Exhibit 99.1
THE SECURITIES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAW AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL THAT SUCH REGISTRATION
STATEMENT IS NOT REQUIRED UNDER THE
SECURITIES ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER OR UNDER
APPLICABLE STATE SECURITIES LAWS.
$______________
ACCESS WORLDWIDE COMMUNICATIONS, INC.
CONVERTIBLE PROMISSORY NOTE
AUGUST 31, 2005
1. ACCESS
WORLDWIDE COMMUNICATIONS, INC., a Delaware corporation (along
with its subsidiaries, the "Company"),
promises to grant to ____________________
(the "Holder") _____________________ shares
of Company Common Shares, par value
$0.01 (the "Common Stock") within sixty
(60) days of the Conversion Event, or as
soon as practicable thereafter. The
Conversion Event is the date upon which the
shareholders of the Company vote, pursuant
to Section 242 of the Delaware
General Corporation Law, to amend the
Amended and Restated Certificate of
Incorporation of the Company (the
"Certificate") to increase the number of
authorized shares of the Company's Common
Stock as set forth in Article 4 of the
Certificate from twenty million
(20,000,000) shares to no less than thirty five
million (35,000,000) shares (the
"Conversion Event").
2. Pursuant
to this promissory note (the "Note"), the Holder is funding
_______________________________________
(U.S.) Dollars ($____________) (the
"Purchase Price") in cash or other
immediately available funds to the Company on
the date of execution hereof.
3. This Note
shall mature on the date (the "Maturity Date") that is the
earlier of (a) the Conversion Event, (b)
thirty six (36) months from the date of
issuance (the "Issuance Date") or (c) upon
a Change of Control (as defined
below). With respect to (b) and (c) of this
paragraph 3, the Holder shall be
remunerated the Reimbursement Amount only
after (i) all amounts due under any
and all agreements or other instruments
evidencing the Company's Institutional
Debt (as defined below) have been
indefeasibly paid in full in cash or (ii) the
holder of the Company's Institutional Debt
consents in writing to the repayment
of the principal amount hereof and all
accrued and unpaid interest thereon.
Provided, however, that if the Purchase
Price and the Non-Conversion Fee (as
defined below) are not paid at the Maturity
Date, as such would be due in the
case of (b) and (c) above, such failure to
pay shall result in an Event of
Default as described in Section 13 hereof
and interest hereon shall accrue at
the Non-Conversion Rate (as defined
below).
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4. For
purposes of this Note, a "Change of Control" shall be deemed to
occur on the effective date of any merger,
consolidation, or reorganization that
results in the holders of the outstanding
voting securities of the Company
(determined immediately prior to such
merger or consolidation) owning less than
an majority of the outstanding voting
securities of the surviving corporation
(determined immediately following such
merger or consolidation), or any sale or
transfer by the Company of all or
substantially all of its assets.
Notwithstanding the foregoing, a Change of
Control shall not be deemed to occur
if the Company either merges or
consolidates with or into another company or
sells or disposes of all or substantially
all of its assets to another company,
if such merger, consolidation, sale or
disposition is in connection with a
corporate restructuring wherein the
stockholders of the Company immediately
before such merger, consolidation, sale, or
disposition own, directly or
indirectly, immediately following such
merger, consolidation, sale, or
disposition at least a majority of the
combined voting power of all outstanding
classes of securities of the company
resulting from such merger or
consolidation, or to which the Company
sells or disposes of its assets, in
substantially the same proportion as their
ownership in the Company immediately
before such merger, consolidation, sale, or
disposition.
5. Should the
Note mature thirty six (36) months from the Issuance Date, or
as the result of a Change of Control, as
set forth in paragraph 3 above, then
within six (6) months of the Maturity Date,
Company will pay to Holder (i) the
Purchase Price, and (ii) an additional
twenty percent (20%) of the Purchase
Price (the "Non-Conversion Fee").
Additionally, the Note will begin accruing
interest based on the Purchase Price and
Non-Conversion Fee at an annual rate of
fifteen percent (15%) beginning on the
Maturity Date (the "Non-Conversion
Interest") and will continue to accrue
interest until such time as the Holder is
reimbursed the Purchase Price, the
Non-Conversion Fee and any and all
Non-Conversion Interest (collectively
referred to as the "Reimbursement
Amount").
6.
Notwithstanding the foregoing, under no circumstances shall the
Purchase
Price or Non-Conversion Fee be paid out
until (i) all amounts due under any and
all agreements or other instruments
evidencing the Company's Institutional Debt
(as defined below) have been indefeasibly
paid in full in cash or (ii) the
holder of the Company's Institutional Debt
consents in writing to the repayment
of the Purchase Price or the Non-Conversion
Fee. Provided, however, that if the
Purchase Price and Non-Conversion Fee are
not paid at the Maturity Date, such
failure to pay shall result in an Event of
Default as described in Section 3
below and Non-Conversion Interest shall
continue to accrue. The Non-Conversion
Interest shall be payable in cash or other
immediately available funds to the
Holder quarterly in arrears; provided that
any such payment shall be made only
if the Company is not in Default or an
Event of Default with Senior Lender (as
defined in paragraph 7 below), at which
time all payments shall be blocked until
the earlier of (i) the cure of the Default
or Event of Default with the Senior
Lender, (ii) written waiver of the Default
or Event of Default by Senior Lender,
or (iii) the indefeasible payment in full
of the Institutional Debt. Copies of
all credit agreements and other instruments
evidencing the Company's
Institutional Debt are available for the
Holder's review at the Company's
executive offices. The first interest
payment shall be made on the last day of
the Company's next fiscal quarter following
the Maturity Date and each
subsequent interest payment shall be due on
the last day of each quarterly
period thereafter.
