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As filed with the Securities and Exchange Commission on January 12, 1999
REGISTRATION STATEMENT NO. 333-67281
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALPHA-BETA TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Massachusetts 04-2997834
(State of incorporation) (I.R.S. Employer Identification Number)
</TABLE>
THREE BIOTECH PARK
ONE INNOVATION DRIVE
WORCESTER, MASSACHUSETTS 01605
(508) 798-6900
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------------------------
SPIROS JAMAS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ALPHA-BETA TECHNOLOGY, INC.
THREE BIOTECH PARK
ONE INNOVATION DRIVE
WORCESTER, MASSACHUSETTS 01605
(508) 798-6900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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With copies to:
JOHN J. EGAN III, P.C.
GOODWIN, PROCTER & HOAR LLP
Exchange Place
53 State Street
Boston, Massachusetts 02109-2881
(617) 570-1000
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------
Proposed Maximum
Title of Shares Amount to be Proposed Maximum Aggregate Offering Amount of
to be Registered Registered (1) Offering Price Per Share (2) Price Registration Fee (2)
---------------- ----------------- ---------------------------- ------------------ --------------------
<S> <C> <C> <C> <C>
Common Stock, par value 11,047,500 shares $.71875 $7,940,391 $3,300
$.01 per share
("Common Stock")
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The 11,047,500 shares of Common Stock being registered hereunder include
(i) 11,000,000 shares of Common Stock which represents the registrant's
good faith estimate of the maximum number of shares of Common Stock
issuable upon conversion of the 1,500 shares of Series F Convertible
Preferred Stock issued in a private placement transaction on October 21,
1998 and the 1,500 shares of Series F Convertible Preferred Stock
issuable in a private placement transaction upon effectiveness of this
registration statement and the satisfaction of certain other closing
conditions, (ii) 25,000 shares of Common Stock issuable upon the
exercise of certain warrants held by Reedland Capital Partners and World
Capital Funding LLC (together, the "Consultants"), and (iii) 22,500
shares of Common Stock currently held by the Consultants. As of January
7, 1999, the number of shares issuable upon conversion of the Series F
Convertible Preferred Stock is 5,073,927, assuming completion of both
tranches of Series F Preferred Stock as of such date. In accordance with
Rule 416 under the Securities Act of 1933, as amended (the "Act"), this
registration statement also covers such indeterminate number of shares
of Common Stock that may be offered or issued pursuant to terms which
provide for a change in the amount of shares of Common Stock being
offered or issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions.
(2) These figures are estimates made solely for the purpose of calculating
the registration fee in accordance with Rule 457 under the Securities
Act of 1933, as amended. This amendment increases the number of shares
of Common Stock to be registered by 1,544,177 from those referred to in
the original filing at which time the registrant paid a registration fee
of $2,990 (based on a per share price of $1.09375). Based upon the
average of the high and low prices per share of Common Stock reported on
the NASDAQ National Market system on January 7, 1999, the additional fee
paid herewith for adding such 1,544,177 shares is $310.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED __________, 1999
PROSPECTUS
11,047,500 Shares
ALPHA-BETA TECHNOLOGY, INC.
COMMON STOCK
The selling stockholders of Alpha-Beta Technology, Inc. referenced below
are offering to sell up to a maximum of 11,047,500 shares of Alpha-Beta common
stock under this prospectus.
HFTP Investments LLC is offering up to a maximum of 11,000,000 shares of
Alpha-Beta common stock issuable upon its conversion of any of its 3,000 shares
of Alpha-Beta preferred stock and any other shares of common stock that
Alpha-Beta may issue upon or after conversion of the preferred stock as a result
of stock splits and stock dividends. As of January 7, 1999, 5,073,927 shares of
Alpha-Beta common stock were issuable upon conversion of the preferred stock.
Reedland Capital Partners and World Capital Funding LLC are offering up
to an aggregate of 47,500 shares of Alpha-Beta common stock under this
prospectus.
Alpha-Beta common stock is quoted on the Nasdaq National Market under
the trading symbol "ABTI." The last reported sale price of the common stock on
the Nasdaq National Market on January 11, 1999 was $.71875 per share.
The selling stockholders may sell their shares of common stock in any
manner described in the "Plan of Distribution" section of this prospectus
beginning on page 11.
INVESTING IN ALPHA-BETA COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _______, 1999
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RISK FACTORS
An investment in Alpha-Beta common stock involves various risks. This
prospectus contains forward-looking statements within the meaning of the federal
securities laws. You are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties. Actual
events or results may differ materially from those discussed in the
forward-looking statements as a result of various factors, including the factors
referenced in Alpha-Beta's documents which are filed with the SEC and which are
incorporated by reference herein. In deciding whether or not to invest in
Alpha-Beta common stock, you should consider the following risk factors:
ALPHA-BETA IS UNCERTAIN OF ITS ABILITY TO OBTAIN FINANCING NECESSARY TO
CONTINUE ITS OPERATIONS
Alpha-Beta cannot assure you that it will be able to obtain financing
necessary to continue its operations. Based upon its current rate of
expenditures, Alpha-Beta expects that its current funds and the funds to be
received from the sale of the second tranche of Alpha-Beta preferred stock are
sufficient to meet its operating expenses and capital requirements through
January 1999. Alpha-Beta currently does not have any committed source of capital
to fund its business after January 1999.
Alpha-Beta needs to raise substantial additional capital to fund its
operations, including the completion of the Phase III clinical trial of its lead
product, Betafectin(R). Alpha-Beta anticipates that it needs to raise at least
$10 million to continue its operations through the end of 1999. Alpha-Beta is
seeking such additional funding through public or private equity or debt
financings, licensing, marketing and distribution arrangements with
pharmaceutical or biotechnology companies and from other sources.
In the short-term, Alpha-Beta's ability to raise additional funds may
well be determined by the results of the interim analysis to be released in
early 1999 in connection with the Phase III clinical trial of Betafectin(R).
Additionally, in the long-term, Alpha-Beta's ability to raise additional funds
or to enter into collaborative or other arrangements may depend upon a number of
factors including the following:
* the final results of Alpha-Beta's clinical development programs;
* discussions with the FDA; and
* the overall market for biotechnology stocks.
Alpha-Beta may not be able to obtain additional financing on acceptable
terms, if at all. If adequate funds are not available, Alpha-Beta's business
will be materially adversely affected as Alpha-Beta will have to reduce or
eliminate certain areas of research, product development, manufacturing and
marketing activity, or otherwise severely modify its business strategy.
Ultimately, if Alpha-Beta does not obtain additional financing on acceptable
terms, it may need to modify its business strategy of remaining independent. At
such time, Alpha-Beta will consider various strategic alternatives such as the
sale of rights to certain technologies, candidate drugs, potential markets and
other assets, as well as the possibility of merging with another company.
ALPHA-BETA IS UNCERTAIN OF ITS FUTURE PROFITABILITY
Alpha-Beta cannot assure you that it will be able to achieve
profitability at all or on a sustained basis. Alpha-Beta has been operating at a
loss since its inception in March 1988. As of September 30, 1998, Alpha-Beta had
accumulated net losses of approximately $157 million. Alpha-Beta will continue
to incur significant costs in connection with the establishment and development
of its research and development programs and its manufacturing, sales,
marketing, quality control, regulatory and administrative capabilities. As a
result, Alpha-Beta expects to continue to incur substantial operating losses for
the next several years. Alpha-Beta cannot predict the size of such losses. To
achieve profitability Alpha-Beta must successfully complete development of its
products, obtain regulatory approvals, develop its manufacturing capabilities
and establish sales and marketing capabilities.
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ALPHA-BETA MAY BE UNABLE TO OBTAIN REGULATORY APPROVAL FOR ITS PRODUCTS,
INCLUDING ITS LEAD PRODUCT, BETAFECTIN(R)
Alpha-Beta cannot assure you that it will obtain regulatory approval for
its products, including its lead product Betafectin(R), within a reasonable
period of time, if at all. None of Alpha-Beta's products are expected to be
commercially available prior to late-1999 at the earliest.
Numerous governmental authorities in the United States and other
countries including the FDA regulate Alpha-Beta's research, development and
clinical programs and manufacturing operations. All of Alpha-Beta's products
require governmental approvals for commercialization which have not yet been
obtained. The regulatory process includes rigorous preclinical, clinical and
post-clinical testing of Alpha-Beta's products to establish their safety and
effectiveness. As a result, the approval process requires many years to complete
and the expenditure of substantial resources. Problems such as toxicity or
adverse event reporting during clinical trials may require Alpha-Beta to
terminate the trials at any time.
Data obtained from preclinical and clinical activities are susceptible
to varying interpretations which could delay, limit or prevent regulatory
approval. In addition, changes in regulatory policies for drug approval during
Alpha-Beta's product development and regulatory review may result in delays or
rejection.
Alpha-Beta's lead product, Betafectin(R), is currently in Phase III
clinical trial for the prevention of serious post-operative infections in upper
gastrointestinal surgery patients. The study is expected to be completed by the
end of 1999 and will include an interim analysis in early 1999. If the clinical
trial for Betafectin(R) is successful, Alpha-Beta will file with the FDA for
approval to market Betafectin(R). If it is not successful, Alpha-Beta will
reduce or eliminate certain areas of research, product development,
manufacturing and marketing activity, and it may need to modify its business
strategy of remaining independent and consider various strategic alternatives
such as the sale of rights to certain technologies, candidate drugs, potential
markets and other assets, as well as the possibility of merging with another
company.
Even if regulatory approval is obtained, Alpha-Beta will still be
subject to continual regulatory review and periodic inspections. If a regulatory
authority discovers previously unknown problems, it may impose further
restrictions, including requiring the removal of a product from the market.
If Alpha-Beta fails to comply with applicable regulatory requirements,
it may be subject to fines, suspensions of regulatory approvals, product
recalls, operating restrictions and criminal prosecution.
ALPHA-BETA MAY BE UNABLE TO SUCCESSFULLY MARKET AND SELL ITS PRODUCTS
Alpha-Beta cannot assure you that it will be able to successfully market
and sell its products if and when regulatory approval is obtained. To be
successful, Alpha-Beta will have to manufacture its products in commercial
quantities, within regulatory requirements and at competitive costs. Alpha-Beta
currently has no experience in marketing, sales or distribution of commercial
products. To market any of its products, Alpha-Beta will need to develop a
substantial marketing and sales force with technical expertise and the
capability to support distribution. Alpha-Beta may not be able to establish the
necessary sales and distribution capabilities or successfully gain market
acceptance for its products. Alpha-Beta is currently seeking a strategic partner
with the necessary sales and distribution capabilities and expertise to assist
in the commercialization of Betafectin(R). Alpha-Beta may not be able to enter
into such a strategic relationship without undue delays or expenditures.
In June 1994, Alpha-Beta completed construction of a commercial-scale
manufacturing facility in Smithfield, Rhode Island. This facility is presently
being operated to manufacture clinical quantities of Betafectin(R). While
Alpha-Beta believes this facility will have the capacity to manufacture
sufficient quantities of Betafectin(R) for clinical trials and the commercial
introduction of the product, Alpha-Beta cannot assure you that the Betafectin(R)
plant will have sufficient capacity to satisfy Alpha-Beta's product requirements
or that Alpha-Beta will be able to manufacture Betafectin(R) at acceptable
costs.
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ALPHA-BETA FACES INTENSE INDUSTRY COMPETITION
Alpha-Beta cannot assure you that its business will not fail as a result
of the intense competition it faces from pharmaceutical and biotechnology
companies, universities and other research institutions. To be successful,
Alpha-Beta must develop and maintain a competitive position in the development
of products and technologies in its area of focus. Alpha-Beta's competitors may
succeed in developing technologies and products that are more effective than any
which have been or are being developed by Alpha-Beta or that render Alpha-Beta's
technologies or products obsolete or noncompetitive. Moreover, Alpha-Beta's
competitors may obtain regulatory approval for the commercialization of their
products more rapidly or effectively than Alpha-Beta. Finally, many of
Alpha-Beta's competitors have substantially greater research and development
capabilities, clinical, manufacturing, regulatory and marketing experience and
financial and managerial resources than Alpha-Beta has.
ALPHA-BETA MAY NOT BE ABLE TO HIRE AND RETAIN KEY PERSONNEL
Alpha-Beta cannot assure you that it will be successful in hiring or
retaining the personnel it requires for growth and development. Alpha-Beta is
highly dependent on the members of its management and scientific staff, the loss
of some of whom could have a material adverse effect on Alpha-Beta. Alpha-Beta
also depends on its collaborators, each of which have commitments that may limit
their availability to Alpha-Beta. In addition, Alpha-Beta believes that its
future success will depend in large part upon its ability to attract and retain
highly skilled scientific, managerial and marketing personnel, particularly as
Alpha-Beta expands its activities in clinical trials, the regulatory approval
process, sales and manufacturing. Alpha-Beta faces significant competition for
such personnel from other companies, research and academic institutions,
government entities and other organizations. The failure to hire and retain key
personnel could materially and adversely affect Alpha-Beta's prospects.
