-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D3fB7jwCt+asZMMp9M3lCT+r0BaG39RPmjhHbm25+GPxIAPDOfRtdUXlrKzJPK6Y fsWCtcFlCp2AEXG0VQ9QVQ== 0001024739-99-000016.txt : 19990122 0001024739-99-000016.hdr.sgml : 19990122 ACCESSION NUMBER: 0001024739-99-000016 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19990121 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QCS CORP CENTRAL INDEX KEY: 0000825517 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 841057621 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-55075 FILM NUMBER: 99508999 BUSINESS ADDRESS: STREET 1: 650 CASTRO STREET SUITE 210 STREET 2: C/O RICHARD S LANE ESQ CITY: MOUNTAIN VIEW STATE: CA ZIP: 94041 BUSINESS PHONE: 4159661214 MAIL ADDRESS: STREET 1: 650 CASTRO ST STREET 2: STE 210 CITY: MOUNTAIN VIEW STATE: CA ZIP: 94041 FORMER COMPANY: FORMER CONFORMED NAME: PARKWAY CAPITAL CORP DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TC GROUP LLC CENTRAL INDEX KEY: 0000933790 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 527656007 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O THE CARLYLE GROUP STREET 2: 1001 PENNSYLVANIA AVENUE NW SUITE 220 S CITY: WASHINGTON STATE: DC ZIP: 20004-2505 BUSINESS PHONE: 2023472626 MAIL ADDRESS: STREET 1: C/O CARLYLE GROUP STREET 2: 1001 PENNSYLVANIA AVENUE NW SUITE 220 S CITY: WASHINGTON STATE: DC ZIP: 20004 SC 13D 1 SCHEDULE 13D CUSIP No. 74725 H 10 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Schedule 13D Under the Securities Exchange Act of 1934 (Amendment No. 1) /1 QCS.net Corporation - ------------------------------------------------------------------------------- (formerly QCS Corporation) (Name of Issuer) Common Stock, Par Value 0.001 Per Share - ------------------------------------------------------------------------------- (Title of Class of Securities) 74725 H 10 1 - ------------------------------------------------------------------------------- (CUSIP Number) Ed Mathias c/o The Carlyle Group 1001 Pennsylvania Avenue, N.W. Suite 220 South Washington D. C. 20004 (202) 347-2626 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement /2) - ------------------------------------------------------------------------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b) (3) or (4), check the following box [ ]. Check the following box if a fee is being paid with this statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of less than five percent of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - -------- 1/ This Amendment No. 1 to Schedule 13D amends the Schedule D filed on behalf of Reporting Persons on June 27, 1995. 2/ This Amendment No. 1 to Schedule 13D relates to the acquisition of capital stock of the Issuer by Reporting Persons on August 29, 1997 and September 1, 1998 and is being filed merely to update the Schedule 13 D filed on behalf of Reporting Persons on June 27, 1995 as to their aggregate incremental holding of the Issuer's capital stock. See Item 4 herein. CUSIP No. 74725 H 10 1 - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS Carlyle-QCS Partners, L.P. IRS # 52-1899559 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 /1 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 Shares BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 3,151,999 Shares /2 REPORTING -------------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 0 Shares -------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,151,999 Shares /2 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,151,999 Shares /2 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.0% /3 - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN 1/ 1,456,311 shares acquired in connection with Reset; 239,377 shares acquired as result of Dividend Recapitalization. In both cases, no funds given in exchange for the shares. (See Item 3). 2/ Including 1,695,688 shares of Common Stock receivable upon conversion of 1,695,688 shares of Convertible Preferred Stock. Carlyle-QCS has no beneficial interest in the 145,631 shares receivable from the Company upon exercise of certain warrant rights under a Class W Warrant issued to TC Group, L.L.C. (See Items 4, 5 and 7). 3/ Percentages calculated based on 24,249,991 shares which equals 19,230,750 shares of Common Stock reported as issued and outstanding on the Company's latest Form 10-QSB and 5,019,241 shares of Convertible Preferred Stock issued and outstanding subsequent to the Dividend Recapitalization according to that certain Letter dated July 23, 1998 from the Company to the holders of Convertible Preferred Stock plus the shares that will be issued upon conversion of the Convertible Preferred Stock and shares that will be issued upon exercise of the Reporting Persons' rights to purchase stock from the Company. (See Item 5(a)). CUSIP No. 74725 H 10 1 - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS TC Group, L.L.C. IRS # 54-1686957 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 /1 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 Shares BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 3,297,630 Shares /2 REPORTING -------------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 0 Shares -------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,297,630 Shares /2 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,297,630 Shares /2 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.6% /2 - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON 00 (Limited Liability Company) ______________ 1/ 1,456,311 shares acquired in connection with Reset; 239,377 shares acquired as result of Dividend Recapitalization. In both cases, no funds given in exchange for the shares. (See Item 3). 