SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 21, 1998
PaperClip Software, Inc.
Exact name of registrant as specified in its charter)
Delaware 0-26598 22-313-7907
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
611 Route 46, Hasbrouck Heights, New Jersey 07604 (Address of principal
executive offices)(Zip Code)
Registrant's telephone number, including area code: (201) 329-6300
NOT APPLICABLE
(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On May 21, 1998, PaperClip Software, Inc. (the "Company"), PaperClip
Acquisition Corp. and Access Solutions International, Inc. ("Access Solutions")
entered into an agreement to amend the existing Merger Agreement between the
parties to, among other things, extend the expiration date for the consummation
of the Company's previously announced merger with and into a newly formed
wholly-owned subsidiary of Access Solutions until August 24, 1998. The Company
and Access Solutions also entered into agreements to amend (i) the Management
Agreement between the Company and Access Solutions to extend the date on which
amounts owed by the Company to Access Solutions pursuant to the Management
Agreement are due, until August 24, 1998, and (ii) the Company's Promissory Note
to Access Solutions to extend the maturity date of the Promissory Note until
August 24, 1998. Each such agreement is annexed hereto as an exhibit.
On May 27, 1998, the Company and Access Solutions issued a joint press
release (the "Press Release") annexed as an exhibit hereto. The Press Release is
incorporated herein by reference.
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
10.28 Tenth Amendment to Agreement and Plan of Merger between
PaperClip Software, Inc., PaperClip Acquisition Corp. and
Access Solutions International, Inc., dated as of April 22,
1998.
10.29 Second Amendment to Management Agreement between PaperClip
Software, Inc. and Access Solutions International, Inc.,
dated as of April 22, 1998.
10.30 Tenth Amendment to Convertible Promissory Note between
PaperClip Software, Inc. and Access Solutions International,
Inc. dated as of April 22, 1998.
99.1 Joint Press Release of PaperClip Software, Inc. and
Access Solutions, Inc. dated May 27, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
PAPERCLIP SOFTWARE, INC.
By:/S/William Weiss
Name: William Weiss
Title: Chief Executive Officer
Date: June 5, 1998
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INDEX TO EXHIBITS
Exhibit No. Page No.
10.28 Tenth Amendment to Agreement and
Plan of Merger between PaperClip
Software, Inc., PaperClip Acquisition
Corp. and Access Solutions
International, Inc., dated as
of April 22, 1998. 6
10.29 Second Amendment to Management
Agreement between PaperClip
Software, Inc. and Access Solutions
International, Inc.,
dated as of April 22, 1998. 11
10.30 Tenth Amendment to Convertible
Promissory Note between PaperClip
Software, Inc. and Access Solutions
International, Inc. dated as of
April 22, 1998. 13
99.1 Joint Press Release of PaperClip
Software, Inc. and Access
Solutions, Inc. dated May 27, 1998. 15
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TENTH AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS TENTH AMENDMENT is made as of the 22nd day of April, 1998, by and
between ACCESS SOLUTIONS INTERNATIONAL, INC., a Delaware corporation ("Parent"),
PAPERCLIP SOFTWARE, INC., a Delaware corporation ("PSI"), and PAPERCLIP
ACQUISITION CORP., a Delaware corporation and wholly-owned subsidiary of Parent
("Acquisition"). Parent and Acquisition are hereinafter sometimes referred to
collectively as "Access."
W I T N E S S E T H:
WHEREAS, Parent, Acquisition and PSI executed and delivered a certain
Agreement and Plan of Merger dated as of November 12, 1997, as amended by a
certain First Amendment to Agreement and Plan of Merger dated January 8, 1998
("First Amendment"), Second Amendment to Agreement and Plan of Merger dated
February 20, 1998, Third Amendment to Agreement and Plan of Merger dated
February 27, 1998, Fourth Amendment to Agreement and Plan of Merger dated March
3, 1998, Fifth Amendment to Agreement and Plan of Merger dated March 4, 1998,
Sixth Amendment to Agreement and Plan of Merger dated March 6, 1998, Seventh
Amendment to Agreement and Plan of Merger dated March 10, 1998, Eighth Amendment
to Agreement and Plan of Merger dated March 12, 1998, and Ninth Amendment to
Agreement and Plan of Merger dated as of March 24, 1998 (as amended, the "Merger
Agreement"), pursuant to which Acquisition will merge with and into PSI on the
terms and conditions set forth therein; and
WHEREAS, the parties hereto now desire to amend the Merger Agreement to
reflect their agreement that the deadline for Closing be further extended and to
reflect certain other agreements among the parties.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Section 10.1(f) of the Merger Agreement is hereby amended to read as
follows: "At the election of Access or PSI, if the Closing shall not have taken
place on or before the earlier of: (i) May 20, 1998,
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or (ii) the consummation of the financing contemplated by the Term Sheet dated
as of April 14, 1998 between the Company and Malcolm G. Chace ("Financing")."