ALPHA-BETA MAY BE UNABLE TO MAKE PAYMENTS ON ITS LOAN FROM RIPA
Alpha-Beta cannot assure you that it will be able to continue to make
payments on its loan from the Rhode Island Port Authority and Economic
Development Corporation. In February 1993, Alpha-Beta completed a $30 million
debt financing through RIPA to finance, in large part, the costs of Alpha-Beta's
Betafectin(R) plant. Because this facility was constructed prior to the issuance
of final FDA approval for the commercial sale of Betafectin(R), Alpha-Beta is
obligated to repay the RIPA loan regardless of whether Betafectin(R) is approved
for commercial sales. Alpha-Beta is required to make payments of approximately
$300,000 per month to RIPA over the 20 year term of the RIPA loan. Alpha-Beta's
obligation to repay the loan is subject to acceleration if Alpha-Beta fails to
make any monthly debt service payments, or if certain other events of default
occur. Alpha-Beta may also be required to repay the loan on an accelerated basis
over five years if the enabling legislation under which RIPA issued the bonds
used to fund the loan to Alpha-Beta is eliminated or if the state of Rhode
Island or RIPA is subject to any bankruptcy proceeding. The terms of the RIPA
loan are subject to adjustment in connection with a possible refinancing of the
RIPA bonds by RIPA on December 1, 1999. The financial obligations incurred by
Alpha-Beta in connection with the RIPA debt refinancing could have a material
impact on the ability of Alpha-Beta to conduct its operations.
ALPHA-BETA DEPENDS ON PATENTS AND PROPRIETARY RIGHTS THAT MAY FAIL TO PROTECT
ITS BUSINESS
Alpha-Beta's success depends, in large part, upon its ability to obtain
patent protection for its products and manufacturing processes, preserve its
trade secrets and operate without infringing the proprietary rights of third
parties.
In addition to Alpha-Beta's own patents and patent applications, the
Massachusetts Institute of Technology and The Brigham and Women's Hospital have
exclusively licensed rights in certain patents and patent applications to
Alpha-Beta. Alpha-Beta's future performance is partly dependent upon its ability
to attain certain targets and make specified royalty payments required by the
governing license agreements. Alpha-Beta cannot assure you that it will satisfy
any of these requirements.
Alpha-Beta anticipates seeking additional patents in the future as it
continues to conduct research. However, the patent position of biotechnology and
pharmaceutical firms is often highly uncertain and usually
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involves complex legal and factual questions. In addition, the United States
Patent and Trademark Office is substantially backlogged with biotechnology
patent applications, and no consistent policy has emerged regarding the breadth
of claims covered in biotechnology patents. Accordingly, Alpha-Beta cannot
assure you that patent applications relating to its products or technology will
result in patents being issued or that, if issued, such patents will afford
adequate protection to Alpha-Beta or not be challenged, invalidated or
infringed. Furthermore, Alpha-Beta cannot assure you that others will not
independently develop similar products and processes, duplicate any of
Alpha-Beta's products or design around any of Alpha-Beta's patents.
Alpha-Beta may incur substantial costs in defending itself in suits
brought against it or in suits in which Alpha-Beta may assert its patents
against others. If the outcome of any such litigation is adverse to Alpha-Beta,
Alpha-Beta's business could be adversely affected. To determine the priority of
inventions, Alpha-Beta may also have to participate in interference proceedings
declared by the United States Patent and Trademark Office. Such proceedings
could result in substantial costs to Alpha-Beta.
In addition, Alpha-Beta may be required to obtain licenses to patents or
other proprietary rights of third parties. Alpha-Beta cannot assure you that any
licenses required under any such patents or proprietary rights would be made
available on acceptable terms, if at all. If Alpha-Beta does not obtain such
licenses, it could encounter delays in product market introductions while it
attempts to design around such patents or other rights, or be unable to develop,
manufacture or sell products.
In addition to its patents and patent applications, Alpha-Beta also has
proprietary technology which is not patented or patentable. Alpha-Beta may seek
to protect such technology in part with confidentiality agreements and, if
applicable, inventors' rights agreements with its collaborators, advisors,
employees and consultants. Alpha-Beta cannot assure you that these agreements
will not be breached, that Alpha-Beta will have adequate remedies for any
breach, or that Alpha-Beta's trade secrets will not otherwise be disclosed to,
or discovered by, competitors. Moreover, Alpha-Beta conducts a significant
amount of research through academic advisors and collaborators who are
prohibited from entering into confidentiality or inventors' rights agreements by
their academic institutions.
ALPHA-BETA MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS ARISING OUT OF THE
MANUFACTURE, TESTING AND SALE OF ITS PRODUCTS AND MAY NOT BE ABLE TO OBTAIN OR
MAINTAIN ADEQUATE INSURANCE TO COVER SUCH CLAIMS
Alpha-Beta cannot assure you that substantial product liability claims
will not be asserted against it arising out of the manufacture, testing and sale
of its products. The testing, marketing and sale of human therapeutic products
involve an inherent risk of allegations of product liability. While Alpha-Beta
has clinical trials liability insurance, it does not have product liability
insurance coverage for the commercial sale of Betafectin(R). Alpha-Beta cannot
assure you that it will be able to maintain clinical trials liability insurance
on acceptable terms or that such insurance will provide adequate coverage
against potential liabilities. Alpha-Beta will seek to obtain product liability
insurance if and when its products are commercialized. However, Alpha-Beta
cannot assure you that adequate insurance coverage will be available at
acceptable costs, if at all, or that a product liability claim would not
materially adversely affect the business or financial condition of Alpha-Beta.
UNCERTAIN PHARMACEUTICAL PRICING ENVIRONMENT MAY IMPACT ALPHA-BETA'S BUSINESS
Alpha-Beta's ability to commercialize any of its products depends on the
extent to which reimbursements to patients for the cost of such products will be
available from government health administration authorities, private health
insurers and other organizations. Third-party payors are increasingly
challenging the price and cost-effectiveness of medical products and services.
In addition, significant uncertainty exists as to the reimbursement status of
newly approved health care products. Alpha-Beta cannot assure you that its
proposed products will be considered cost effective or that adequate third-party
reimbursement will be available to enable Alpha-Beta to maintain price levels
sufficient to realize an appropriate return on its investment in product
development. Legislation and regulations affecting the pricing of
pharmaceuticals may change before any of Alpha-Beta's proposed products are
approved for commercialization. Adoption of such legislation could further limit
reimbursement for medical products and services.
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THE MARKET PRICE OF ALPHA-BETA COMMON STOCK HAS STEADILY DECREASED IN RECENT
YEARS
The market price for Alpha-Beta common stock has steadily decreased in
recent years as a result, at least in part, of the results of its previous
clinical trials. Alpha-Beta cannot assure you that the market price of
Alpha-Beta common stock will not continue to decrease in the future. The
following factors may have a significant effect on the market price of
Alpha-Beta common stock:
* disclosure of interim and final results of clinical testing or
regulatory proceedings;
* announcements of technological innovations or new commercial
products by Alpha-Beta or its competitors;
* governmental regulation and approvals;
* developments in patent or other proprietary rights;
* public concern as to the safety of products developed by Alpha-Beta;
and
* future sales of Alpha-Beta common stock in the public market by
existing stockholders.
ALPHA-BETA COMMON STOCK MAY BE DELISTED FROM THE NASDAQ NATIONAL MARKET
Alpha-Beta cannot assure that it will be able to satisfy the
requirements of the Nasdaq Stock Market for continued listing of its common
stock on the Nasdaq National Market. The rules of the Nasdaq Stock Market
require that companies listed on the Nasdaq National Market satisfy certain
requirements for listing. Alpha-Beta currently does not satisfy Nasdaq=s $1
minimum bid price requirement and its $4 million minimum net tangible asset
requirement.
Alpha-Beta has received a letter from Nasdaq regarding the continued
listing of Alpha-Beta common stock on the Nasdaq National Market and has filed a
plan to achieve compliance with Nasdaq.
If Nasdaq delists the common stock from the National Market, the ability
of stockholders of Alpha-Beta to buy and sell shares of Alpha-Beta common stock
may be materially impaired. In addition, the continued delisting of Alpha-Beta
common stock could adversely affect Alpha-Beta's ability to enter into future
equity financing transactions.
ALPHA-BETA MAY BE REQUIRED TO REDEEM THE ALPHA-BETA PREFERRED STOCK AT A PREMIUM
IF ALPHA-BETA COMMON STOCK IS DELISTED FROM THE NASDAQ NATIONAL MARKET.
If the common stock is delisted from the Nasdaq National Market, the
holders of the Alpha-Beta preferred stock are entitled to have each of their
outstanding shares of preferred stock bought back by Alpha-Beta for an amount
equal to 1.30 multiplied by the purchase price per share of preferred stock
($1,000) plus interest at the rate of 6% per annum. In addition, instead of
requiring a buy-back, the holders of the preferred stock may elect to have the
conversion rate for the preferred stock adjusted which would result in the
preferred stock being convertible into more shares of Alpha-Beta common stock.
At this time, Alpha-Beta does not have adequate cash resources available to pay
the applicable repurchase price if the holders of the preferred stock elect a
repurchase and does not have a plan in place to fund such repurchase. If the
holders of the preferred stock elect to adjust the conversion rate upon
delisting, increased dilution to Alpha-Beta's existing stockholders would result
upon conversion of the Alpha-Beta preferred stock.
HFTP INVESTMENTS MAY NOT BE OBLIGATED TO PURCHASE THE SECOND TRANCHE OF
ALPHA-BETA PREFERRED STOCK IF ALPHA-BETA COMMON STOCK IS DELISTED FROM THE
NASDAQ NATIONAL MARKET.
The obligation of HFTP Investments to purchase the second tranche of
preferred stock is contingent upon Alpha-Beta's common stock not having been
suspended by the Nasdaq National Market or the SEC prior to the closing of the
second tranche of preferred stock and Alpha-Beta having not been notified of any
pending
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or threatened proceeding or other action to delist or suspend the common stock
prior to such time. Alpha-Beta believes that (i) the correspondence received
from Nasdaq regarding the continued listing status of the common stock does not
constitute a threatened proceeding or action to delist or suspend the common
stock, and (ii) absent any further action on the part of Nasdaq, HFTP
Investments is still obligated to purchase the second tranche of preferred
stock. However, if HFTP Investments does not purchase the second tranche of
preferred stock, Alpha-Beta will need to immediately locate other financing.
HOLDERS OF ALPHA-BETA COMMON STOCK WILL EXPERIENCE SUBSTANTIAL DILUTION UPON
CONVERSION OF THE ALPHA-BETA PREFERRED STOCK
Holders of Alpha-Beta common stock will experience substantial dilution
upon conversion of the Alpha-Beta preferred stock. As of January 7, 1999,
5,073,927 shares of Alpha-Beta common stock were issuable upon conversion of the
Alpha-Beta preferred stock, assuming completion of the second tranche of
preferred stock as of such date. If HFTP Investments converted all of its shares
of preferred stock as of such date, the total number of shares of Alpha-Beta
common stock outstanding would increase by 24.6%. If the 11,000,000 shares of
Alpha-Beta common stock being registered on behalf of HFTP Investments are
issued upon conversion of the preferred stock, the total number of shares of
common stock outstanding as of January 7, 1999 would increase by 53.3%. The
existence of the preferred stock may adversely affect the terms under which
Alpha-Beta could obtain additional equity capital. The conversion of this
preferred stock may materially adversely affect the market price of the common
stock.
ALPHA-BETA MAY BECOME SUBJECT TO RULES RELATING TO LOW-PRICED OR PENNY STOCK
If, for any reason, Alpha-Beta's common stock does not remain accepted
for listing on the Nasdaq National Market, Alpha-Beta expects that its common
stock would be traded in the over-the-counter markets through the "pink sheets"
or on the NASD's OTC Bulletin Board. In addition, in the event the Alpha-Beta
common stock is delisted from the Nasdaq National Market, the common stock would
be covered by a SEC rule that imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse). For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and receive the purchaser=s written
agreement to the transaction prior to the sale. Consequently, the rule may
affect the ability of broker-dealers to sell Alpha-Beta common stock and also
may affect the ability of holders of Alpha-Beta common stock to resell their
shares of common stock.
