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Exhibit 10.14
ACCESS BEYOND, INC.
STOCK PURCHASE AGREEMENT
MAY 2, 1997
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TABLE OF CONTENTS
Page
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1. Purchase and Sale ................................................... 1
2. Closing ............................................................. 1
3. Company Representations and Warranties .............................. 1
3.1 Organization and Standing .................................... 1
3.2 Corporate Power; Authorization ............................... 1
3.3 Purchased Shares ............................................. 2
3.4 Capitalization ............................................... 2
3.5 SEC Documents ................................................ 2
3.6 Absence of Changes ........................................... 3
3.7 Registration Rights .......................................... 4
4. Investor Representations and Warranties ............................. 4
4.1 Organization and Standing .................................... 4
4.2 Corporate Power; Authorization ............................... 5
4.3 Investment Experience ........................................ 5
4.4 Investment Intent ............................................ 5
4.5 Registration or Exemption Requirements ....................... 5
5. Conditions of Investor's Obligations at Closing ..................... 6
5.1 Representations and Warranties ............................... 6
5.2 Performance .................................................. 6
5.3 Compliance Certificate ....................................... 6
5.4 Qualifications ............................................... 6
5.5 Proceedings and Documents .................................... 6
5.6 Execution of Technology Agreements ........................... 6
5.7 Payment ...................................................... 6
5.8 Certificate of Transfer Agent ................................ 7
6. Conditions of the Company's Obligations at Closing .................. 7
6.1 Representations and Warranties ............................... 7
6.2 Performance .................................................. 7
6.3 Compliance Certificate ....................................... 7
6.5 Qualifications ............................................... 7
6.6 Execution of Technology Agreements ........................... 7
7. Covenants of the Company ............................................ 7
7.1 Shelf Registration ........................................... 7
7.2 Piggyback Registration ....................................... 9
7.3 Indemnification .............................................. 10
7.4 Right of First Offer ......................................... 12
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8. Covenants of Investor ............................................... 13
8.1 Company Purchase Right ....................................... 13
8.2 Limitation on Sale ........................................... 13
9. Miscellaneous ....................................................... 13
9.1 Survival of Warranties ....................................... 13
9.2 Successors and Assigns ....................................... 14
9.3 Governing Law ................................................ 14
9.4 Counterparts ................................................. 14
9.5 Titles and Subtitles ......................................... 14
9.6 Notices ...................................................... 14
9.7 Finder's Fee ................................................. 14
9.8 Expenses ..................................................... 15
9.9 Amendments and Waivers ....................................... 15
9.10 Severability ................................................. 15
9.11 Aggregation of Stock ......................................... 15
9.12 Entire Agreement ............................................. 15
9.13 Option to License QADM Technology ............................ 15
9.14 Arbitration .................................................. 16
EXHIBIT A 2290 Remote Access Gateway Technology Transfer Agreement
EXHIBIT B QADM Technology Transfer and AudioSpan(TM) Trademark License
Agreement
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the ____ day of May, 1997, by
and among Access Beyond, Inc., a Delaware corporation (the "the Company" or
"ABI"), and Paradyne Corporation, a Delaware corporation ("Investor" or
"Paradyne").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale Subject to the terms and conditions of this
Agreement, Investor agrees to purchase at the Closing and the Company agrees to
sell and issue to Investor at the Closing, five hundred three thousand seven
hundred four (503,704) shares of the Company's Common Stock (the "Purchased
Shares").
2. Closing. The purchase and sale of the Purchased Shares (the "Closing")
shall take place at the offices of Paradyne, 0000 000xx Xxxxxx Xxxxx, Xxxxx,
Xxxxxxx 00000, contemporaneously with the closing of the transactions set forth
in the Hawk Agreement (defined below) or at such other time and place as the
Company and Investor mutually agree upon orally or in writing (the "Closing
Date"). At the Closing, the Company shall deliver to Investor a certificate
representing the Purchased Shares Investor is purchasing against delivery by
Investor (including, but not limited to, the granting of the rights on the terms
and conditions as provided therein) of that certain 2290 Remote Access Gateway
("Hawk") Technology Transfer Agreement, including the attachments and exhibits
thereto, between Paradyne and ABI attached hereto as Exhibit A (the "Hawk
Agreement") (the "Related Agreements").
3. Company Representations and Warranties. The Company hereby represents
and warrants to Investor as of the Closing Date as follows:
3.1 Organization and Standing. The Company is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
Delaware and is in good standing as a domestic corporation under the laws of
said state and is qualified as a foreign corporation in all other jurisdictions
in which such qualification is required; provided, however, that the Company
need not be qualified in a jurisdiction in which its failure to qualify would
not have a material adverse effect on the business, properties, prospects or
financial condition of the Company.