2. The parties further agree that, effective upon the Parent's receipt of
$750,000 from the Financing, Section 10.1(f) of the Merger Agreement is hereby
amended to read as follows:
"At the election of Access or PSI, if the Closing shall not have taken
place on or before August 24, 1998 (or such later date as may be agreed to in
writing by Access and PSI)."
3. Notwithstanding the provisions of the Management Agreement, from the
date of the Financing through termination of this Agreement or the Closing Date,
no cash proceeds of the Financing may be spent by Parent or PaperClip without
the consent of both Robert H. Stone, the President and CEO of Parent, and
Stephen Kornfeld; provided, however, that no such approval is required for
payments for payroll, payroll taxes, sales taxes and Director & Officer
liability insurance for either Parent or PSI, and that best efforts will be made
on payments required under forbearance agreements and other payments deemed
essential for the continuing operation of the business or those necessary to
preserve the corporate entity. If a dispute arises between Messrs. Stone and
Kornfeld regarding the amount or timing of a specific expenditure, it will be
brought to the Chairman of the Board of Parent for resolution.
4. Section 8.11 of the Merger Agreement is hereby amended by deleting the
existing Section 8.11 and by substituting the following paragraph:
"SECTION 8.11 Financing. Parent shall have received at least two
million dollars ($2,000,000), or a commitment to raise at least Two
Million Dollars ($2,000,000) reasonably satisfactory to PSI (in either
case before deduction of expenses or placement fees or commissions)
from a private placement of Parent's securities or other source of
financing; provided, however, that PSI agrees that, if at least
$650,000 of the proceeds of the financing
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contemplated by the Term Sheet dated as of April 14, 1998 between
Parent and Malcolm G. Chace is converted into equity of Parent, the
amount to be raised or the commitment shall be reduced to $1,900,000.
5. PSI agrees to use its best efforts to file as soon as practicable with
the SEC all reports and filings required to be filed with the SEC pursuant to
the Securities Act, the Exchange Act, and any other applicable federal
securities laws, unless ASI consents otherwise from time to time.
6. The first sentence of Section 10.2 of the Merger Agreement is hereby
amended by substituting the following language for the last clause of said
sentence: "and provided, further, that if this Agreement is terminated: (a) by
either party pursuant to Section 10.1 of this Agreement: (i) due to failure to
obtain the Access Director Approval or the Access Stockholder approval (if
applicable), or (ii) due to the failure of the condition contained in Section
8.11 of this Agreement, or (b) by Parent pursuant to Section 10.1(f) of this
Agreement, then in any such case, Parent will negotiate in good faith with PSI
an extension of the Maturity Date (as defined in the Convertible Promissory Note
dated January 29, 1997, as amended, issued by PSI), and of the date for
repayment of the Management Fee, the Out-of-Pocket Expenses, and the Advances
and any interest thereon(as defined in the Management Agreement between Parent
and PSI dated as of April 15, 1997, as amended) to permit PSI a sufficient
amount of time to secure capital necessary to continue its business and to pay
amounts due to Parent in a reasonable time period."
7. Section 3.2 of the Merger Agreement is hereby amended to read as
follows:
Effective upon the Closing Date, the Board of Directors of Parent
shall be reconstituted to consist of four persons designated by PSI
(who initially shall be Stephen Kornfeld, William Weiss and two persons
designated by PSI prior to the Closing Date) and four persons
designated by ASI (who initially shall be Thomas Gardner, Adrian
Hancock, Howard Yenke and Robert Stone).
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8. The following new Section 3.3 is hereby added to the Merger Agreement
SECTION 3.3 Parent Officers.
Effective upon the Closing Date, Parent's Board of Directors
shall elect Stephen Kornfeld as Chairman of Parent, and Robert H. Stone
as President of Parent.
9. Section 2.2(c) of the Merger Agreement is hereby amended to read as
follows:
"At the Effective Time, Parent will offer stock options to PSI
employees who continue to be employed by Parent or the Surviving
Corporation in the amounts set forth on Schedule 2.2(c) attached
hereto."
