations).
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<PAGE> 3
AXCESS Inc.
February 26, 1999
Page 3
(f) If the Company does not consummate a Qualified Equity
Financing on or before December 31, 1999, the $4.00 conversion price of
the Preferred Stock shall be reset to not less than the greater of (i)
$1.00 or (ii) one-half of the average closing bid price per share of
the Company's common stock on the Nasdaq SmallCap Market (or if the
Common Stock is not then included on Nasdaq, but is listed on any
national securities exchange, on the principal national securities
exchange on which the Common Stock is then listed) during the last
twenty (20) trading days of 1999 (the "Automatic Reset Right"). If the
automatic reset right is triggered, Purchaser hereby agrees to convert
or exchange a sufficient number of Shares to non-voting Common Stock
such that Purchaser shall not be deemed the beneficial owner of more
than fifty percent (50%) of the Company's voting Common Stock.
6. Mandatory Conversion of Preferred Stock. The Company shall have the
right to cause a mandatory conversion of the Preferred Stock into shares of the
Company's voting or non-voting Common Stock, as the case may be, if the closing
bid price of the Common Stock on the Nasdaq SmallCap Market is at least $10.00
per share for a period of at least ninety (90) consecutive trading days (the
"Mandatory Conversion Price"). The Company may exercise this mandatory
conversion right by providing written notice of the Company's election to
convert the Preferred Stock to Purchaser any time on or before the expiration of
thirty (30) days following the occurrence of the Mandatory Conversion Price.
7. Securities Act Legend; Registration Rights.
7.1 The Shares will not be registered under the Securities Act
of 1933, as amended (the "Securities Act"). Certificates representing the Shares
shall bear a restrictive legend substantially to the effect of the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, OR APPLICABLE STATE SECURITIES LAWS, OR THE
SECURITIES LAWS OF ANY OTHER JURISDICTION. THEY MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
THOSE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION THEREFROM. ADDITIONAL
RESTRICTIONS REGARDING THE TERMS UNDER WHICH THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY BE CONVERTED INTO VOTING OR NON-VOTING COMMON
STOCK OF THE COMPANY ARE SET FORTH IN THAT CERTAIN PREFERRED STOCK
PURCHASE AGREEMENT BY AND BETWEEN THE COMPANY AND THE HOLDER.
7.2 The Purchaser shall have the same registration rights with
regard to any shares of voting or non-voting Common Stock, as the case may be,
issuable upon conversion of the Shares as Amphion Ventures L.P. (formerly
Wolfensohn Associates L.P. was entitled to pursuant to the Stock Purchase
Agreement dated as of January 20, 1994 (the "Prior Agreement")), between the
Company and Amphion Ventures L.P. The Company shall have the same expense,
indemnification and other obligations to the Purchaser with respect to such
registration rights as the Company owed to Amphion Ventures L.P. under the Prior
Agreement. The Company and the Purchaser shall enter into a registration rights
agreement in customary form to confirm the registration rights provided for in
this paragraph, as soon as practicable after the date hereof.
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<PAGE> 4
AXCESS Inc.
February 26, 1999
Page 4
8. Representations and Warranties by the Company. The Company hereby
represents and warrants to the Purchaser as follows:
8.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
the corporate power and authority to execute and deliver this agreement, to
issue the Shares on the basis described herein and otherwise to perform its
obligations under this agreement.
8.2 The execution and delivery by the Company of this
Agreement, the issuance of the Shares, and the performance by the Company of its
obligations hereunder, have been duly authorized by all requisite corporate
action on the part of the Company (other than the filing of any Certificates of
Designation) and will not (i) violate any provision of law, statute, rule or
regulation or any order of any court or other agency of government, (ii)
conflict with or violate the Certificate of Incorporation or By-Laws of the
Company, in each case as amended, or (iii) violate, conflict with or constitute
(with due notice or lapse of time or both) a default under any indenture,
mortgage, lease, license, agreement or other contract or instrument or result in
the creation or imposition of any lien, charge or encumbrance of any nature upon
the properties or assets of the Company or any of its subsidiaries, in each case
if such violation, conflict, default, lien, charge or encumbrance would have a
material adverse effect on the Company.
8.3 This agreement has been duly executed and delivered by the
Company and constitutes the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except to the extent the
enforceability hereof may be limited by applicable bankruptcy, moratorium or
similar laws affecting the rights of creditors generally.
8.4 Based in part upon the representations and warranties of
the Purchaser contained in this agreement, no registration or filing with, or
consent or approval of, or other action by, any federal, state or other
governmental department, commission, board, bureau, agency or instrumentality or
any third party is or will be necessary for the execution and delivery of this
agreement by the Company and the issuance of the Shares hereunder, other than
(x) the filing of any Certificates of Designation and (y) the filing of a notice
of sale on Form D with the Securities and Exchange Commission in accordance with
the rules and regulations thereof under the Securities Act.
8.5 Subject only to the filing of any Certificates of
Designation, the Shares are duly authorized, validly issued, fully paid and
non-assessable shares of Preferred Stock, and are not subject to any preemptive
rights.