ANTI-TAKEOVER PROVISIONS COULD IMPACT MARKET PRICE OF ALPHA-BETA COMMON STOCK
Alpha-Beta has adopted certain anti-takeover measures discussed below
which are designed to prevent or discourage a hostile acquiror from gaining
control of the company. These provisions may have the effect of delaying,
deterring or preventing a change of control of the company, may discourage bids
for Alpha-Beta common stock at a premium over market prices and may adversely
affect the market price and rights of the holders of common stock.
* Alpha-Beta's Board of Directors has the authority, without further
action by the holders of Alpha-Beta common stock, to issue
additional shares of preferred stock and to set the rights of such
preferred stock. As a result, the Board of Directors may issue
shares of preferred stock with favorable terms to a
management-friendly investor in order to discourage a potential
acquiror from gaining control of the company.
* Alpha-Beta has a adopted a shareholder rights plan which operates to
cause substantial dilution to a potential acquiror upon the
consummation of certain transactions if such acquiror does not first
negotiate with the Board of Directors.
* Alpha-Beta has adopted certain by-law provisions which restrict the
ability of a potential acquiror, and other stockholders, to remove
directors or call a special meeting of stockholders.
7
<PAGE> 10
In addition, Alpha-Beta is subject to Chapter 110F of the Massachusetts
Corporation Law which prohibits Alpha-Beta from engaging in certain transactions
with stockholders owning in excess of 5% of the outstanding Alpha-Beta common
stock (an "Interested Stockholder") for a period of three years following the
date the stockholder became an Interested Stockholder, unless the transaction is
approved in a prescribed manner.
THE YEAR 2000 ISSUES COULD CAUSE INTERRUPTION OF ALPHA-BETA'S BUSINESS
Alpha-Beta cannot assure you that its business will not be interrupted
or impaired as a result of complications which may arise because of the
inability of computer systems and software to function properly with respect to
dates in the year 2000 and thereafter. Accordingly, Alpha-Beta has undertaken an
assessment of the year 2000 complications with respect to its information and
non-information systems. Alpha-Beta anticipates that the total costs to remedy
year 2000 issues will be approximately $300,000 ($250,000 for information
systems and $50,000 for non-information systems), which includes approximately
$100,000 in accelerated replacement costs for technology which Alpha-Beta would
have otherwise replaced within two years of the year 2000.
Alpha-Beta has also begun to assess the year 2000 risks of third parties
with whom the Company has a material relationship. These material third parties
include clinical research organizations, consultants and statisticians involved
in the Company"S current Phase III clinical trial of Betafectin(R). Because
Alpha-Beta expects that its clinical trial of Betafectin(R) will be completed
prior to the year 2000, it does not believe that the potential risks of these
third parties will have a material effect on its business. However, risks
relating to the year 2000 could impact clinical programs, if any, existing at
such time.
Alpha-Beta cannot assure you that its or its material third parties year
2000 conversion will be completed by such time. Alpha-Beta believes that in the
event of its most reasonably likely worst case scenario, Alpha-Beta will
experience slower production runs of Betafectin(R).
THE COMPANY
Alpha-Beta is a Massachusetts corporation with its principal executive
offices at Three Biotech Park, One Innovation Drive, Worcester, Massachusetts
01605. Its telephone number is (508) 798-6900.
USE OF PROCEEDS
Alpha-Beta will not receive any proceeds from the sale of the Alpha-Beta
common stock under this prospectus.
MATERIAL TERMS OF THE HFTP INVESTMENTS TRANSACTION
ISSUANCE OF THE ALPHA-BETA PREFERRED STOCK
On October 21, 1998, Alpha-Beta entered into a securities purchase
agreement with HFTP Investments, pursuant to which the HFTP Investments (i)
purchased, on October 21, 1998, 1,500 shares of Alpha-Beta preferred stock in a
private placement transaction, and (ii) is obligated to purchase an additional
1,500 shares of preferred stock in a private placement transaction upon
effectiveness of the registration statement relating to this prospectus and the
satisfaction of certain other conditions which have been previously satisfied.
The obligation of HFTP Investments to purchase the second tranche of
preferred stock is contingent upon Alpha-Beta's common stock not having been
suspended by the Nasdaq National Market or the SEC prior to the closing of the
second tranche of preferred stock and Alpha-Beta having not been
notified of any pending or threatened proceeding or other action to delist or
suspend the common stock prior to such time.
The purchase price for both tranches of the Alpha-Beta Preferred Stock
is $1,000 per share, or $1,500,000 for the first tranche and $1,500,000 for the
second tranche.
8
<PAGE> 11
Alpha-Beta will use the net proceeds from the sale of the preferred
stock to partially fund its ongoing Phase III clinical trial of Betafectin(R)
for the prevention of serious post-operative infections, as well as its novel
antifungal research program.
In connection with the foregoing transaction, Alpha-Beta issued Reedland
Capital and World Capital an aggregate of 22,500 shares of Alpha-Beta common
stock and warrants exercisable for 25,000 shares of common stock as partial
consideration for their consulting services.
TERMS OF THE ALPHA-BETA PREFERRED STOCK
The rights of the Alpha-Beta preferred stock are set forth in the
Certificate of Vote of Directors filed with the Secretary of State of
Massachusetts on October 21, 1998 (the "Certificate of Designations").
Subject to certain anti-dilution provisions, the preferred stock is
convertible into shares of Alpha-Beta common stock pursuant to a formula (the
"Conversion Rate") whereby the purchase price of the shares of preferred stock
to be converted (plus interest at the rate of 6% per annum) is divided by a
conversion price equal to the lower of a cap and a price equal to a 15% discount
to the average closing price of the Alpha-Beta common stock for the five trading
days immediately preceding the date of conversion. Initially, the cap equals
$1.50. Upon issuance of the second tranche of preferred stock, the cap will be
reset at approximately $1.57. The Conversion Rate was $.9244 on October 21, 1998
and $.5950 on January 7, 1999. As an example of the application of the
Conversion Rate, 3,245,436 shares and 5,073,927 shares of common stock were
issuable upon conversion of the preferred stock on October 21, 1998 and January
7, 1999, respectively, assuming completion of both tranches of preferred stock
as of such dates. The preferred stock is convertible for a period of four years
commencing on the date of issuance and is subject to mandatory conversion upon
expiration of such four year period.
The Certificate of Designations prohibits HFTP Investments from
converting any shares of the Alpha-Beta preferred stock to the extent such
conversion would result in HFTP Investments beneficially owning in excess of
4.99% of the outstanding shares of Alpha-Beta common stock following such
conversion.
Upon the occurrence of any of the following events, HFTP Investments may
require Alpha-Beta to buy back the outstanding shares of Alpha-Beta preferred
stock at a premium equal to at least 130% of the original purchase price per
share of preferred stock repurchased (the "Buy-back Premium"):
* the merger or consolidation of the Alpha-Beta into another entity;
* the sale of all or substantially all of the assets of Alpha-Beta;
* the acceptance of a tender offer or exchange offer by the holders of
more than 40% of the outstanding shares of Alpha-Beta common stock;
* the failure of the Alpha-Beta to obtain the effectiveness of the
resale registration statement;
* the suspension of sales under the resale registration statement;
* the suspension of trading in Alpha-Beta common stock on the Nasdaq
National Market; or
* the failure of Alpha-Beta to convert shares of the Alpha-Beta
preferred stock as required.
In the event of any liquidation, dissolution or winding up of
Alpha-Beta, the holders of the Alpha-Beta preferred stock are entitled to
receive cash, before any amount is paid to the holders of any other equity
securities of Alpha-Beta, in an amount per share of preferred stock outstanding
equal to the purchase price for such share of preferred stock ($1,000) plus
interest at the rate of 6% per annum. If the amounts available for distribution
are insufficient to pay the full amount due to the holders of the preferred
stock, Alpha-Beta shall distribute the available funds to such persons pro rata.
9
<PAGE> 12
The holders of the Alpha-Beta preferred stock have no voting rights
except as required by law or as specified in the Certificate of Designations.
Pursuant to the Certificate of Designations, the affirmative vote of the holders
of two-thirds of the outstanding shares of Alpha-Beta preferred stock is
required for (i) any authorization or issuance of securities senior or equal to
the preferred stock, (ii) any amendment to the Certificate of Designations or
Alpha-Beta's Restated Articles of Organization which would change or repeal any
of the rights of the preferred stock, (iii) any amendment to Alpha-Beta's
Restated Articles of Organization or By-Laws which would impair the rights of
the holders of the Alpha-Beta preferred stock relative to the holders of any
other securities of Alpha-Beta, (iv) any issuance of shares of Alpha-Beta
preferred stock other than pursuant to the securities purchase agreement, and
(v) any redemption or declaration or payment of a dividend with respect to the
Alpha-Beta common stock.
REGISTRATION OF CONVERSION SHARES
Pursuant to the registration rights agreement between Alpha-Beta and
HFTP Investments, Alpha-Beta is required to register a number of shares of
common stock equal to at least 2.00 times the number of common stock issuable
upon conversion of the preferred stock. The 11,047,500 shares being registered
hereunder represents Alpha-Beta's good faith estimate as to the maximum number
of shares which may be offered by the selling stockholders. Alpha-Beta is
required to maintain the effectiveness of such registration until the earlier of
the sale of all of the shares of common stock issuable upon conversion of the
preferred stock under the resale registration statement or the saleability of
such shares pursuant to Rule 144(k) of the Securities Act. If Alpha-Beta fails
to cause or maintain such effectiveness, it may be required to pay penalties per
share of preferred stock outstanding equal to $15 plus $5 times the number of
days the registration statement is not effective (i.e., $45,000 plus $15,000 per
day assuming completion of the second tranche of preferred stock).
SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE
NUMBER OF SHARES OF COMMON NUMBER OF SHARES OF COMMON STOCK OWNERSHIP
NAME OF SELLING STOCK BENEFICIALLY OWNED AS COMMON STOCK OFFERED BENEFICIALLY OWNED AFTER
STOCKHOLDER OF JANUARY 7, 1999(1) HEREBY AFTER OFFERING (8) OFFERING
--------------- --------------------------- --------------------- -------------------- ----------
<S> <C> <C> <C> <C>
HFTP INVESTMENTS
LLC 5,073,927(2) 11,000,000(5) 0 *(9)
REEDLAND CAPITAL
PARTNERS 23,750(3) 23,750(6) 0 *(10)
WORLD CAPITAL
FUNDING LLC 23,750(4) 23,750(7) 0 *(11)
</TABLE>
* LESS THAN ONE PERCENT.
- ------------------------
(1) Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to
securities and includes any securities which the person has the right to
acquire within 60 days of January 7, 1999 through the conversion or
exercise of any security or other right.
(2) Beneficial ownership is determined as of January 7, 1999, is based upon a
conversion price of the Alpha-Beta preferred stock as of such date and
assumes completion of the second tranche of preferred stock on such date.
(3) Beneficial ownership is determined as of January 7, 1999 and represents
11,250 shares of Alpha-Beta common stock held by Reedland Capital and
warrants exercisable for 12,500 shares of Alpha-Beta common stock held by
Reedland Capital.
10
<PAGE> 13
(4) Beneficial ownership is determined as of January 7, 1999 and represents
11,250 shares of Alpha-Beta common stock held by World Capital and warrants
exercisable for 12,500 shares of Alpha-Beta common stock held by World
Capital.
(5) Represents the Company's good faith estimate of the maximum number of
shares of Alpha-Beta common stock which may be issuable upon conversion of
the preferred stock. The number of shares being offered by HFTP
Investments, in accordance with Rule 416 under the Securities Act, also
includes such presently indeterminate number of additional shares as may be
issuable upon conversion of the preferred stock, based upon stock splits,
stock dividends or similar transactions.
(6) Represents 11,250 shares of Alpha-Beta common stock held by Reedland
Capital and warrants exercisable for 12,500 shares of Alpha-Beta common
stock held by Reedland Capital.
(7) Represents 11,250 shares of Alpha-Beta common stock held by World Capital
and warrants exercisable for 12,500 shares of Alpha-Beta common stock held
by World Capital.
(8) Gives effect to the conversion or exercise (as applicable) of all of the
shares of Alpha-Beta preferred stock and all of the warrants held by
Reedland Capital and World Capital and sale of the shares of Alpha-Beta
common stock upon such conversion or exercise.
(9) Promethean Investment Group L.L.C. is the investment manager of HFTP
Investments and consequently has voting control and investment discretion
over securities held by HFTP Investments. Mr. James F. O'Brien, Jr. is the
Chief Executive Officer of Promethean Investment Group, L.L.C. Promethean
Investment Group and Mr. O'Brien disclaim beneficial ownership of the
shares of Alpha-Beta common stock beneficial owned by HFTP Investments.