10. The third sentence of Section 2.4(e) of the Merger Agreement is hereby
amended by deleting the existing sentence and substituting the following
sentence therefor:
"As soon as practicable after the Effective Time, the Parent
shall cause the Exchange Agent to send a notice and a transmittal form
to each holder of record of a Certificate advising such holder of the
effectiveness of the Merger and the procedure for surrendering to the
Exchange Agent such Certificate in exchange for the Merger
Consideration."
11. Section 6.13 of the Merger Agreement is hereby amended by deleting said
section and by substituting the following therefor:
"SECTION 6.13 Intentionally omitted."
12. Section 11.1 of the Merger Agreement is hereby amended by deleting said
section and by substituting the following therefor:
"SECTION 11.1 Intentionally omitted."
13. In the event of a conflict between the terms of the Merger Agreement
and this Tenth Amendment, the
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terms of this Tenth Amendment shall control.
14. This Tenth Amendment supersedes and replaces the Second through Ninth
Amendments, and all other prior agreements among the parties with respect to its
subject matter.
15. Except as modified and amended hereby, the Merger Agreement, as modified
by the First Amendment and this Tenth Amendment shall remain in full force and
effect and is in all other respects ratified and confirmed.
16. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year indicated above.
ACCESS SOLUTIONS INTERNATIONAL, INC.
By: /S/ Robert H. Stone
Robert H. Stone,
President and CEO
PAPERCLIP SOFTWARE, INC.
By: /S/ William Weiss
William Weiss,
Chief Executive Officer
PAPERCLIP ACQUISITION CORP.
By: /S/ Robert H. Stone
Robert H. Stone,
President and CEO
Page 10 of 16
SECOND AMENDMENT TO MANAGEMENT AGREEMENT
THIS AMENDMENT is made as of the 22nd day of April, 1998, by and
between ACCESS SOLUTIONS INTERNATIONAL, INC., a Delaware corporation having an
address at 650 Ten Rod Road, North Kingstown, Rhode Island 02852 (the "Manager")
and PAPERCLIP SOFTWARE, INC., a Delaware corporation having an address at Three
University Plaza, Hackensack, New Jersey 07601 (the "Owner").
W I T N E S S E T H T H A T:
WHEREAS, Owner and Manager executed and delivered a certain Management
Agreement dated as of April 15, 1997, as amended by a First Amendment to
Management Agreement dated as of November 12, 1997 (the "Management Agreement),
pursuant to which Manager is managing the day-to-day operations of Owner pending
the Merger of Owner into a wholly-owned subsidiary of Manager; and
WHEREAS, the parties hereto now desire to further amend the Management
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Section 4.3 of the Management Agreement is hereby amended by
substituting "August 24, 1998" for "May 31, 1998."
2. Except as modified and amended hereby, the Management Agreement
shall remain in full force and effect and is in all other respects ratified and
confirmed.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year indicated above.
MANAGER:
ACCESS SOLUTIONS INTERNATIONAL, INC.
By: /S/ Robert H. Stone
Robert H. Stone,
President and CEO
OWNER:
PAPERCLIP SOFTWARE, INC.
By: /S/ William Weiss
William Weiss,
Chief Executive Officer
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TENTH AMENDMENT TO CONVERTIBLE PROMISSORY NOTE
THIS TENTH AMENDMENT is made as of the 22nd day of April, 1998, by and
between ACCESS SOLUTIONS INTERNATIONAL, INC., a Delaware corporation having an
address at 650 Ten Rod Road, North Kingstown, Rhode Island 02852 (the "Lender")
and PAPERCLIP SOFTWARE, INC., a Delaware corporation having an address at 611
Route 46, Hasbrouck Heights, New Jersey 07604 (the "Borrower").
W I T N E S S E T H T H A T:
WHEREAS, the Borrower executed and delivered to the Lender a certain
Convertible Promissory Note dated January 29, 1997, as amended on January 8,
1998, February 20, 1998, February 27, 1998, March 3, 1998, March 4, 1998, March
6, 1998, March 10, 1998, March 12, 1998, and March 24, 1998 in the principal
amount of $300,000, which Note is hereby incorporated by reference herein and
made a part hereof (as amended, the "Note"); and
WHEREAS, the parties desire to further extend the maturity date of
the Note; and
WHEREAS, the parties hereto desire to amend the Note in the manner
hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The "Maturity Date" (as defined in Section 4 of the Note) is
hereby extended from April 22, 1998 to the earlier of: (a) May 15, 1998, or (b)
consummation of the financing contemplated by the Term Sheet dated as of April
14, 1998 between the Company and Malcolm G. Chace.