3.2 Corporate Power; Authorization. The Company has all requisite
legal and corporate power and has taken all requisite corporate action to
execute and deliver this Agreement and the Related Agreements, to sell and issue
the Purchased Shares and to carry out and perform all of its obligations under
this Agreement and the Related Agreements. This Agreement and the Related
Agreements constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except (A) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, (B) as limited by laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies,
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and (C) to the extent the indemnification provisions contained herein may be
limited by applicable federal or state securities laws. The execution and
delivery of this Agreement and the Related Agreements does not, and the
performance of this Agreement and the Related Agreements and the compliance with
the provisions hereof and thereof and the issuance, sale and delivery of the
Purchased Shares by the Company will not materially conflict with, or result in
a breach or violation of the terms, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of any lien pursuant to
the terms of, the Certificate of Incorporation or Bylaws of the Company. The
execution and delivery of this Agreement does not, and the performance of this
Agreement and the compliance with the provisions hereof and the issuance, sale
and delivery of the Purchased Shares by the Company will not materially conflict
with, or result in a breach or violation of the terms, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
any lien pursuant to the terms of, any statute, law, rule or regulation or any
state or federal order, judgment or decree or any indenture, mortgage, lease or
other agreement or instrument to which the Company, or any of its properties, is
subject.
3.3 Purchased Shares. The Purchased Shares when issued in compliance
with the provisions of this Agreement will be duly and validly authorized,
issued, fully paid and nonassessable. Based on the representations and
warranties of Investor contained herein, the Purchased Shares when issued in
compliance with the provisions of this Agreement, will be issued in compliance
with federal and state securities laws. The issuance and delivery of the
Purchased Shares is not subject to preemptive or any other similar rights of the
stockholders of the Company or any liens or encumbrances.
3.4 Capitalization. The authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock, $0.01 par value, of which at
January 31, 1997, 11,989,587 shares were issued and outstanding and 3,000,000
shares of Preferred Stock, $0.01 par value, of which at July 31, 1997, no shares
were issued and outstanding. All such issued and outstanding shares have been
duly authorized and validly issued and are fully paid and nonassessable. In
addition to the foregoing, the Company has reserved and outstanding the
following warrants, options and convertible securities: (i) 2,250,000 shares
reserved for issuance pursuant to the Company's stock option plans, of which, at
January 31, 1997, no options to purchase had been exercised, options to purchase
1,105,000 shares were outstanding and 1,145,000 shares remained available for
future grant. Except for securities issued in the ordinary course of business
under the Company's stock plans, no additional securities of the Company will be
issued and outstanding as of the Closing Date. Except as described in this
Section 3.4 and except for Investor's right to purchase such amount of newly
issued securities of the Company in order to maintain its respective percentage
ownership, there are no other options, warrants, conversion privileges or other
contractual rights currently outstanding to purchase or otherwise acquire any
authorized but unissued shares of the Company's capital stock or other
securities.
3.5 SEC Documents. The Company has furnished the following
information to Investor: (A) the Registration Statement on Form S-1 of Access
Beyond, Inc. which became effective October 17, 1996; (B) the Report on Form
10-K of Penril DataComm
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Networks, Inc. and its wholly-owned subsidiaries for the year ended July 31,
1996; (C) the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended January 31, 1997; and (D) all other documents that the Company was
required to file, which it represents and warrants it did timely file with the
SEC under Section 13 or 14(a) of the Securities Act of 1934, as amended
("Exchange Act"), since October 17, 1996 (collectively, the "SEC Documents"). As
of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act or the Securities Act of
1933, as amended ("Securities Act"), as applicable. The SEC Documents as of
their respective dates did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the SEC Documents ("Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. Except as may be indicated in
the notes to the Financial Statements or, in the case of unaudited statements,
as permitted by Form 10-Q, the Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of the Company and any
subsidiaries at the dates thereof and the consolidated results of their
operations and consolidated cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal, recurring adjustments). The SEC
Documents, this Agreement, the exhibits and schedules hereto, and any
certificates or documents to be delivered to Investor pursuant to this
Agreement, when taken together, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which statements were made, not misleading.