(10) Robert Schacter is the General Partner of Reedland Capital and consequently
has voting control and investment discretion over the securities held by
Reedland Capital. Mr. Schacter disclaims beneficial ownership of the shares
of Alpha-Beta common stock owned by Reedland Capital.
(11) Keither Mazer is the Managing Member of World Capital and consequently has
voting control and investment authority over the securities held by World
Capital. Mr. Mazer disclaims beneficial ownership of the shares of
Alpha-Beta common stock owned by World Capital.
PLAN OF DISTRIBUTION
The shares of Alpha-Beta common stock offered by this prospectus (the
"Shares") are being offered on behalf of the selling stockholders. Such Shares
may be sold or distributed from time to time by the selling stockholders, or by
donees or transferees of, or other successors in interest to, the selling
stockholders, directly to one or more purchasers or through brokers, dealers or
underwriters who may act solely as agents or may acquire such Shares as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices, or at fixed prices,
which may be changed. The sale of the Shares offered hereby may be effected in
one or more of the following methods: (i) ordinary brokers' transactions; (ii)
transactions involving cross or block trades or otherwise on the Nasdaq National
Market; (iii) purchases by brokers, dealers or underwriters as principal and
resale by such purchasers for their own accounts pursuant to this prospectus;
(iv) "at the market" to or through market makers or into an existing market for
Alpha-Beta common stock; (v) in other ways not involving market makers or
established trading markets, including direct sales to purchasers or sales
effected through agents; (vi) through transactions in options, swaps or other
derivatives (whether exchange-listed or otherwise); (vii) in privately
negotiated transactions; (viii) to cover short sales; or (ix) any combination of
the foregoing.
From time to time, one or more of the selling stockholders may pledge,
hypothecate or grant a security interest in some or all of the Shares owned by
them, and the pledgees, secured parties or persons to whom such Shares have been
hypothecated shall, upon foreclosure in the event of default, be deemed to be
selling stockholders hereunder. The number of Shares beneficially owned by those
selling stockholders who so transfer, pledge, donate or assign such Shares will
decrease as and when they take such actions. The plan of
11
<PAGE> 14
distribution for the Shares sold hereunder will otherwise remain unchanged,
except that the transferees, pledgees, donees or other successors will be
selling stockholders hereunder. In addition, a selling stockholder may, from
time to time, sell short the Shares, and in such instances, this prospectus may
be delivered in connection with such short sales and the shares of Alpha-Beta
common stock offered hereby may be used to cover such short sales.
A selling stockholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of Alpha-Beta
common stock in the course of hedging the positions they assume with such
selling stockholder, including, without limitation, in connection with
distributions of Alpha-Beta common stock by such broker-dealers. A selling
stockholder may also enter into option or other transactions with broker-dealers
that involve the delivery of the Shares to the broker-dealers, who may then
resell or otherwise transfer such shares of Alpha-Beta common stock. A selling
stockholder may also loan or pledge its Shares to a broker-dealer and the
broker-dealer may sell the Shares so loaned or upon a default may sell or
otherwise transfer the pledged Shares.
Brokers, dealers, underwriters or agents participating in the
distribution of the Shares as agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders and/or
purchasers of the Shares for whom such broker-dealers may act as agent, or to
whom they may sell as principal, or both (which compensation as to a particular
broker-dealer may be less than or in excess of customary commissions). The
selling stockholders and any broker-dealers who act in connection with the sale
of the Shares hereunder may be deemed to be "Underwriters" within the meaning of
the Securities Act, and any commissions they receive and proceeds of any sale of
the Shares may be deemed to be underwriting discounts and commissions under the
Securities Act. Neither Alpha-Beta nor any selling stockholders can presently
estimate the amount of such compensation. Alpha-Beta knows of no existing
arrangements between any selling stockholders, any other stockholder, broker,
dealer, underwriter or agent relating to the sale or distribution of the Shares.
Alpha-Beta will pay substantially all of the expenses incident to the
registration, offering and sale of the Shares to the public other than
commissions or discounts of underwriters, broker-dealers or agents. Alpha-Beta
has also agreed to indemnify the selling stockholders and certain related
persons against certain liabilities, including liabilities under the Securities
Act.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
Alpha-Beta, Alpha-Beta has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefore, unenforceable.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This prospectus is part of a registration statement Alpha-Beta filed
with the SEC to register the Alpha-Beta common stock offered in this offering.
It does not repeat important information that you can find in the registration
statement or in the reports and other documents that Alpha-Beta files with the
SEC. The SEC allows Alpha-Beta to "incorporate by reference" the information it
files with them. This means that Alpha-Beta can disclose important information
to you by referring to other documents that are legally considered to be part of
this prospectus, and later information that it files with the SEC will
automatically update and supersede the information in this prospectus and the
documents listed below. Alpha-Beta incorporates by reference the documents
listed below, and any future filings made with the SEC under Section 13(a),
13(c),
12
<PAGE> 15
14, or 15(d) of the Securities Exchange Act of 1934 until the selling
stockholders sell all the shares of Alpha-Beta common stock offered under this
prospectus:
1. the Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
2. the Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1998;
3. the Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1998;
4. the Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1998;
5. the Current Report on Form 8-K filed with the SEC on October 23, 1998;
6. the Form 8-A/A filed with the SEC on October 23, 1998;
7. the Amendment No. 1 to Form 8-K filed with the SEC on January 7, 1999;
and
8. the description of Alpha-Beta common stock contained in the Form 8-A
filed with the SEC on April 11, 1992, as amended by the Form 8-A/A
filed with the SEC on November 1, 1993.
You may request a copy of these filings at no cost by writing or
telephoning Alpha-Beta at the following address: Finance Department, Alpha-Beta
Technology, Inc., Three Biotech Park, One Innovation Drive, Worcester,
Massachusetts 01605 (Telephone: (508) 798-6900).
You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. Alpha-Beta has not authorized
anyone else to provide you with different or additional information. The selling
stockholders are not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of those documents.
Alpha-Beta files annual, quarterly and special reports, proxy statements
and other information electronically with the SEC. You may read a copy of any
reports, statements or other information that Alpha-Beta files with the SEC at
the SEC=s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Room. Alpha-Beta's SEC filings are also available from the Internet
site maintained by the SEC at http://www.sec.gov.
LEGAL MATTERS
The validity of the shares of Alpha-Beta common stock has been passed
upon for Alpha-Beta by Goodwin, Procter & Hoar LLP, Boston, Massachusetts.
EXPERTS
The financial statements of Alpha-Beta which are incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein upon the authority of said firm as experts in giving said
reports.
13
<PAGE> 16
================================================================================
You should rely only on the information incorporated by reference or
contained in this prospectus or any supplement. Alpha-Beta has not authorized
anyone else to provide you with different or additional information. The selling
stockholders are not making an offer of the Alpha-Beta common stock in any state
where the offer is not permitted. You should not assume that the information in
this prospectus or any supplement is accurate as of any date other than the date
on the front of those documents.
-------------------
TABLE OF CONTENTS
Page
----
Risk Factors................................ 2
The Company................................. 8
Use of Proceeds............................. 9
Material Terms of the HFTP Investments
Transaction............................... 9
Selling Stockholders........................ 10
Plan of Distribution........................ 11
Incorporation of Certain
Documents by Reference.................... 12
Legal Matters............................... 13
Experts..................................... 13
--------------------
11,047,500 Shares
ALPHA-BETA
TECHNOLOGY, INC.
Common Stock
----------------
PROSPECTUS
----------------
___________, 1999
================================================================================
<PAGE> 17
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
Alpha-Beta Common Stock being registered are set forth in the following table
(all amounts except the registration fee are estimated):
<TABLE>
<CAPTION>
<S> <C>
Registration fee $ 2,990
Consulting fees 300,000
Legal fees and expenses 100,000
Printing fees 30,000
Transfer Agent fees 5,000
Miscellaneous 25,000
--------------
TOTAL $ 462,990
==============
</TABLE>
All expenses referenced above will be borne by Alpha-Beta.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Alpha-Beta is a Massachusetts corporation. Reference is made to Chapter
156B, Section 13 of the Massachusetts Business Corporation Law (the "MBCL"),
which enables a corporation in its original articles of organization or an
amendment thereto to eliminate or limit the personal liability of a director for
monetary damages for violations of the director's fiduciary duty, except (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Sections
61 and 62 of the MBCL (providing for liability of directors for authorizing
unauthorized distributions and for making loans to directors, officers and
certain shareholders) or (iv) for any transaction from which a director derived
an improper personal benefit.
Reference also is made to Chapter 156B, Section 67 of the MBCL, which
provides that a corporation may indemnify directors, officers, employees and
other agents and persons who serve at its request as directors, officers,
employees or other agents of another organization or who serve at its request in
any capacity with respect to any employee benefit plan, to the extent specified
or authorized by the articles of organization, a by-law adopted by the
stockholders or a vote adopted by the holders of a majority of the shares of
stock entitled to vote on the election of directors. Such indemnification may
include payment by the corporation of expenses incurred in defending a civil or
criminal action or proceeding in advance of the final disposition of such action
or proceeding, upon receipt of an undertaking by the person indemnified to repay
such payment if he shall be adjudicated to be not entitled to indemnification
under Section 67 which undertaking may be accepted without reference to the
financial ability of such person to make repayment. Any such indemnification may
be provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan. No
indemnification shall be provided, however, for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or to the extent that such matter relates to service
with respect to an employee benefit plan, in the best interest of the
participants or beneficiaries of such employee benefit plan.
Article VI of the Restated Articles of Organization of Alpha-Beta
provides that, except under certain circumstances, directors of Alpha-Beta shall
not be personally liable to Alpha-Beta or its stockholders for monetary damages
for breach of fiduciary duties as a director.
Article VI of the Restated Articles of Organization of Alpha-Beta
provides for indemnification of the officers and directors of Alpha-Beta to the
full extent permitted by applicable law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling Alpha-Beta pursuant to the foregoing provisions,
the Commission has expressed its opinion that such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
II-1
<PAGE> 18
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.1 Registration Rights Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology,
Inc. and HFTP Investments. (1)
4.2 Certificate of Vote of Directors of Alpha-Beta Technology, Inc. Amending and Restating Terms of
Series F Convertible Preferred Stock Prior to Issuance filed with the Secretary of State of The
Commonwealth of Massachusetts on October 21, 1998. (2)
4.3 Securities Purchase Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology,
Inc. and HFTP Investments LLC. (3)
4.4 Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc. and
Reedland Capital Partners.
4.5 Second Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc.
and Reedland Capital Partners.
4.6 Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc. and World
Capital Funding, LLC.
4.7 Second Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc.
and World Capital Financing, LLC.
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the Alpha-Beta Common Stock being
registered. (*)
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1 hereto).
24.1 Powers of Attorney (included on signature page of Registration Statement as filed).
</TABLE>
- ----------------
(1) Incorporated by reference from Exhibit 4.2 to Alpha-Beta Technology, Inc.'s
current report on Form 8-K dated October 21, 1998, as amended.
(2) Incorporated by reference from Exhibit 4.3 to Alpha-Beta Technology, Inc.'s
current report on Form 8-K dated October 21, 1998, as amended.
(3) Incorporated by reference from Exhibit 4.1 to Alpha-Beta Technology, Inc.'s
current report on Form 8-K dated October 21, 1998, as amended.
(*) To be filed by Amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the undersigned registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
II-2
<PAGE> 19
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Alpha-Beta
Technology, Inc. certifies that it has duly caused this amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Worcester, Massachusetts, on the twelfth day of January,
1999.
ALPHA-BETA TECHNOLOGY, INC.
By: /s/ Spiros Jamas
----------------------------------
Spiros Jamas
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ Spiros James
- ---------------------------------------- President, Chief Executive January 12, 1999
Spiros Jamas Officer and Director (Principal
Executive Officer)
* Executive Vice President, January 12, 1999
- ---------------------------------------- Treasurer, Chief Operating
D. Davidson Easson Jr. Officer and Director
* Chief Financial Officer, January 12, 1999
- ----------------------------------------- Vice President, Finance
Joseph M. Grimm
* Chairman of the Board of January 12, 1999
- ----------------------------------------- Directors
Gustav A. Christensen
* Director January 12, 1999
- -----------------------------------------
Bernard Canavan
* Director January 12, 1999
- -----------------------------------------
Lawrence C. Hoff
* Director January 12, 1999
- -----------------------------------------
Michael E. Porter
* Director January 12, 1999
- -----------------------------------------
Peter H. Levine, M.D.
* By: /s/ Spiros Jamas
----------------------------------
Spiros Jamas
Attorney-in-fact
</TABLE>
II-4
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <C>
4.1 Registration Rights Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology,
Inc. and HFTP Investments. (1)
4.2 Certificate of Vote of Directors of Alpha-Beta Technology, Inc. Amending and Restating Terms of
Series F Convertible Preferred Stock Prior to Issuance filed with the Secretary of State of The
Commonwealth of Massachusetts on October 21, 1998. (2)
4.3 Securities Purchase Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology,
Inc. and HFTP Investments LLC. (3)
4.4 Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc. and
Reedland Capital Partners.