7. For
purposes of this Note, "Institutional Debt" means the principal,
and
premium, if any, and interest (including
interest that accrues after a
bankruptcy, notwithstanding any law to the
contrary), along with any other
indebtedness, obligations, liabilities,
charges, fees, costs, and expenses
payable pursuant to the terms of
instruments creating or evidencing indebtedness
of the Company, outstanding as of the date
of initial issuance of this Note, or
indebtedness thereafter created, assumed,
incurred, or guaranteed by the Company
and its affiliates, and all renewals,
extensions, and refinances thereof, which
are payable to banks, commercial finance
companies, insurance companies or other
institutional lenders including, without
limitation, CapitalSource Finance LLC
and its affiliates (the "Senior
Lender").
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<PAGE>
8. Upon any
bankruptcy, insolvency, dissolution, receivership, or other
proceeding involving the Company, all
Institutional Debt shall first be
indefeasibly paid in full in cash before
any payment or distribution of any kind
is made to the Holder of this Note, and any
payment or distribution that may be
made with respect to this Note, whether in
cash, securities, or otherwise, shall
be held in trust for the benefit of the
holder of the Institutional Debt and
immediately upon receipt, delivered to the
holder of the Institutional Debt.
9. This Note
is being issued pursuant to an exemption from registration
under the Securities Act and the rules and
regulations promulgated thereunder.
10. The Holder
represents to the Company that it is aware of the Company's
business affairs and financial condition
and has acquired sufficient information
about the Company to reach an informed and
knowledgeable decision to acquire
this Note and the shares issuable upon
conversion of this Note. The holder of
this Note further represents that it is
acquiring this Note and the right to
acquire the shares issuable upon conversion
of this Note for investment purposes
only, 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.
11.
Conversion.
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(a)
Automatic Conversion. Upon the Conversion Event, the
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Note shall immediately mature and shall
automatically convert (except that upon
any liquidation of the Corporation the
right of conversion shall terminate at
the close of business on the last full
business day preceding the date fixed for
payment of the amount distributable on the
Note as more fully described in the
Liquidation section below) into fully paid
and nonassessable whole shares of
Common Stock on a two (2) to one (1) basis
(the "Conversion Ratio"). For the
sake of clarity, for every one (1) dollar
of the purchase price, Holder shall
receive two (2) shares of Common Stock (the
"Conversion Price"). The Company
shall give written notice to Holder of the
occurrence of the Conversion Event,
which notice shall include a calculation of
the number of shares of Common Stock
into which the Note is converted.
Thereafter, the Holder shall not be entitled
to the Reimbursement Amount, as set forth
in paragraph 5 above.
(b)
Issuance of Certificates; Time Conversion Effected.
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Within sixty (60) days, or as soon as
practicable after the Conversion Event,
the Corporation shall issue and deliver, or
cause to be issued and delivered, to
the Holder, registered in such name or
names as such Holder may direct, subject
to compliance with applicable laws to the
extent such designation shall involve
a transfer, a certificate or certificates
for the number of whole shares of
Common Stock issuable upon the conversion
of the Note (the "Conversion Shares").
To the extent permitted by law, such
conversion shall be deemed to have been
effected as of the date the Conversion
Event occurs, as applicable, and at such
time the rights of the Holder of the Note
shall cease, and the person or persons
in whose name or names any certificate or
certificates for shares of Common
Stock shall be issuable upon such
conversion, shall be deemed to have become the
holder or holders of record of the
Conversion Shares represented thereby.
Furthermore, the Company covenants that
upon issuance of the Conversion Shares
in accordance with the terms hereof,such
shares shall be duly authorized,
validly issued and outstanding, fully paid
and non-assessable shares of Common
Stock. Except as described herein, this
Note is not otherwise convertible into
any other shares of the Company's capital
stock.
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<PAGE>
(c)
The certificates representing the Conversion Shares
shall bear a legend substantially similar
to the following:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Act"), and may not be offered or sold except (1) pursuant to
an
effective registration statement under the Act or (2) upon the
delivery by the holder to the Company of an opinion of counsel
that an exemption from registration under such Act is
available."
12.
Anti-dilution.
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(a)
Stock Splits and Combinations. If the Company shall
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combine all of its outstanding shares of
Common Stock into a smaller number of
shares, the number of Conversion Shares
issuable upon the Conversion Event
hereunder shall be proportionately
decreased and the Conversion Price in effect
immediately prior to such combination shall
be proportionately increased, as of
the effective date of such combination, as
follows: (i) the number of Conversion
Shares purchasable imme