3.6 Absence of Changes. Except as otherwise disclosed herein or in
the SEC Documents and the Financial Statements, since October 17, 1996, there
has not been:
(a) any changes in the assets, liabilities, financial
condition or operations of the Company from that reflected in the Financial
Statements except changes in the ordinary course of business which have not
been, either in any individual case or in the aggregate, materially adverse;
(b) any material change, except in the ordinary course of
business, in the aggregate contingent obligations of the Company, whether by way
of guarantee, endorsement, indemnity, warranty or otherwise;
(c) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties or business of the
Company;
(d) any declaration or payment of any dividend or other
distribution of the assets of the Company, or any stock split, stock dividend,
reclassification, reorganization, combination or the like;
(e) any labor organization activity;
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(f) any transfer or grant of a right other than in the
ordinary course of business or any material change in the patents, patent
applications, copyrights, trade secrets, trademarks, proprietary information,
proprietary rights, and processes necessary for the Company's business as
currently conducted without any conflict with or infringement of the rights of
others;
(g) any notification or communication received by the Company
alleging that the Company, by conducting its business as currently conducted,
would violate any of the patents, trademarks, service marks, trade names,
copyrights, or trade secrets or other proprietary rights of any other person or
entity (except for a claim by Xxxxxx & Xxxxxxxx, Inc. (the "H&J Claim") with
respect to certain software which will not have a material adverse effect on the
Company's assets, financial condition or business);
(h) any notification or communication received by the Company
that any of its employees or consultants is obligated under any contract
(including licenses, covenants, or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that is violated by or would materially interfere with
the current or prospective services provided to the Company by the employee or
consultant or the use of his best efforts to promote the interests of the
Company or that would materially conflict with the Company's business as
currently conducted and proposed to be conducted;
(i) any claim or legal action or other proceeding threatened
or brought before any court, any arbitrator of any kind or any administrative
agency, or any governmental investigation, which could have a material adverse
effect on the Company's business, financial condition or results of operations;
or
(j) any other event or condition of any character which has
materially and adversely affected the Company's assets, liabilities, financial
condition or operations or prospects.
3.7 Registration Rights. Except as provided for in Section 7 hereof,
the Company has not granted or agreed to grant any registration rights,
including piggyback rights, to any person or entity.
4. Investor Representations and Warranties. Investor hereby represents and
warrants to the Company as of the Closing Date as follows:
4.1 Organization and Standing. Paradyne is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
Delaware and is in good standing as a domestic corporation under the laws of
said state and is qualified as a foreign corporation in all other jurisdictions
in which such qualification is required; provided, however, that Paradyne need
not be qualified in a jurisdiction in which its failure to qualify would not
have a material adverse effect on the business, properties, prospects or
financial condition of Paradyne.
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4.2 Corporate Power; Authorization. Paradyne has all requisite legal
and corporate power and has taken all requisite corporate action to execute and
deliver the Agreement and the Related Agreements. This Agreement and the Related
Agreements constitute the legal, valid and binding obligations of Paradyne,
enforceable against Paradyne in accordance with their respective terms, except
(A) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement of creditors' rights
generally, (B) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (C) to the
extent the indemnification provisions contained herein may be limited by
applicable federal or state securities laws. The execution and delivery of this
Agreement and the Related Agreements does not, and the performance of this
Agreement and the Related Agreements and the compliance with the provisions
hereof will not materially conflict with, or result in a breach or violation of
the terms, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of any lien pursuant to the terms of, the
Certificate of Incorporation or Bylaws of Paradyne. The execution and delivery
of this Agreement does not, and the performance of this Agreement and the
compliance with the provisions hereof will not materially conflict with, or
result in a breach or violation of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any lien
pursuant to the terms of, or any statute, law, rule or regulation or any state
or federal order, judgment or decree or any indenture, mortgage, lease or other
agreement or instrument to which Paradyne, or any of its properties, is subject.
4.3 Investment Experience. Investor is an "accredited investor" as
defined in Rule 501 (a) under the Securities Act. Investor is generally aware of
the Company's business affairs and financial condition and has had access to and
has acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Purchased Shares. Investor has such
business and financial experience as is required to give it the capacity to
protect its own interests in connection with the purchase of the Purchased
Shares. Notwithstanding the foregoing, Investor shall be entitled to rely on the
representations and warranties of the Company in Section 3.
4.4 Investment Intent. Investor is purchasing the Purchased Shares
for investment for its own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the Securities
Act. Investor understands that the Purchased Shares have not been registered
under the Securities Act or registered or qualified under any state securities
law in reliance on specific exemptions therefrom, which exemptions may depend
upon, among other things, the bona fide nature of Investor's investment intent
as expressed herein.