4.5 Second Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc.
and Reedland Capital Partners.
4.6 Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc. and World
Capital Funding, LLC.
4.7 Second Warrant Agreement, dated as of October 21, 1998, by and among Alpha-Beta Technology, Inc.
and World Capital Financing, LLC.
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the Alpha-Beta Common Stock being
registered. (*)
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1 hereto).
24.1 Powers of Attorney (included on signature page of Registration Statement as filed).
</TABLE>
- ------------------
(1) Incorporated by reference from Exhibit 4.2 to Alpha-Beta Technology, Inc.'s
current report on Form 8-K dated October 21, 1998, as amended.
(2) Incorporated by reference from Exhibit 4.3 to Alpha-Beta Technology, Inc.'s
current report on Form 8-K dated October 21, 1998, as amended.
(3) Incorporated by reference from Exhibit 4.1 to Alpha-Beta Technology, Inc.'s
current report on Form 8-K dated October 21, 1998, as amended.
(*) To be filed by Amendment.
DOCS\704221.3
II-5
<PAGE> 1
EXHIBIT 4.4
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of October 21, 1998, between Alpha-Beta
Technology, Inc., a Massachusetts corporation (the "Company"), and Reedland
Capital Partners (the "Holder").
W I T N E S S E T H:
WHEREAS, the Company has engaged the Holder to act as a consultant to
the Company regarding certain financing alternatives; and
WHEREAS, in consideration thereof, the Company has authorized the
issuance to the Holder of the warrant (the "Warrant") of the Company represented
by this Warrant Agreement, which Warrant entitles the Holder to purchase, upon
the terms and conditions hereinafter set forth, shares of Common Stock, par
value $.01 per share (the "Common Stock") of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
ARTICLE I
GRANT OF WARRANT
This Warrant Agreement entitles the Holder to purchase up to six
thousand two hundred fifty (6,250) shares of Common Stock at a price per share
equal to the Exercise Price per share (as defined in Section 2.1 hereof).
ARTICLE II
EXERCISE OF WARRANT; EXERCISE PRICE
Section 2.1 EXERCISE PRICE. This Warrant Agreement shall entitle the
Holder, subject to the provisions of Article II and Article III, to purchase
from the Company the number of shares of Common Stock provided for in Article I,
at a purchase price equal to the product of (x) 1.25 multiplied by (y) the
closing trade price on the date hereof for a share of Common Stock on the Nasdaq
National Market as reported by Bloomberg (such price, which shall be
<PAGE> 2
listed on Schedule I and attached hereto upon determination, is hereinafter
referred to as the "Exercise Price"), which shall be payable in full in cash at
the time of exercise of this Warrant Agreement.
Section 2.2 RIGHT TO EXERCISE THE WARRANT. This Warrant Agreement may be
exercised in full only, at any time during the period from the date hereof
through the date of the fifth anniversary of the date hereof (the "Exercise
Period").
Section 2.3 PROCEDURE FOR EXERCISING THE WARRANT. The Holder may
exercise this Warrant Agreement by executing the Form of Election attached
hereto as EXHIBIT A and delivering it to the Company and tendering the requisite
aggregate Exercise Price for the number of shares of Common Stock subject to
this Warrant Agreement to the Company on any business day during normal business
hours (the date of receipt of such Form of Election and aggregate Exercise Price
by the Company is hereinafter referred to as the "Exercise Date") provided, that
in lieu of tendering the requisite aggregate Exercise Price in cash, the Holder
may elect to exercise this Warrant Agreement on a net basis whereupon (a) the
number of shares of Common Stock issued upon such exercise shall be reduced by
that number of shares which have an aggregate fair market value, based upon the
average closing price for the Company's Common Stock for the last ten trading
days prior to the Exercise Date, equal to the requisite aggregate Exercise Price
and (b) the Exercise Price shall be deemed to have been paid and satisfied by
the tender of such shares to the Company.
Section 2.4 ISSUANCE OF SHARES OF COMMON STOCK. As soon as practicable
after the Exercise Date the Company shall (provided that it has received the
Form of Election duly executed, accompanied by payment of the Exercise Price
pursuant to Section 2.1 hereof for each of the shares of Common Stock to be
purchased) promptly cause certificates for the number of shares of Common Stock
to be issued in respect of this Warrant Agreement to be delivered to or upon the
order of the Holder, registered in such name as may be designated by such
holder; provided that if the Common Stock is to be registered in the name of any
entity or person other than the Holder, the Company may require evidence of
compliance by the Holder with all applicable securities laws.
ARTICLE III
RESERVATION AND AVAILABILITY OF COMMON STOCK; ADJUSTMENTS
Section 3.1 RESERVATION OF COMMON STOCK. The Company covenants and
agrees that it will cause to be kept available out of its authorized and
unissued Common Stock, or its authorized and issued Common Stock held in its
treasury, the number of shares of Common Stock that will be sufficient to permit
the exercise in full of this Warrant Agreement.
Section 3.2 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID
AND NON-ASSESSABLE. The Company covenants and agrees that it will take all such
action as may be
2
<PAGE> 3
necessary to ensure that all shares of Common Stock delivered upon exercise of
the Warrant shall, at the time of delivery of the certificates for such shares,
be duly and validly authorized and issued and fully paid and non-assessable
shares.
Section 3.3 COMMON STOCK RECORD DATE. Each person or entity in whose
name any certificate for shares of Common Stock is issued upon the exercise of
this Warrant Agreement shall for all purposes be deemed to have become the
holder of record of the shares of Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Form of Election was duly
executed and payment of the aggregate Exercise Price was made pursuant to
Section 2.1 hereof. Prior to the exercise of this Warrant Agreement, the Holder
shall not be entitled to any rights of a stockholder of the Company with respect
to the shares of Common Stock for which this Warrant Agreement shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 3.4 ADJUSTMENT FOR COMMON STOCK DIVIDENDS, SUBDIVISIONS AND
COMBINATIONS. In case the Company shall, at any time or from time to time, (i)
pay a dividend in Common Stock, or make a distribution in Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, or (iii)
combine its outstanding Common Stock into a smaller number of shares (including
a recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (a) the Exercise Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision or combination shall be adjusted by multiplying such Exercise Price
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event and
(b) the number of shares of Common Stock for which this Warrant Agreement may be
exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event.
Section 3.5 REORGANIZATIONS. All rights to exercise this Warrant
Agreement shall terminate in the event of any Reorganization (as defined below),
liquidation or dissolution of the Company, provided that the Company shall have
given at least thirty (30) days prior written notice to the Holder that such
transaction or event was to be consummated or effected and that the failure to
exercise this Warrant Agreement prior to such transaction or event shall result
in the lapse and termination of this Warrant Agreement and any rights hereunder.
In case of any consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock or the conversion of such outstanding shares
of Common Stock into shares of other stock or other securities or property), or
the sale or transfer of the property of the Company as an entirety or
3
<PAGE> 4
substantially as an entirety (collectively such actions being hereinafter
referred to as "Reorganizations"), there shall be deliverable upon exercise of
this Warrant Agreement (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock which would
otherwise have been deliverable upon the exercise of this Warrant Agreement
would have been entitled upon such Reorganization if this Warrant Agreement had
been exercised immediately prior to such Reorganization.
ARTICLE IV
HOLDER REPRESENTATIONS, WARRANTIES AND COVENANTS
The Holder represents and warrants to and covenants with, the Company,
as follows:
Section 4.1 INVESTMENT REPRESENTATIONS. It understands the risks of
investing in developing high technology companies such as the Company and can
afford a loss of its entire investment. It is acquiring the Warrant for
investment for its own account and not with the view to, or for resale in
connection with any distribution thereof. It understands that the Warrant and
the shares of Common Stock issuable upon exercise thereof have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state blue sky laws, by reason of specified exemptions from the
registration provisions of the Securities Act and such laws. It acknowledges
that the Warrant and the shares of Common Stock issuable upon exercise thereof
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits the resale of shares purchased in a private
placement subject to the satisfaction of certain conditions and that such Rule
may not be available for resale of the shares. It has had an opportunity to
discuss the Company's business, management and financial affairs with its
management and has had the opportunity to review the Company's facilities.
Section 4.2 NO CONFLICT. The Holder hereby represents and warrants that
(i) its acquisition of the Restricted Securities does not violate any law,
ordinance or regulation of any governmental entity or regulatory authority
having authority or jurisdiction over the Holder, and (ii) no order or
authorization of, consent from or filing with any court or governmental entity
or regulatory authority that has not been made or received (as applicable) is
required in connection with the Holder's acquisition of the Restricted
Securities.
Section 4.3 RESTRICTIONS ON TRANSFERABILITY. Neither the Warrant, nor
the shares of Common Stock received upon exercise thereof, shall be
transferable, except upon the conditions specified in and in accordance with the
terms of this Article IV hereof.
4
<PAGE> 5
Section 4.4 RESTRICTIVE LEGEND. Each certificate representing shares of
the Company's Common Stock issuable upon exercise of the Warrant, or any other
securities issued in respect of the Common Stock issued upon exercise of the
Warrant, upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with a
legend in substantially the following form (in addition to any legend required
under applicable state securities laws):
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER NAMED
HEREON FOR ITS OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR
CAUSING TO BE MADE ANY PUBLIC DISTRIBUTION OF ALL OR ANY PORTION
THEREOF; AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD OR IN ANY OTHER
WAY TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS IN EFFECT AT
THAT TIME, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Section 4.5 RESTRICTIONS ON, AND NOTICE OF, PROPOSED TRANSFERS. The
Holder agrees that prior to any proposed transfer of this Warrant or any of the
shares of Common Stock issuable upon exercise of this Warrant (collectively, the
"Restricted Securities"), the Holder shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied by either (a) a written opinion of legal counsel who shall
be reasonably satisfactory to the Company, addressed to the Company and
reasonably satisfactory in form and substance to the Company's counsel, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration under the Securities Act or under any applicable state or
other securities laws (which opinion with respect to state or other securities
laws shall in any event be delivered if the "no-action" letter is delivered
pursuant to Section 4.4(b)) or (b) a "no-action" letter from the staff of the
Securities and Exchange Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the staff
of the Securities and Exchange Commission that action be taken with respect
thereto, whereupon the Holder shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered to the Company.
Each certificate evidencing the Restricted Securities transferred as provided
above shall bear the appropriate restrictive legend set forth in Section 4.3
above, except that such certificate shall not bear such restrictive legend if
the opinion of counsel or "no-action" letter referred to above is to the further
effect that such legend is not required in order to comply with any provisions
of the Securities Act.
5
<PAGE> 6
ARTICLE V
MISCELLANEOUS
Section 5.1 NOTICES. Notices or demands relating to this Warrant
Agreement shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed as follows, or telexed, telecopied, or delivered by
nationally-recognized overnight or other courier:
If to the Holder: Reedland Capital Partners
21 Tamal Vista Blvd., Suite 201
Corte Madera, CA 94925
Attention: Mr. Thomas Griesel
Fax: (415) 927-2178
If to the Company: Alpha-Beta Technology, Inc.
One Innovation Drive
Three Biotech Park
Worcester, MA 01605
Attention: Chief Financial Officer
Fax: (508) 799-7968
copy to: John J. Egan III, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Fax: (617) 523-1231
Section 5.2 SUCCESSORS. All the covenants and provisions of this Warrant
Agreement by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of their respective successors and assigns hereunder;
provided that this Warrant Agreement may be assigned by the Holder only with the
prior written consent of the Company, and without such consent any attempted
transfer shall be null and void.
Section 5.3 MASSACHUSETTS CONTRACT. THIS AGREEMENT AND THE WARRANT, AND
ALL QUESTIONS RELATING TO THE INTERPRETATION, CONSTRUCTION AND ENFORCEABILITY OF
THIS AGREEMENT AND THE WARRANT, SHALL BE GOVERNED IN ALL RESPECTS BY THE
SUBSTANTIVE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
6
<PAGE> 7
Section 5.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
other than by a written instrument executed by the Company and the Holder.
Section 5.5 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Holder shall be enforceable to the fullest extent permitted by law.
[Remainder of Page Intentionally Left Blank]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed and delivered, all as of the date and year first
above written.
ALPHA-BETA TECHNOLOGY, INC.