8.6 Attached hereto as Exhibit A is a true copy of the
Certificates of Designation covering the Shares to be issued to Purchaser
hereunder. On the Effective Date, the Board of Directors of the Company approved
and adopted resolutions, in the form of the resolutions set forth in Exhibit A,
creating the Preferred Stock and directing the proper officers of the Company to
file the same with the office of the Secretary of State of the State of
Delaware, in accordance with the applicable provisions of the Delaware General
Corporation Law. The Company hereby covenants and agrees, for the benefit of the
Purchaser, that the Company will cause the Certificates of Designation to be
filed with the office of the Secretary of State of the State of Delaware, in
accordance with the applicable provisions of the Delaware General Corporation
Law, within ten (10) days after the date hereof.
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<PAGE> 5
AXCESS Inc.
February 26, 1999
Page 5
9. Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company as follows:
9.1 The Purchaser is acquiring the Shares for its own account,
for investment and not with a view to the distribution thereof within the
meaning of the Securities Act.
9.2 The Purchaser understands that the Shares have not been
registered under the Securities Act, by reason of their issuance by the Company
in transactions exempt from the registration requirements of the Securities Act,
and that the Shares must be held by the Purchaser indefinitely unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration.
9.3 The Purchaser further understands that the exemption from
registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Act depends on the satisfaction of various conditions, and
that, if applicable, Rule 144 may afford the basis for sales only in limited
amounts, after compliance with the holding periods and other provisions thereof.
9.4 The Purchaser understands that its investment hereunder
involves substantial risks and represents and warrants that it has made such
independent examinations and investigations of the Company as it has deemed
necessary in making its investment decision, and the Purchaser further
represents and warrants that it has had sufficient access to the officers,
directors, books and records of the Company as it has deemed necessary to
conduct such examination and investigation and make such investment decision.
9.5 The Purchaser is able to bear the economic risk of the
investment contemplated by this agreement and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the investment contemplated by this agreement.
10. Reaffirmation of Representations and Warranties. The date Shares
are purchased shall constitute a reaffirmation of each and every one of the
representations and warranties of the Company set forth in Section 8 of this
agreement and those of the Purchaser set forth in Section 9 of this agreement as
if made as of each Effective Date, unless otherwise restated or corrected by
either the Purchaser or the Company, as the case may be.
11. Miscellaneous.
11.1 This agreement constitutes our entire agreement with
respect to the subject matter hereof. This agreement may not be modified or
amended or any provision hereof waived except by an instrument in writing signed
by the Company and the Purchaser.
11.2 This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. The rights of the Purchaser hereunder shall be assignable to any holder
of the Shares. Except as provided in the immediately preceding sentence, this
agreement and the rights of the Purchaser hereunder shall not be assignable, and
any purported assignment hereof or thereof shall be void.
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<PAGE> 6
AXCESS Inc.
February 26, 1999
Page 6
11.3 This Agreement may be executed in any number of
counterparts and on separate counterparts, each of which shall be an original
instrument, but all of which together shall constitute a single agreement. One
or more signature pages from any counterpart of this Agreement may be attached
to any other counterpart of this Agreement without in any way changing the
effect thereof. This Agreement shall be effective when executed and delivered by
the Company and the Purchaser.
11.4 All notices, requests, demands, consents, waivers, or
other communications made hereunder to any party or holder of Shares shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by nationally-recognized overnight courier, facsimile or by first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below:
if to the Company, to:
AXCESS Inc.
3208 Commander Drive
Carrollton, TX 75006
Attention: Chief Financial Officer
with a copy to:
Sayles & Lidji, P.C.
4400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Brian M. Lidji, Esq.; and
if to the Purchaser, to the Purchaser at its address
first set forth above,
or to such other address as the party to whom such communication is to be given
may have furnished to the other party in writing in accordance herewith. All
such notices, requests, demands, consents, waivers or other communications shall
be deemed to have been delivered (i) in the case of personal delivery, on the
date of delivery, (ii) if sent by facsimile, on the date sender receives a
confirmation confirming receipt, (iii) if sent by overnight courier, on the next
business day following the date sent and (iv) in the case of mailing, on the
third business day following such mailing.
11.5 All representations, warranties and agreements contained
herein shall survive the execution and delivery of this Agreement and the sale
of the Shares hereunder.
11.6 This agreement, and all rights, obligations and
liabilities hereunder, shall be construed according to the laws of the State of
New York applicable to contracts made and to be performed wholly therein. Any
judicial proceeding brought against the Company to enforce, or otherwise in
connection with, this agreement may be brought in any court of competent
jurisdiction in the City of New York, and, by execution and delivery of this
agreement, the Company (i) accepts, generally and unconditionally, the
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<PAGE> 7
AXCESS Inc.
February 26, 1999
Page 7
nonexclusive jurisdiction of such courts and any related appellate court and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this agreement and (ii) irrevocably waives any objection it may
now or hereafter have as to the venue of any such proceeding brought in such a
court or that such a court is an inconvenient forum.
**Remainder Intentionally Left Blank**
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<PAGE> 8
AXCESS Inc.
February 26, 1999
Page 8
If the foregoing correctly sets forth your understanding of our
agreement, please so indicate by signing and returning to the Company the
enclosed counterpart of this Agreement.
Very truly yours,
AXCESS INC.
By: /s/ Danny G. Hair
----------------------------------------------
Danny G. Hair, Executive Vice President, Chief
Financial Officer and Secretary
The undersigned agrees with and
accepts the foregoing terms and
provisions as of the date first
above written.
AMPHION VENTURES L.P.
By Amphion Partners L.L.C., its general partner
By: /s/ Richard C.E. Morgan
----------------------------------------------
Richard C.E. Morgan, A Managing Member
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