4.5 Registration or Exemption Requirements. Investor further
acknowledges and understands that the Purchased Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an exemption
from such registration is available. Investor understands that the
certificate(s) evidencing the Purchased Shares will be imprinted with a legend
that prohibits the transfer of the Shares unless (i) they are registered or such
registration is not required, and (ii) if the transfer is pursuant to an
exemption from
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registration other than Rule 144 under the Securities Act, and, if the Company
shall so request in writing, an opinion of counsel satisfactory to the Company
is obtained to the effect that the transaction is so exempt. In addition,
Investor will refrain from selling, transferring or otherwise disposing of any
Purchased Shares, or any interest therein, in such manner as to cause the
Company to be in violation of the registration requirements of the Securities
Act or applicable state securities or blue sky laws. Investor further
acknowledges that the Purchased Shares will be imprinted with a legend stating
that: "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY."
5. Conditions of Investor's Obligations at Closing. The obligations of
Investor under this Agreement are subject to the fulfillment on or before the
Closing of each of the following conditions:
5.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 3 and in the Related Agreements
shall be true and correct on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the date
of such Closing.
5.2 Performance. The Company shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement and the
Related Agreements that are required to be performed or complied with by it on
or before the Closing.
5.3 Compliance Certificate. The President of the Company shall
deliver to Investor at the Closing a certificate stating that the conditions
specified in Sections 5.1 and 5.2 have been fulfilled and stating that there
shall have been no material adverse change in the business, affairs, operations,
properties, assets or condition of the Company since October 17, 1996.
5.4 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
5.5 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to special counsel to Investor, and such special counsel shall have
received all such counterpart original and certified or other copies of such
documents as they may reasonably request.
5.6 Execution of Technology Agreements. The Company shall have duly
executed and delivered the Related Agreements.
5.7 Payment. Investor shall have received at the Closing $25,000 per
Section 3.01(b) of the Hawk Technology Transfer Agreement between Paradyne and
ABI.
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5.8 Certificate of Transfer Agent. Investor shall have received a
certificate of the Company's transfer agent in a form reasonably satisfactory to
Investor, which certificate shall state that the Company has 30,000,000 shares
of Common Stock, $0.01 par value, and 3,000,000 shares of Preferred Stock, $0.01
par value authorized, and which shall state the outstanding capital stock of the
Company. The number of shares of Common Stock stated as issued and outstanding
in such certificate shall be approximately 11,989,587 shares, plus the Purchased
Shares and no shares of Preferred stock shall be stated as issued and
outstanding.
6. Conditions of the Company's Obligations at Closing. The obligations of
the Company to Investor under this Agreement are subject to the fulfillment on
or before the Closing of each of the following conditions by Investor:
6.1 Representations and Warranties. The representations and
warranties of Investor contained in Section 4 and in the Related Agreements
shall be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing.
6.2 Performance. The Company shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement and the
Related Agreements that are required to be performed or complied with by it on
or before the Closing.
6.3 Compliance Certificate. An officer of Paradyne shall deliver to
the Company at the Closing a certificate stating that the conditions specified
in Sections 6.1 and 6.2 have been fulfilled.
6.4 Qualifications. All authorizations, approvals, or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
6.5 Execution of Technology Agreements. Investor shall have duly
executed and delivered the Related Agreements.
7. Covenants of the Company
7.1 Shelf Registration.
(a) As soon as reasonably practicable after the Closing, the
Company shall prepare and file a registration statement with the SEC under the
Securities Act to register the resale of the Purchased Shares ("Registrable
Securities") and thereafter shall use its best efforts to secure the
effectiveness of such registration statement as soon as reasonably practicable
within one hundred twenty (120) days after the Closing. Notwithstanding the
foregoing, if ABI shall provide a certificate of its President or other
corporate officer to Paradyne (i) stating that ABI is continuing to diligently
attempt to secure the effectiveness of such registration statement as soon as
reasonably practicable and (ii) explaining the reasons why ABI cannot secure the
effectiveness of such registration statement within one hundred twenty (120)
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days after the Closing, then ABI's covenant to secure the effectiveness of such
registration statement as provided in this Section 7.1 shall be extended to not
more than one hundred eighty (180) days after the Closing so long as ABI
continues to diligently use its best efforts to secure the effectiveness of such
registration statement as soon as reasonably practicable.
(b) The Company shall pay all Registration Expenses (as
defined below) in connection with any such registration or any other
registration, qualification or compliance hereunder, and each holder of
Registrable Securities ("Holder") shall pay all Selling Expenses (as defined
below) and other expenses that are not Registration Expenses relating to the
Registrable Securities resold by such Holder. "Registration Expenses" shall mean
all expenses, except for Selling Expenses, incurred by the Company in complying
with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for any Holder.