By: /s/ Joseph M. Grimm
-------------------------------
Name: Joseph M. Grimm
Title: Chief Financial Officer
REEDLAND CAPITAL PARTNERS
By: /s/ Tom Griesel
-------------------------------
Name: Tom Griesel
Title: Managing Director
8
<PAGE> 9
SCHEDULE I
Closing trade price on October 21, 1998: $1.09375 per share
<PAGE> 10
EXHIBIT A
FORM OF ELECTION TO PURCHASE
(To be executed if the Holder desires to
exercise the Warrant Agreement)
To ALPHA-BETA TECHNOLOGY, INC.:
The undersigned hereby irrevocably elects to exercise the Warrant
represented by the Warrant Agreement to purchase _______ shares of Common Stock
issuable upon the exercise of such Warrant and requests that certificates for
such shares be issued in the name of:
____________________________________________________________
(Please print name and address)
____________________________________________________________
Please insert social security or other identifying number _____________________
Dated: _____________, 19__.
By: __________________________
Name:
Title:
<PAGE> 1
EXHIBIT 4.5
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of October 21, 1998, between Alpha-Beta
Technology, Inc., a Massachusetts corporation (the "Company"), and Reedland
Capital Partners (the "Holder").
W I T N E S S E T H:
WHEREAS, the Company has engaged the Holder to act as a consultant to
the Company regarding certain financing alternatives; and
WHEREAS, in consideration thereof, the Company has authorized the
issuance to the Holder of the warrant (the "Warrant") of the Company represented
by this Warrant Agreement, which Warrant entitles the Holder to purchase, upon
the terms and conditions hereinafter set forth, shares of Common Stock, par
value $.01 per share (the "Common Stock") of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
ARTICLE I
GRANT OF WARRANT
This Warrant Agreement entitles the Holder to purchase up to six
thousand two hundred fifty (6,250) shares of Common Stock at a price per share
equal to the Exercise Price per share (as defined in Section 2.1 hereof).
ARTICLE II
EXERCISE OF WARRANT; EXERCISE PRICE
Section 2.1 EXERCISE PRICE. This Warrant Agreement shall entitle the
Holder, subject to the provisions of Article II and Article III, to purchase
from the Company the number of shares of Common Stock provided for in Article I,
at a purchase price equal to the product of (x) 1.50 multiplied by (y) the
closing trade price on the date hereof for a share of Common Stock on the Nasdaq
National Market as reported by Bloomberg (such price, which shall be listed on
Schedule I and attached hereto upon determination, is hereinafter referred to as
the
<PAGE> 2
"Exercise Price"), which shall be payable in full in cash at the time of
exercise of this Warrant Agreement.
Section 2.2 RIGHT TO EXERCISE THE WARRANT. This Warrant Agreement may be
exercised in full only, at any time during the period from the date hereof
through the date of the fifth anniversary of the date hereof (the "Exercise
Period").
Section 2.3 PROCEDURE FOR EXERCISING THE WARRANT. The Holder may
exercise this Warrant Agreement by executing the Form of Election attached
hereto as EXHIBIT A and delivering it to the Company and tendering the requisite
aggregate Exercise Price for the number of shares of Common Stock subject to
this Warrant Agreement to the Company on any business day during normal business
hours (the date of receipt of such Form of Election and aggregate Exercise Price
by the Company is hereinafter referred to as the "Exercise Date") provided, that
in lieu of tendering the requisite aggregate Exercise Price in cash, the Holder
may elect to exercise this Warrant Agreement on a net basis whereupon (a) the
number of shares of Common Stock issued upon such exercise shall be reduced by
that number of shares which have an aggregate fair market value, based upon the
average closing price for the Company's Common Stock for the last ten trading
days prior to the Exercise Date, equal to the requisite aggregate Exercise Price
and (b) the Exercise Price shall be deemed to have been paid and satisfied by
the tender of such shares to the Company.
Section 2.4 ISSUANCE OF SHARES OF COMMON STOCK. As soon as practicable
after the Exercise Date the Company shall (provided that it has received the
Form of Election duly executed, accompanied by payment of the Exercise Price
pursuant to Section 2.1 hereof for each of the shares of Common Stock to be
purchased) promptly cause certificates for the number of shares of Common Stock
to be issued in respect of this Warrant Agreement to be delivered to or upon the
order of the Holder, registered in such name as may be designated by such
holder; provided that if the Common Stock is to be registered in the name of any
entity or person other than the Holder, the Company may require evidence of
compliance by the Holder with all applicable securities laws.
ARTICLE III
RESERVATION AND AVAILABILITY OF COMMON STOCK; ADJUSTMENTS
Section 3.1 RESERVATION OF COMMON STOCK. The Company covenants and
agrees that it will cause to be kept available out of its authorized and
unissued Common Stock, or its authorized and issued Common Stock held in its
treasury, the number of shares of Common Stock that will be sufficient to permit
the exercise in full of this Warrant Agreement.
Section 3.2 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID
AND NONASSESSABLE. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon exercise of the Warrant
2
<PAGE> 3
shall, at the time of delivery of the certificates for such shares, be duly and
validly authorized and issued and fully paid and non-assessable shares.
Section 3.3 COMMON STOCK RECORD DATE. Each person or entity in whose
name any certificate for shares of Common Stock is issued upon the exercise of
this Warrant Agreement shall for all purposes be deemed to have become the
holder of record of the shares of Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Form of Election was duly
executed and payment of the aggregate Exercise Price was made pursuant to
Section 2.1 hereof. Prior to the exercise of this Warrant Agreement, the Holder
shall not be entitled to any rights of a stockholder of the Company with respect
to the shares of Common Stock for which this Warrant Agreement shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 3.4 ADJUSTMENT FOR COMMON STOCK DIVIDENDS, SUBDIVISIONS AND
COMBINATIONS. In case the Company shall, at any time or from time to time, (i)
pay a dividend in Common Stock, or make a distribution in Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, or (iii)
combine its outstanding Common Stock into a smaller number of shares (including
a recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (a) the Exercise Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision or combination shall be adjusted by multiplying such Exercise Price
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event and
(b) the number of shares of Common Stock for which this Warrant Agreement may be
exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event.
Section 3.5 REORGANIZATIONS. All rights to exercise this Warrant
Agreement shall terminate in the event of any Reorganization (as defined below),
liquidation or dissolution of the Company, provided that the Company shall have
given at least thirty (30) days prior written notice to the Holder that such
transaction or event was to be consummated or effected and that the failure to
exercise this Warrant Agreement prior to such transaction or event shall result
in the lapse and termination of this Warrant Agreement and any rights hereunder.
In case of any consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock or the conversion of such outstanding shares
of Common Stock into shares of other stock or other securities or property), or
the sale or transfer of the property of the Company as an entirety or
substantially as an entirety (collectively such actions being hereinafter
referred to as
3
<PAGE> 4
"Reorganizations"), there shall be deliverable upon exercise of this Warrant
Agreement (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock which would otherwise
have been deliverable upon the exercise of this Warrant Agreement would have
been entitled upon such Reorganization if this Warrant Agreement had been
exercised immediately prior to such Reorganization.
ARTICLE IV
HOLDER REPRESENTATIONS, WARRANTIES AND COVENANTS
The Holder represents and warrants to and covenants with, the Company,
as follows:
Section 4.1 INVESTMENT REPRESENTATIONS. It understands the risks of
investing in developing high technology companies such as the Company and can
afford a loss of its entire investment. It is acquiring the Warrant for
investment for its own account and not with the view to, or for resale in
connection with any distribution thereof. It understands that the Warrant and
the shares of Common Stock issuable upon exercise thereof have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state blue sky laws, by reason of specified exemptions from the
registration provisions of the Securities Act and such laws. It acknowledges
that the Warrant and the shares of Common Stock issuable upon exercise thereof
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits the resale of shares purchased in a private
placement subject to the satisfaction of certain conditions and that such Rule
may not be available for resale of the shares. It has had an opportunity to
discuss the Company's business, management and financial affairs with its
management and has had the opportunity to review the Company's facilities.
Section 4.2 NO CONFLICT. The Holder hereby represents and warrants that
(i) its acquisition of the Restricted Securities does not violate any law,
ordinance or regulation of any governmental entity or regulatory authority
having authority or jurisdiction over the Holder, and (ii) no order or
authorization of, consent from or filing with any court or governmental entity
or regulatory authority that has not been made or received (as applicable) is
required in connection with the Holder's acquisition of the Restricted
Securities.
Section 4.3 RESTRICTIONS ON TRANSFERABILITY. Neither the Warrant, nor
the shares of Common Stock received upon exercise thereof, shall be
transferable, except upon the conditions specified in and in accordance with the
terms of this Article IV hereof.
Section 4.4 RESTRICTIVE LEGEND. Each certificate representing shares of
the Company's Common Stock issuable upon exercise of the Warrant, or any other
securities issued in respect
4
<PAGE> 5
of the Common Stock issued upon exercise of the Warrant, upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event, shall
be stamped or otherwise imprinted with a legend in substantially the following
form (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER NAMED
HEREON FOR ITS OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR
CAUSING TO BE MADE ANY PUBLIC DISTRIBUTION OF ALL OR ANY PORTION
THEREOF; AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD OR IN ANY OTHER
WAY TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS IN EFFECT AT
THAT TIME, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Section 4.5 RESTRICTIONS ON, AND NOTICE OF, PROPOSED TRANSFERS. The
Holder agrees that prior to any proposed transfer of this Warrant or any of the
shares of Common Stock issuable upon exercise of this Warrant (collectively, the
"Restricted Securities"), the Holder shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied by either (a) a written opinion of legal counsel who shall
be reasonably satisfactory to the Company, addressed to the Company and
reasonably satisfactory in form and substance to the Company's counsel, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration under the Securities Act or under any applicable state or
other securities laws (which opinion with respect to state or other securities
laws shall in any event be delivered if the "no-action" letter is delivered
pursuant to Section 4.4(b)) or (b) a "no-action" letter from the staff of the
Securities and Exchange Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the staff
of the Securities and Exchange Commission that action be taken with respect
thereto, whereupon the Holder shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered to the Company.
Each certificate evidencing the Restricted Securities transferred as provided
above shall bear the appropriate restrictive legend set forth in Section 4.3
above, except that such certificate shall not bear such restrictive legend if
the opinion of counsel or "no-action" letter referred to above is to the further
effect that such legend is not required in order to comply with any provisions
of the Securities Act.
5
<PAGE> 6
ARTICLE V
MISCELLANEOUS
Section 5.1 NOTICES. Notices or demands relating to this Warrant
Agreement shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed as follows, or telexed, telecopied, or delivered by
nationally-recognized overnight or other courier:
If to the Holder: Reedland Capital Partners
21 Tamal Vista Blvd., Suite 201
Corte Madera, CA 94925
Attention: Mr. Thomas Griesel
Fax: (415) 927-2178
If to the Company: Alpha-Beta Technology, Inc.
One Innovation Drive
Three Biotech Park
Worcester, MA 01605
Attention: Chief Financial Officer
Fax: (508) 799-7968
copy to: John J. Egan III, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Fax: (617) 523-1231
Section 5.2 SUCCESSORS. All the covenants and provisions of this Warrant
Agreement by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of their respective successors and assigns hereunder;
provided that this Warrant Agreement may be assigned by the Holder only with the
prior written consent of the Company, and without such consent any attempted
transfer shall be null and void.
Section 5.3 MASSACHUSETTS CONTRACT. THIS AGREEMENT AND THE WARRANT, AND
ALL QUESTIONS RELATING TO THE INTERPRETATION, CONSTRUCTION AND ENFORCEABILITY OF
THIS AGREEMENT AND THE WARRANT, SHALL BE GOVERNED IN ALL RESPECTS BY THE
SUBSTANTIVE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
6
<PAGE> 7
Section 5.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
other than by a written instrument executed by the Company and the Holder.
Section 5.5 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Holder shall be enforceable to the fullest extent permitted by law.
[Remainder of Page Intentionally Left Blank]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed and delivered, all as of the date and year first
above written.
ALPHA-BETA TECHNOLOGY, INC.
By: /s/ Joseph M. Grimm
------------------------------
Name: Joseph M. Grimm
Title: Chief Financial Officer
REEDLAND CAPITAL PARTNERS
By: /s/ Tom Griesel
------------------------------
Name: Tom Griesel
Title: Managing Director
8
<PAGE> 9
SCHEDULE I
Closing trade price on October 21, 1998: $1.09375 per share
<PAGE> 10
EXHIBIT A
FORM OF ELECTION TO PURCHASE
(To be executed if the Holder desires to
exercise the Warrant Agreement)
To ALPHA-BETA TECHNOLOGY, INC.:
The undersigned hereby irrevocably elects to exercise the Warrant
represented by the Warrant Agreement to purchase _______ shares of Common Stock
issuable upon the exercise of such Warrant and requests that certificates for
such shares be issued in the name of:
_______________________________________________________________________
(Please print name and address)
_______________________________________________________________________
Please insert social security or other identifying number _________________
Dated: ______________, 19__.