2. The parties further agree that, effective upon Lender's receipt of
$750,000 from the Financing, the "Maturity Date" is hereby further extended to
"August 24, 1998."
3. Security for the Note is evidenced by, among other things, a
Security Agreement dated as of January 29, 1997, and UCC financing statements
filed with the
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New Jersey Secretary of State ("Security Instruments"). All references to the
Note in the Security Instruments shall be deemed to include this amendment to
the Note and any other amendments which may be executed.
4. Except as modified and amended hereby, the Note shall remain in
full force and effect and is in all other respects ratified and confirmed.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year indicated above.
LENDER: BORROWER:
ACCESS SOLUTIONS PAPERCLIP SOFTWARE, INC.
INTERNATIONAL, INC.
By:/S/ Robert H. Stone By: /S/ William Weiss
Title:President and CEO Title:CEO
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FOR IMMEDIATE RELEASE: May 27, 1998
CONTACT: Denis Marchand
VP - Finance & Administration
Access Solutions International, Inc.
401-295-2691
Bill Weiss
CEO
PaperClip Software Inc.
201-329-6300
ACCESS SOLUTIONS ANNOUNCES COMPLETION OF
INTERIM FINANCING
ACCESS SOLUTIONS AND PAPERCLIP SOFTWARE ANNOUNCE EXTENSION OF MERGER AGREEMENT
North Kingstown, RI and Hasbrouck Heights, NJ - Access Solutions International,
Inc. (NASDAQ: ASIC) announced today that it has completed an interim financing
totaling $750,000. The consummation of this agreement is the first step in the
company's previously announced plan to raise additional equity funding.
Financing
The financing agreement calls for the purchase of a minority interest in several
of the company's patents by Mr. Malcolm G. Chace, a stockholder and former
director, for $100,000. These patents are the subject of a lawsuit pending in
the United States District Court for the District of Rhode Island. In addition,
Mr. Chace also has loaned the company $650,000, and has agreed to make
additional advances in amounts equal to outstanding and future legal fees and
costs incurred in connection with the lawsuit.
The loan is secured by a first priority interest in these patents and bears
interest at the rate of 19%. The loan has a term of the lesser of three years or
completion of the company's patent litigation and converts to a demand note at
the end of its term.
The loan also is convertible into equity under certain circumstances. The
company is presently talking with several parties regarding establishment of a
financing or strategic relationship including a future financing of between $2
and $4 million to meet the obligations of the merger agreement and to address
the company's cash flow requirements.
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The company's current plan is to seek at least $2 million of additional
financing in the quarter ending September 30, 1998. Mr. Chace has agreed to
convert his $650,000 loan into equity in the event he is satisfied with the
terms of such financing and upon the satisfaction of certain other conditions.
There can be no assurance that additional funds can be obtained on acceptable
terms, if at all.
Extension of Merger Agreement
Access Solutions and PaperClip Software Inc. (OCCBB:PCLP) also announced that
their merger agreement has been amended to extend the date for the consummation
of PaperClip's previously announced merger with and into a newly formed
wholly-owned subsidiary of Access Solutions. Pursuant to the terms of the merger
agreement, completion of the merger transaction is subject to certain
conditions, including a financing contingency. Because the financing contingency
has not been satisfied, the merger transaction has not been consummated, and the
merger agreement has been amended to allow more time for the financing condition
to be satisfied. The latest agreement calls for an extension to August 24, 1998.
There can be no assurance that the financing condition will be satisfied or that
the merger transaction will be consummated.
PaperClip Software, Inc., founded in 1991, develops and distributes computer
software for document management and imaging systems. Access Solutions
International, Inc., founded in 1986, designs, develops, assembles and markets
mainframe information storage and retrieval systems, including both hardware and
software, for large companies.
# # #
NOTE: Any statements released by Access Solutions International, Inc. that are
forward looking are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Editors and investors are cautioned
that forward-looking statements involve risks and uncertainties, which may
affect the company's business prospects and performance. These include economic,
competitive, governmental, technological and other factors discussed in the
company's filings with the SEC on forms 10-KSB and 10-QSB.
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