(c) In the case of any registration effected by the Company
pursuant to these registration provisions, (x) the Company will use its best
efforts to: (i) keep such registration effective until the later of (A) twelve
(12) months after the Closing Date or (B) such date as the Company shall be
satisfied that the then-current Holders may sell all of the Registrable
Securities then held by each such Holder within a single three (3) month period;
(ii) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement; (iii) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request; (iv) use its
best efforts to register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holders (up to 5 such jurisdictions),
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions; (v) cause all such
Registrable Securities registered as described herein to be listed on each
securities exchange and quoted on each quotation service on which similar
securities issued by the Company are then listed or quoted; (vi) provide a
transfer agent and registrar for all Registrable Securities registered pursuant
to such registration statement and a CUSIP number for all Registrable
Securities; and (vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and (y) the Holders, severally,
shall promptly provide to the Company (and in any event within 10 days of
receipt of the written request therefor) all written information regarding the
Holders and the Registrable Securities as the Company shall reasonably request
and as is required to be included in the Registration Statement with respect to
the Holders.
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(d) The right to sell Registrable Securities pursuant to the
registration statement described herein will automatically be assigned to each
transferee of Registrable Securities (subject to Section 9.2 hereof). In the
event that it is necessary, in order to permit a Holder to sell Registrable
Securities pursuant to the Company's registration statement, to amend the
registration statement to name such Holder, such Holder shall, upon written
notice to the Company, be entitled to have the Company make such amendment as
soon as reasonably practicable. Notwithstanding the above provisions relating to
Registration Expenses, in the event that such an amendment is requested the
Holder shall, at the request of the Company, be obligated to reimburse the
Company for reasonable Registration Expenses incurred by it in connection with
such amendment.
(e) With a view to making available to the holders the
benefits of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell Registrable
Securities to the public without registration or pursuant to a registration on
Form S-3, the Company hereby covenants and agrees to use its best efforts to:
(i) make and keep public information available, as those terms are understood
and defined in Rule 144, at all times after the closing; (ii) file with the SEC
in a timely manner all reports and other documents required of the Company under
the Securities Act and Exchange Act; and (iii) furnish to any Holder, as long as
the Holder owns any Registrable Securities forthwith upon request, (A) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, the Securities Act and the Exchange Act, (B) a copy of the most recent
annual or quarterly report of the Company, and (C) such other information as may
be reasonably requested in order to avail any Holder of any rule or regulation
of the SEC that permits the selling of any such Registrable Securities without
registration or pursuant to such Form S-3.
7.2 Piggyback Registration. For the period from the Closing until
the registration statement provided for in Section 7.1(a) hereof shall become
effective, and thereafter during any period that ABI is required to keep such
registration statement effective and such registration statement is not
effective, if (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for
stockholders other than Investor) any of its stock or other securities under the
Securities Act in connection with the public offering of such securities solely
for cash (other than a registration relating solely to the sale of securities to
participants in a Company stock plan, a registration on any form which is not
available for the resale of the Registrable Securities, a registration statement
on Form S-4 or any successor form, or a registration in which the only Common
Stock being registered is Common Stock issuable upon conversion of debt
securities which are also being registered), the Company shall, at such time,
promptly give each Holder written notice of such registration. Upon the written
request of any Holder given within ten (10) days after mailing of such notice by
the Company, the Company shall cause to be registered under the Securities Act
all of the Registrable Securities that each such Holder has requested to be
registered. In connection with any such registration which involves the
underwritten offering of the Company's securities, the Company shall not be
required to include any Holder's securities under such registration statement
unless such Holder agrees to enter into an underwriting agreement in the form
agreed upon between the Company and the underwriters selected by it (or
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by other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder or in such other proportions as shall mutually be agreed to
by such selling stockholders).
7.3 Indemnification.
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Securities
Act) for such Holder, its officers, directors, shareholders or partners and each
person, if any, who controls such Holder or underwriter within the meaning of
the Securities Act or the Exchange Act against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (A) any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (B) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (C) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law; and the Company will pay to each
such Holder (limited to Paradyne), underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section 7.3(a) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling person of any such underwriter or other Holder, against any losses,
claims, damages, or liabilities (joint or several) to which any of the foregoing
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persons may become subject, under the Securities Act, the Exchange Act or over
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any person intended to be indemnified pursuant to this Section 7.3(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 7.3(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this Section 7.3(b) exceed
the net proceeds from the offering received by such Holder, expect in the case
of willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 7.3(c) of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 7.3(c), deliver
to the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 7.3(c), but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 7.3(c).