By: ___________________________
Name:
Title:
<PAGE> 1
EXHIBIT 4.6
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of October 21, 1998, between Alpha-Beta
Technology, Inc., a Massachusetts corporation (the "Company"), and World Capital
Funding, LLC (the "Holder").
W I T N E S S E T H:
WHEREAS, the Company has engaged the Holder to act as a consultant to
the Company regarding certain financing alternatives; and
WHEREAS, in consideration thereof, the Company has authorized the
issuance to the Holder of the warrant (the "Warrant") of the Company represented
by this Warrant Agreement, which Warrant entitles the Holder to purchase, upon
the terms and conditions hereinafter set forth, shares of Common Stock, par
value $.01 per share (the "Common Stock") of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
ARTICLE I
GRANT OF WARRANT
This Warrant Agreement entitles the Holder to purchase up to six
thousand two hundred fifty (6,250) shares of Common Stock at a price per share
equal to the Exercise Price per share (as defined in Section 2.1 hereof).
ARTICLE II
EXERCISE OF WARRANT; EXERCISE PRICE
Section 2.1 EXERCISE PRICE. This Warrant Agreement shall entitle the
Holder, subject to the provisions of Article II and Article III, to purchase
from the Company the number of shares of Common Stock provided for in Article I,
at a purchase price equal to the product of (x) 1.25 multiplied by (y) the
closing trade price on the date hereof for a share of Common Stock on the Nasdaq
National Market as reported by Bloomberg (such price, which shall be
<PAGE> 2
listed on Schedule I and attached hereto upon determination, is hereinafter
referred to as the "Exercise Price"), which shall be payable in full in cash at
the time of exercise of this Warrant Agreement.
Section 2.2 RIGHT TO EXERCISE THE WARRANT. This Warrant Agreement may be
exercised in full only, at any time during the period from the date hereof
through the date of the fifth anniversary of the date hereof (the "Exercise
Period").
Section 2.3 PROCEDURE FOR EXERCISING THE WARRANT. The Holder may
exercise this Warrant Agreement by executing the Form of Election attached
hereto as EXHIBIT A and delivering it to the Company and tendering the requisite
aggregate Exercise Price for the number of shares of Common Stock subject to
this Warrant Agreement to the Company on any business day during normal business
hours (the date of receipt of such Form of Election and aggregate Exercise Price
by the Company is hereinafter referred to as the "Exercise Date") provided, that
in lieu of tendering the requisite aggregate Exercise Price in cash, the Holder
may elect to exercise this Warrant Agreement on a net basis whereupon (a) the
number of shares of Common Stock issued upon such exercise shall be reduced by
that number of shares which have an aggregate fair market value, based upon the
average closing price for the Company's Common Stock for the last ten trading
days prior to the Exercise Date, equal to the requisite aggregate Exercise Price
and (b) the Exercise Price shall be deemed to have been paid and satisfied by
the tender of such shares to the Company.
Section 2.4 ISSUANCE OF SHARES OF COMMON STOCK. As soon as practicable
after the Exercise Date the Company shall (provided that it has received the
Form of Election duly executed, accompanied by payment of the Exercise Price
pursuant to Section 2.1 hereof for each of the shares of Common Stock to be
purchased) promptly cause certificates for the number of shares of Common Stock
to be issued in respect of this Warrant Agreement to be delivered to or upon the
order of the Holder, registered in such name as may be designated by such
holder; provided that if the Common Stock is to be registered in the name of any
entity or person other than the Holder, the Company may require evidence of
compliance by the Holder with all applicable securities laws.
ARTICLE III
RESERVATION AND AVAILABILITY OF COMMON STOCK; ADJUSTMENTS
Section 3.1 RESERVATION OF COMMON STOCK. The Company covenants and
agrees that it will cause to be kept available out of its authorized and
unissued Common Stock, or its authorized and issued Common Stock held in its
treasury, the number of shares of Common Stock that will be sufficient to permit
the exercise in full of this Warrant Agreement.
Section 3.2 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID
AND NON-ASSESSABLE. The Company covenants and agrees that it will take all such
action as may be
2
<PAGE> 3
necessary to ensure that all shares of Common Stock delivered upon exercise of
the Warrant shall, at the time of delivery of the certificates for such shares,
be duly and validly authorized and issued and fully paid and non-assessable
shares.
Section 3.3 COMMON STOCK RECORD DATE. Each person or entity in whose
name any certificate for shares of Common Stock is issued upon the exercise of
this Warrant Agreement shall for all purposes be deemed to have become the
holder of record of the shares of Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Form of Election was duly
executed and payment of the aggregate Exercise Price was made pursuant to
Section 2.1 hereof. Prior to the exercise of this Warrant Agreement, the Holder
shall not be entitled to any rights of a stockholder of the Company with respect
to the shares of Common Stock for which this Warrant Agreement shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 3.4 ADJUSTMENT FOR COMMON STOCK DIVIDENDS, SUBDIVISIONS AND
COMBINATIONS. In case the Company shall, at any time or from time to time, (i)
pay a dividend in Common Stock, or make a distribution in Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, or (iii)
combine its outstanding Common Stock into a smaller number of shares (including
a recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (a) the Exercise Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision or combination shall be adjusted by multiplying such Exercise Price
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event and
(b) the number of shares of Common Stock for which this Warrant Agreement may be
exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event.
Section 3.5 REORGANIZATIONS. All rights to exercise this Warrant
Agreement shall terminate in the event of any Reorganization (as defined below),
liquidation or dissolution of the Company, provided that the Company shall have
given at least thirty (30) days prior written notice to the Holder that such
transaction or event was to be consummated or effected and that the failure to
exercise this Warrant Agreement prior to such transaction or event shall result
in the lapse and termination of this Warrant Agreement and any rights hereunder.
In case of any consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock or the conversion of such outstanding shares
of Common Stock into shares of other stock or other securities or property), or
the sale or transfer of the property of the Company as an entirety or
3
<PAGE> 4
substantially as an entirety (collectively such actions being hereinafter
referred to as "Reorganizations"), there shall be deliverable upon exercise of
this Warrant Agreement (in lieu of the number of shares of Common Stock
theretofore deliverable) the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock which would
otherwise have been deliverable upon the exercise of this Warrant Agreement
would have been entitled upon such Reorganization if this Warrant Agreement had
been exercised immediately prior to such Reorganization.
ARTICLE IV
HOLDER REPRESENTATIONS, WARRANTIES AND COVENANTS
The Holder represents and warrants to and covenants with, the Company,
as follows:
Section 4.1 INVESTMENT REPRESENTATIONS. It understands the risks of
investing in developing high technology companies such as the Company and can
afford a loss of its entire investment. It is acquiring the Warrant for
investment for its own account and not with the view to, or for resale in
connection with any distribution thereof. It understands that the Warrant and
the shares of Common Stock issuable upon exercise thereof have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state blue sky laws, by reason of specified exemptions from the
registration provisions of the Securities Act and such laws. It acknowledges
that the Warrant and the shares of Common Stock issuable upon exercise thereof
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits the resale of shares purchased in a private
placement subject to the satisfaction of certain conditions and that such Rule
may not be available for resale of the shares. It has had an opportunity to
discuss the Company's business, management and financial affairs with its
management and has had the opportunity to review the Company's facilities.
Section 4.2 NO CONFLICT. The Holder hereby represents and warrants that
(i) its acquisition of the Restricted Securities does not violate any law,
ordinance or regulation of any governmental entity or regulatory authority
having authority or jurisdiction over the Holder, and (ii) no order or
authorization of, consent from or filing with any court or governmental entity
or regulatory authority that has not been made or received (as applicable) is
required in connection with the Holder's acquisition of the Restricted
Securities.
Section 4.3 RESTRICTIONS ON TRANSFERABILITY. Neither the Warrant, nor
the shares of Common Stock received upon exercise thereof, shall be
transferable, except upon the conditions specified in and in accordance with the
terms of this Article IV hereof.
4
<PAGE> 5
Section 4.4 RESTRICTIVE LEGEND. Each certificate representing shares of
the Company's Common Stock issuable upon exercise of the Warrant, or any other
securities issued in respect of the Common Stock issued upon exercise of the
Warrant, upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall be stamped or otherwise imprinted with a
legend in substantially the following form (in addition to any legend required
under applicable state securities laws):
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER NAMED
HEREON FOR ITS OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR
CAUSING TO BE MADE ANY PUBLIC DISTRIBUTION OF ALL OR ANY PORTION
THEREOF; AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD OR IN ANY OTHER
WAY TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS IN EFFECT AT
THAT TIME, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Section 4.5 RESTRICTIONS ON, AND NOTICE OF, PROPOSED TRANSFERS. The
Holder agrees that prior to any proposed transfer of this Warrant or any of the
shares of Common Stock issuable upon exercise of this Warrant (collectively, the
"Restricted Securities"), the Holder shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied by either (a) a written opinion of legal counsel who shall
be reasonably satisfactory to the Company, addressed to the Company and
reasonably satisfactory in form and substance to the Company's counsel, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration under the Securities Act or under any applicable state or
other securities laws (which opinion with respect to state or other securities
laws shall in any event be delivered if the "no-action" letter is delivered
pursuant to Section 4.4(b)) or (b) a "no-action" letter from the staff of the
Securities and Exchange Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the staff
of the Securities and Exchange Commission that action be taken with respect
thereto, whereupon the Holder shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered to the Company.
Each certificate evidencing the Restricted Securities transferred as provided
above shall bear the appropriate restrictive legend set forth in Section 4.3
above, except that such certificate shall not bear such restrictive legend if
the opinion of counsel or "no-action" letter referred to above is to the further
effect that such legend is not required in order to comply with any provisions
of the Securities Act.
5
<PAGE> 6
ARTICLE V
MISCELLANEOUS
Section 5.1 NOTICES. Notices or demands relating to this Warrant
Agreement shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed as follows, or telexed, telecopied, or delivered by
nationally-recognized overnight or other courier:
If to the Holder: World Capital Funding, LLC
1499 Blake Street, Suite 6C
Denver, CO 80202
Attention: Mr. Keith Mazer
Fax: (303) 620-9199
If to the Company: Alpha-Beta Technology, Inc.
One Innovation Drive
Three Biotech Park
Worcester, MA 01605
Attention: Chief Financial Officer
Fax: (508) 799-7968
copy to: John J. Egan III, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Fax: (617) 523-1231
Section 5.2 SUCCESSORS. All the covenants and provisions of this Warrant
Agreement by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of their respective successors and assigns hereunder;
provided that this Warrant Agreement may be assigned by the Holder only with the
prior written consent of the Company, and without such consent any attempted
transfer shall be null and void.
Section 5.3 MASSACHUSETTS CONTRACT. THIS AGREEMENT AND THE WARRANT, AND
ALL QUESTIONS RELATING TO THE INTERPRETATION, CONSTRUCTION AND ENFORCEABILITY OF
THIS AGREEMENT AND THE WARRANT, SHALL BE GOVERNED IN ALL RESPECTS BY THE
SUBSTANTIVE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
6
<PAGE> 7
Section 5.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
other than by a written instrument executed by the Company and the Holder.
Section 5.5 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Holder shall be enforceable to the fullest extent permitted by law.
[Remainder of Page Intentionally Left Blank]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed and delivered, all as of the date and year first
above written.
ALPHA-BETA TECHNOLOGY, INC.
By: /s/ Joseph M. Grimm
------------------------------
Name: Joseph M. Grimm
Title: Chief Financial Officer
WORLD CAPITAL FUNDING, LLC
By: /s/ Keith Mazer
------------------------------
Name: Keith Mazer
Title: Managing Partner
8
<PAGE> 9
SCHEDULE I
Closing trade price on October 21, 1998: $1.09375 per share
<PAGE> 10
EXHIBIT A
FORM OF ELECTION TO PURCHASE
(To be executed if the Holder desires to
exercise the Warrant Agreement)
To ALPHA-BETA TECHNOLOGY, INC.:
The undersigned hereby irrevocably elects to exercise the Warrant
represented by the Warrant Agreement to purchase _______ shares of Common Stock
issuable upon the exercise of such Warrant and requests that certificates for
such shares be issued in the name of:
_____________________________________________________________________
(Please print name and address)
_____________________________________________________________________
Please insert social security or other identifying number ________________
Dated: _____________, 19__.
By: _________________________
Name:
Title:
<PAGE> 1
EXHIBIT 4.7
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of October 21, 1998, between Alpha-Beta
Technology, Inc., a Massachusetts corporation (the "Company"), and World Capital
Funding, LLC (the "Holder").