(d) If the indemnification provided for in this Section 7 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, that, in no event shall any contribution by a Holder
under this Section 7.3(d) exceed the net proceeds from the offering received by
such Holder, except in the case of willful fraud by such Holder. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among over things, whether the untrue or alleged
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untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) The obligations of the Company and Holders under this
Section 7 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Section 7, and otherwise.
7.4 Participation Right. Subject to the terms and conditions
specified in this Section 7.4, the Company hereby grants to Investor a right to
participate with respect to future sales by the Company of its Shares (as
hereinafter defined); provided that such sale is: (i) at a per share price at or
below $3.375 (as adjusted for any stock splits, dividends, combinations,
reclassifications or the like) and (ii) not a public sale effected through an
underwriter, broker or dealer in a market transaction. Subject to the foregoing,
each time during the thirty (30) month period beginning on the Closing Date that
the Company proposes to offer any shares of, or securities convertible into or
exercisable for, any shares of any class of its capital stock ("Shares"), the
Company shall first make an offering of such Shares to Investor in accordance
with the following provisions:
(a) the Company shall deliver a notice by certified mail
("Notice") to Investor stating (i) its bona fide intention to offer such Shares,
(ii) the number of such Shares to be offered, (iii) the price and terms, if any,
upon which it proposes to offer such Shares and (iv) the number of Shares that
Investor has the right to purchase under this Section 7.4.
(b) By written notification received by the Company, within 5
business days after giving of the Notice, Investor may elect to purchase or
obtain, at the price and on the terms specified in the Notice, up to that
portion of such Shares that equals the proportion that the number of shares of
Common Stock issued and held by Investor bears to the total number of shares of
Common Stock of the Company then outstanding (assuming full conversion and
exercise of all convertible or exercisable securities). Any such election shall
be irrevocable written notice with respect to such offer only and failure to
give such notice within such time period shall be an irrevocable waiver of such
election right with respect to such offer only.
(c) If all Shares which Investor is entitled to obtain
pursuant to Section 7.4 are not elected to be obtained, then the Company may,
during the 90-day period following the expiration of the period provided in
Section 7.4(b) hereof, offer the remaining unsubscribed portion of such Shares
to any person or persons at a price not less than, and upon terms no more
favorable to the offeree than those specified in the Notice. If the Company does
not enter into an agreement for the sale of the Shares within such period, or if
such agreement is not consummated within 90 days of the execution thereof, the
right provided hereunder shall be deemed to be revived and such Shares shall not
be offered unless first reoffered to Investor in accordance herewith.
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(d) The participation right in this Section 7.4 shall not be
applicable (i) to the issuance or sale of shares of common stock (or options
therefor) to employees, consultants or directors of the Company for the primary
purpose of soliciting or retaining their employment or services and (ii) to the
issuance of securities pursuant to the conversion or exercise of convertible or
exercisable securities, provided the convertible or exercisable securities (if
issued after the date hereof) were subject to or exempt from the right of
participation set forth herein.
8. Covenants of Investor
8.1 Company Purchase Right. For the twenty four (24) month period
beginning on the Closing Date, (i) if the Company's Common Stock shall continue
to be designated for listing on the Nasdaq National Market and (ii) if Holder
shall propose to sell Registrable Securities in a public market transaction
effected through a market maker in such stock on the Nasdaq National Market (not
including any managed or otherwise negotiated sale), then Holder shall notify
the Company by telephone or facsimile (addressed to the Chief Financial Officer
of the Company, which notice shall be deemed to be effective upon transmission
thereof) of its intent to do so at least two (2) full trading days prior to such
sale. Within such two (2) day period, the Company or such party as the company
may designate, subject to Investor's approval which shall not be unreasonably
withheld, shall have the right to purchase such Registrable Securities (by
irrevocable delivery of the purchase price therefor) at a purchase price equal
to the highest reported sale price for the Company's Common Stock on the Nasdaq
National Market during such two (2) day period.
8.2 Limitation on Sale. Unless waived by the Company, Investor
hereby agrees that it shall not, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to
transferees and donees who agree to be similarly bound as provided in Section
9.2 hereof) to any purchaser in a public sale effected through an underwriter,
broker or dealer in a market transaction ("Public Sale") any securities of the
Company held by it except as follows: (A) on or prior to the first anniversary
of the Closing Date, up to fifty percent (50%) of the Purchased Shares, (B)
after the second anniversary of the Closing Date, any Purchased Shares not sold
pursuant to clause (A) and up to an additional twenty five percent (25%) of the
Purchased Shares, and (C) after the third anniversary of the Closing Date, any
Purchased Shares not sold pursuant to clauses (A) and (B) and up to an
additional twenty five percent (25%) of the Purchased Shares. A "Public Sale"
shall not include any sale and purchase of Purchased Shares in a private
transaction so long as such purchaser agrees to be bound by the terms and
conditions of this Agreement.