W I T N E S S E T H:
WHEREAS, the Company has engaged the Holder to act as a consultant to
the Company regarding certain financing alternatives; and
WHEREAS, in consideration thereof, the Company has authorized the
issuance to the Holder of the warrant (the "Warrant") of the Company represented
by this Warrant Agreement, which Warrant entitles the Holder to purchase, upon
the terms and conditions hereinafter set forth, shares of Common Stock, par
value $.01 per share (the "Common Stock") of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
ARTICLE I
GRANT OF WARRANT
This Warrant Agreement entitles the Holder to purchase up to six
thousand two hundred fifty (6,250) shares of Common Stock at a price per share
equal to the Exercise Price per share (as defined in Section 2.1 hereof).
ARTICLE II
EXERCISE OF WARRANT; EXERCISE PRICE
Section 2.1 EXERCISE PRICE. This Warrant Agreement shall entitle the
Holder, subject to the provisions of Article II and Article III, to purchase
from the Company the number of shares of Common Stock provided for in Article I,
at a purchase price equal to the product of (x) 1.50 multiplied by (y) the
closing trade price on the date hereof for a share of Common Stock on the Nasdaq
National Market as reported by Bloomberg (such price, which shall be listed on
Schedule I and attached hereto upon determination, is hereinafter referred to as
the
<PAGE> 2
"Exercise Price"), which shall be payable in full in cash at the time of
exercise of this Warrant Agreement.
Section 2.2 RIGHT TO EXERCISE THE WARRANT. This Warrant Agreement may be
exercised in full only, at any time during the period from the date hereof
through the date of the fifth anniversary of the date hereof (the "Exercise
Period").
Section 2.3 PROCEDURE FOR EXERCISING THE WARRANT. The Holder may
exercise this Warrant Agreement by executing the Form of Election attached
hereto as EXHIBIT A and delivering it to the Company and tendering the requisite
aggregate Exercise Price for the number of shares of Common Stock subject to
this Warrant Agreement to the Company on any business day during normal business
hours (the date of receipt of such Form of Election and aggregate Exercise Price
by the Company is hereinafter referred to as the "Exercise Date") provided, that
in lieu of tendering the requisite aggregate Exercise Price in cash, the Holder
may elect to exercise this Warrant Agreement on a net basis whereupon (a) the
number of shares of Common Stock issued upon such exercise shall be reduced by
that number of shares which have an aggregate fair market value, based upon the
average closing price for the Company's Common Stock for the last ten trading
days prior to the Exercise Date, equal to the requisite aggregate Exercise Price
and (b) the Exercise Price shall be deemed to have been paid and satisfied by
the tender of such shares to the Company.
Section 2.4 ISSUANCE OF SHARES OF COMMON STOCK. As soon as practicable
after the Exercise Date the Company shall (provided that it has received the
Form of Election duly executed, accompanied by payment of the Exercise Price
pursuant to Section 2.1 hereof for each of the shares of Common Stock to be
purchased) promptly cause certificates for the number of shares of Common Stock
to be issued in respect of this Warrant Agreement to be delivered to or upon the
order of the Holder, registered in such name as may be designated by such
holder; provided that if the Common Stock is to be registered in the name of any
entity or person other than the Holder, the Company may require evidence of
compliance by the Holder with all applicable securities laws.
ARTICLE III
RESERVATION AND AVAILABILITY OF COMMON STOCK; ADJUSTMENTS
Section 3.1 RESERVATION OF COMMON STOCK. The Company covenants and
agrees that it will cause to be kept available out of its authorized and
unissued Common Stock, or its authorized and issued Common Stock held in its
treasury, the number of shares of Common Stock that will be sufficient to permit
the exercise in full of this Warrant Agreement.
Section 3.2 COMMON STOCK TO BE DULY AUTHORIZED AND ISSUED, FULLY PAID
AND NONASSESSABLE. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon exercise of the Warrant
2
<PAGE> 3
shall, at the time of delivery of the certificates for such shares, be duly and
validly authorized and issued and fully paid and non-assessable shares.
Section 3.3 COMMON STOCK RECORD DATE. Each person or entity in whose
name any certificate for shares of Common Stock is issued upon the exercise of
this Warrant Agreement shall for all purposes be deemed to have become the
holder of record of the shares of Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Form of Election was duly
executed and payment of the aggregate Exercise Price was made pursuant to
Section 2.1 hereof. Prior to the exercise of this Warrant Agreement, the Holder
shall not be entitled to any rights of a stockholder of the Company with respect
to the shares of Common Stock for which this Warrant Agreement shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 3.4 ADJUSTMENT FOR COMMON STOCK DIVIDENDS, SUBDIVISIONS AND
COMBINATIONS. In case the Company shall, at any time or from time to time, (i)
pay a dividend in Common Stock, or make a distribution in Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares, or (iii)
combine its outstanding Common Stock into a smaller number of shares (including
a recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (a) the Exercise Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision or combination shall be adjusted by multiplying such Exercise Price
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such event and
(b) the number of shares of Common Stock for which this Warrant Agreement may be
exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event.
Section 3.5 REORGANIZATIONS. All rights to exercise this Warrant
Agreement shall terminate in the event of any Reorganization (as defined below),
liquidation or dissolution of the Company, provided that the Company shall have
given at least thirty (30) days prior written notice to the Holder that such
transaction or event was to be consummated or effected and that the failure to
exercise this Warrant Agreement prior to such transaction or event shall result
in the lapse and termination of this Warrant Agreement and any rights hereunder.
In case of any consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
continuing corporation and which does not result in any reclassification of the
outstanding shares of Common Stock or the conversion of such outstanding shares
of Common Stock into shares of other stock or other securities or property), or
the sale or transfer of the property of the Company as an entirety or
substantially as an entirety (collectively such actions being hereinafter
referred to as
3
<PAGE> 4
"Reorganizations"), there shall be deliverable upon exercise of this Warrant
Agreement (in lieu of the number of shares of Common Stock theretofore
deliverable) the number of shares of stock or other securities or property to
which a holder of the number of shares of Common Stock which would otherwise
have been deliverable upon the exercise of this Warrant Agreement would have
been entitled upon such Reorganization if this Warrant Agreement had been
exercised immediately prior to such Reorganization.
ARTICLE IV
HOLDER REPRESENTATIONS, WARRANTIES AND COVENANTS
The Holder represents and warrants to and covenants with, the Company,
as follows:
Section 4.1 INVESTMENT REPRESENTATIONS. It understands the risks of
investing in developing high technology companies such as the Company and can
afford a loss of its entire investment. It is acquiring the Warrant for
investment for its own account and not with the view to, or for resale in
connection with any distribution thereof. It understands that the Warrant and
the shares of Common Stock issuable upon exercise thereof have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
or any state blue sky laws, by reason of specified exemptions from the
registration provisions of the Securities Act and such laws. It acknowledges
that the Warrant and the shares of Common Stock issuable upon exercise thereof
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits the resale of shares purchased in a private
placement subject to the satisfaction of certain conditions and that such Rule
may not be available for resale of the shares. It has had an opportunity to
discuss the Company's business, management and financial affairs with its
management and has had the opportunity to review the Company's facilities.
Section 4.2 NO CONFLICT. The Holder hereby represents and warrants that
(i) its acquisition of the Restricted Securities does not violate any law,
ordinance or regulation of any governmental entity or regulatory authority
having authority or jurisdiction over the Holder, and (ii) no order or
authorization of, consent from or filing with any court or governmental entity
or regulatory authority that has not been made or received (as applicable) is
required in connection with the Holder's acquisition of the Restricted
Securities.
Section 4.3 RESTRICTIONS ON TRANSFERABILITY. Neither the Warrant, nor
the shares of Common Stock received upon exercise thereof, shall be
transferable, except upon the conditions specified in and in accordance with the
terms of this Article IV hereof.
Section 4.4 RESTRICTIVE LEGEND. Each certificate representing shares of
the Company's Common Stock issuable upon exercise of the Warrant, or any other
securities issued in respect
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of the Common Stock issued upon exercise of the Warrant, upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event, shall
be stamped or otherwise imprinted with a legend in substantially the following
form (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER NAMED
HEREON FOR ITS OWN ACCOUNT FOR INVESTMENT WITH NO INTENTION OF MAKING OR
CAUSING TO BE MADE ANY PUBLIC DISTRIBUTION OF ALL OR ANY PORTION
THEREOF; AND SUCH SECURITIES MAY NOT BE PLEDGED, SOLD OR IN ANY OTHER
WAY TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS IN EFFECT AT
THAT TIME, OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Section 4.5 RESTRICTIONS ON, AND NOTICE OF, PROPOSED TRANSFERS. The
Holder agrees that prior to any proposed transfer of this Warrant or any of the
shares of Common Stock issuable upon exercise of this Warrant (collectively, the
"Restricted Securities"), the Holder shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer in sufficient detail, and
shall be accompanied by either (a) a written opinion of legal counsel who shall
be reasonably satisfactory to the Company, addressed to the Company and
reasonably satisfactory in form and substance to the Company's counsel, to the
effect that the proposed transfer of the Restricted Securities may be effected
without registration under the Securities Act or under any applicable state or
other securities laws (which opinion with respect to state or other securities
laws shall in any event be delivered if the "no-action" letter is delivered
pursuant to Section 4.4(b)) or (b) a "no-action" letter from the staff of the
Securities and Exchange Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the staff
of the Securities and Exchange Commission that action be taken with respect
thereto, whereupon the Holder shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered to the Company.
Each certificate evidencing the Restricted Securities transferred as provided
above shall bear the appropriate restrictive legend set forth in Section 4.3
above, except that such certificate shall not bear such restrictive legend if
the opinion of counsel or "no-action" letter referred to above is to the further
effect that such legend is not required in order to comply with any provisions
of the Securities Act.
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ARTICLE V
MISCELLANEOUS
Section 5.1 NOTICES. Notices or demands relating to this Warrant
Agreement shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed as follows, or telexed, telecopied, or delivered by
nationally-recognized overnight or other courier:
If to the Holder: World Capital Funding, LLC
1499 Blake Street
Denver, CO 80202
Attention: Mr. Keith Mazer
Fax: (303) 620-9199
If to the Company: Alpha-Beta Technology, Inc.
One Innovation Drive
Three Biotech Park
Worcester, MA 01605
Attention: Chief Financial Officer
Fax: (508) 799-7968
copy to: John J. Egan III, Esq.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Fax: (617) 523-1231
Section 5.2 SUCCESSORS. All the covenants and provisions of this Warrant
Agreement by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of their respective successors and assigns hereunder;
provided that this Warrant Agreement may be assigned by the Holder only with the
prior written consent of the Company, and without such consent any attempted
transfer shall be null and void.
Section 5.3 MASSACHUSETTS CONTRACT. THIS AGREEMENT AND THE WARRANT, AND
ALL QUESTIONS RELATING TO THE INTERPRETATION, CONSTRUCTION AND ENFORCEABILITY OF
THIS AGREEMENT AND THE WARRANT, SHALL BE GOVERNED IN ALL RESPECTS BY THE
SUBSTANTIVE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
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Section 5.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
other than by a written instrument executed by the Company and the Holder.
Section 5.5 SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Holder shall be enforceable to the fullest extent permitted by law.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant
Agreement to be duly executed and delivered, all as of the date and year first
above written.
ALPHA-BETA TECHNOLOGY, INC.
By: /s/ Joseph M. Grimm
------------------------------
Name: Joseph M. Grimm
Title: Chief Financial Officer
WORLD CAPITAL FUNDING, LLC
By: /s/ Keith Mazer
------------------------------
Name: Keith Mazer
Title: Managing Partner
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SCHEDULE I
Closing trade price on October 21, 1998: $1.09375 per share
<PAGE> 10
EXHIBIT A
FORM OF ELECTION TO PURCHASE
(To be executed if the Holder desires to
exercise the Warrant Agreement)
To ALPHA-BETA TECHNOLOGY, INC.:
The undersigned hereby irrevocably elects to exercise the Warrant
represented by the Warrant Agreement to purchase _______ shares of Common Stock
issuable upon the exercise of such Warrant and requests that certificates for
such shares be issued in the name of:
_____________________________________________________________________
(Please print name and address)
_____________________________________________________________________
Please insert social security or other identifying number ________________
Dated: _____________, 19__.
By: _________________________
Name:
Title:
<PAGE> 1
ARTHUR
ANDERSEN
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to incorporation by
reference in this Registration Statement of our report dated January 27, 1998,
included in Alpha-Beta Technology, Inc.'s Form 10-K for the year ended December
31, 1997 and to all references to our firm included in this Registration
Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Boston, Massachusetts
January 7, 1999