9. Miscellaneous.
9.1 Survival of Warranties. The warranties, representations and
covenants of the Company and Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be
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affected by any investigation of the subject matter thereof made by or on behalf
of Investor or the Company.
9.2 Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Purchased Shares); provided, however, that this agreement
shall not be binding upon nor inure to the benefit of any purchaser of the
Purchased Shares pursuant to a Public Sale. Further (subject to compliance with
applicable federal and state securities laws), Paradyne shall have the right to
transfer all or part of the Purchased Shares and to assign this Agreement and to
assign its rights and delegate its duties under this Agreement to (i) any
present or future affiliate (including any subsidiary or affiliated entity
thereof) of Paradyne and/or (ii) any unaffiliated new entities that may be
formed by Paradyne pursuant to a corporate reorganization, including any
subsidiary or affiliated entity thereof, and/or (iii) any successor in interest
or affiliate thereof to all or part of the business or assets of Paradyne and/or
(iv) any other party with the consent of ABI, which consent shall not
unreasonably be withheld (any of the foregoing, an "Assignment"). Upon the date
of any Assignment and to the extent of the Assignment, Paradyne shall be
released and discharged from all further duties under this Agreement. Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
9.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware, without
reference to Delaware conflict of laws provisions.
9.4 Counterparts. This Agreement 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.
9.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
9.7 Finders' Fee. Each party represents that it neither is nor will
be obligated for any finders' fee or commission in connection with this
transaction. Investor agrees to indemnify and to hold harmless the Company from
any liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against
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such liability or asserted liability) for which such Investor or any of its
officers, partners, employees, or representatives is responsible. The Company
agrees to indemnify and hold harmless Investor from any liability for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.
9.8 Expenses. Irrespective of whether the Closing is effected, the
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. Irrespective
of whether the Closing is effected, the Investor shall pay all costs and
expenses that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement or the Related Agreements, the
prevailing party shall be entitled to reasonable attorneys' fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
9.9 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investor. Any
amendment or waiver effected in accordance with this Section 9.9 shall be
binding upon each holder of any securities purchased under this Agreement at the
time outstanding (including securities into which such securities are
convertible), each future holder of all such securities, and the Company.
9.10 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
9.11 Aggregation of Stock. All shares of the Purchased Shares held
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
9.12 Entire Agreement. This Agreement and the documents referred to
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any other party in any manner by any warranties,
representations, or covenants except as specifically set forth herein or
therein.
9.13 Option to License QADM Technology. At the election of the
Company at the Closing, or at any time thereafter until the first anniversary of
the Closing upon ten (10) business days prior written notice to Investor,
Investor and the Company shall execute that certain QADM Technology Transfer and
AudioSpan Trademark License Agreement in substantially the form attached hereto
as Exhibit C (the "QADM Agreement") whereby, inter alia, Investor shall grant to
the Company the license set forth in Article I thereof, subject to the terms,
conditions and obligations of the parties therein. Upon execution and delivery
of the QADM Agreement, the Company shall deliver to Investor four hundred
thousand dollars ($400,000) payable in cash. If the Hawk Agreement shall
terminate for any reason prior to the
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exercise of the option granted in this Section 9.13, pursuant to Article VI of
the Hawk Agreement or otherwise, then the option granted in this Section 9.13
shall terminate on the date of such termination and shall be of no further force
of effect. If the Company shall sell, transfer or assign its rights under the
Hawk Agreement in accordance with the provisions thereof, then the option
granted in this Section 9.13 shall be assigned to and may be exercised by such
purchaser, transferee or assignee. Except as expressly provided in this Section
9.13, the rights and obligations of the Company and Investor with respect to the
subject matter of the QADM Agreement shall be governed by the QADM Agreement.
9.14 Arbitration. Any dispute arising hereunder shall be resolved
according to the provisions of Article 7.17 of the Hawk Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ACCESS BEYOND, INC.
By: ____________________________________
Address: 0000 Xxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
PARADYNE CORPORATION
By: ____________________________________
Address: 0000 000xx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
21
AMENDMENT NO. 1 TO
ACCESS BEYOND, INC.
STOCK PURCHASE AGREEMENT
This Agreement ("Agreement") is made as of September ___, 1997, by and
among Access Beyond, Inc., a Delaware corporation (the "the Company" or "ABI"),
and Paradyne Corporation, a Delaware corporation ("Investor" or "Paradyne").
Capitalized terms not otherwise defined herein shall have the meaning assigned
to them in that certain Access Beyond, Inc. Stock Purchase Agreement between the
Company and the Investor dated as of May 2, 1997 (the "Stock Purchase
Agreement").
RECITALS
WHEREAS, the Company and the Investor wish to amend certain provisions of
the Stock Purchase Agreement with respect to: (i) the Company's obligation to
file a registration statement covering Investor's shares of the Company's Common
Stock; (ii) the Company's right of first offer; and (iii) the lock-up
restrictions on Investor's shares of the Company's Common Stock.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Amendment of Shelf Registration Provisions.
1.1. Section 7.1(a). Section 7.1(a) of the Stock Purchase Agreement
shall be amended and restated in its entirety to read as follows:
"(a) As soon as reasonably practicable after the date hereof,
but in any event no later than November 7, 1997, the Company shall prepare and
file a registration statement with the SEC under the Securities Act to register
the resale of the Purchased Shares ("Registrable Securities") and thereafter
shall use its best efforts to secure the effectiveness of such registration
statement as soon as reasonably practicable but in any event no later than
December 31, 1997."
1.2. Section 7.1(c). Section 7.1(c) shall be amended and restated in
its entirely to read as follows:
"(c) In the case of any registration effected by the Company
pursuant to these registration provisions, (x) the Company will use its best
efforts to: (i) keep such registration effective until the later of (A) eight
(8) months after the date such registration statement is declared effective or
(B) such date as the Company shall be satisfied that the then current Holders
may sell all of the Registrable Securities then held by each such Holder within
a single three (3) month period; (ii) prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be
22
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement; (iii)
furnish such number of prospectuses and other documents incident thereto,
including any amendment of or supplement to the prospectus, as a Holder from
time to time may reasonably request; (iv) use its best efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders (up to 5 such jurisdictions), provided that the Company
shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any
such states or jurisdictions; (v) cause all such Registrable Securities
registered as described herein to be listed on each securities exchange and
quoted on each quotation service on which similar securities issued by the
Company are then listed or quoted; (vi) provide a transfer agent and registrar
for all Registrable Securities registered pursuant to such registration
statement and a CUSIP number for all Registrable Securities; and (vii) otherwise
use its best efforts to comply with all applicable rules and regulations of the
SEC and (y) the Holders, severally, shall promptly provide to the Company (and
in any event within 10 days of receipt of the written request therefor) all
written information regarding the Holders and the Registrable Securities as the
Company shall reasonably request and as is required to be included in the
Registration Statement with respect to the Holders."
2. Amendment of Covenants of Investor.
2.1. Section 8.1. Section 8.1 of the Stock Purchase Agreement shall
be amended and restated in its entirety to read as follows:
"8.1 Notice of Sale. For the twenty four (24) month period
beginning on the Closing Date, (i) if the Company's Common Stock shall continue
to be designated for listing on the Nasdaq National Market and (ii) if Holder
shall propose to sell Registrable Securities in a public market transaction
effected through a market maker in such stock on the Nasdaq National Market (not
including any managed or otherwise negotiated sale), then Holder shall notify
the Company by telephone or facsimile (addressed to the Chief Financial Officer
of the Company, which notice shall be deemed to be effective upon transmission
thereof) of its intent to do so at least two (2) full trading days prior to such
sale."
2.2. Section 8.2. Section 8.2 of the Stock Purchase Agreement shall
be amended and restated in its entirety to read as follows:
"8.2 Limitation on Sale. Unless waived by the Company,
Investor hereby agrees that it shall not, directly or indirectly sell, offer to
sell, contract to sell (including, without limitation, any short sale), grant
any option to purchase or otherwise transfer or dispose of (other than to
transferees and donees who agree to be similarly bound as provided in Section
9.2 of the Purchase Agreement) to any purchaser in a public sale effected
through an underwriter, broker or dealer in a market transaction ("Public Sale")
any securities of the Company held by it except as follows: (A) on or prior to
the first anniversary of the Closing Date, up to fifty percent (50%) of the
Purchased Shares, and (B) after the first anniversary of the Closing Date, any
of the Purchased
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Shares. A "Public Sale" shall not include any sale and purchase of Purchased
Shares in a private transaction so long as such purchaser agrees to be bound by
the terms and conditions of this Agreement."
3. Counterparts. This Agreement 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 have executed this Agreement as of the
date first above written.
ACCESS BEYOND, INC.
By: /s/Xxxxxx Xxxxxx
----------------------------------------
Address:1300 Xxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
PARADYNE CORPORATION
By: /s/Xxxxx Xxxxxxxx
----------------------------------------
Address: 0000 000xx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 000000
3