2/ Including (i) the 1,695,688 shares receivable upon conversion of 1,695,688 shares of Convertible Preferred Stock; and (ii) the 145,631 shares receivable from the Company upon exercise of certain warrant rights under a Class W Warrant. (See Items 4, 5 and 7). 3/ Percentages calculated based on 24,249,991 shares which equals 19,230,750 shares reported as issued and outstanding on the Company's latest Form 10-QSB and 5,019,241 shares of Convertible Preferred Stock issued and outstanding subsequent to the Dividend Recapitalization according to that certain Letter dated July 23, 1998 from the Company to the holders of Convertible Preferred Stock plus the shares that will be issued upon conversion of the Convertible Preferred Stock and shares that will be issued upon exercise of the Reporting Persons' rights to purchase stock from the Company. (See Item 5(a)). CUSIP No. 74725 H 10 1 - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS TCG Holdings, L.L.C. IRS # 54-1686011 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS 00 /1 - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 Shares BENEFICIALLY -------------------------------------------------------------- OWNED BY 8 SHARED VOTING POWER EACH 3,297,630 Shares /2 REPORTING -------------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 0 Shares -------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER 3,297,630 Shares /2 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,297,630 Shares /2 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13.6% /3 - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON 00 (Limited Liability Company) ______________ 1/ 1,456,311 shares acquired in connection with Reset; 239,377 shares acquired as result of Dividend Recapitalization. In both cases, no funds given in exchange for the shares. (See Item 3). 2/ Including (i) the 1,695,688 shares receivable upon conversion of 1,695,688 shares of Convertible Preferred Stock; and (ii) the 145,631 shares receivable from the Company upon exercise of certain warrant rights under a Class W Warrant. (See Items 4, 5 and 7). 3/ Percentages calculated based on 24,249,991 shares which equals 19,230,750 shares reported as issued and outstanding on the Company's latest Form 10-QSB and 5,019,241 shares of Convertible Preferred Stock issued and outstanding subsequent to the Dividend Recapitalization according to that certain Letter dated July 23, 1998 from the Company to the holders of Convertible Preferred Stock plus the shares that will be issued upon conversion of the Convertible Preferred Stock and shares that will be issued upon exercise of the Reporting Persons' rights to purchase stock from the Company. (See Item 5(a)). CUSIP No. 74725 H 10 1 Item 1. Security and Issuer The title of the class of equity securities to which this Amendment No.1 to Schedule 13D relates is the Common Stock, par value $.001 per share (the "Common Stock"), of QCS.net Corporation, a Delaware corporation (formerly QCS Corporation) (the "Company"). The address of the Company is 650 Castro Street, Suite 210, Mountain View, CA 94041. Item 2. Identity and Background (a) - (c), (f) The names of the persons filing this Amendment No.1 to Schedule 13D are (i) Carlyle-QCS Partners, L.P., a Delaware limited partnership ("Carlyle-QCS"); (ii) TC Group, L.L.C., a Delaware limited liability company ("TC Group"); and (iii) TCG Holdings, L.L.C., a Delaware limited liability company ("TCG"; and collectively with Carlyle-QCS and TC Group referred to herein as the "Reporting Persons"). TC Group is the sole general partner of Carlyle-QCS. TCG is a member of TC Group and holds a controlling interest in TC Group. The names of the managing members of TCG, their business address, citizenship, and principal occupation are as follows: Name and Office Held Business Address Citizenship - --------------------- ---------------- ----------- James A. Baker, III c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 Frank C. Carlucci c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 William E. Conway, Jr. c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 Daniel A. D'Aniello c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 CUSIP No. 74725 H 10 1 Richard G. Darman c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 Allan M. Holt c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 Jerome H. Powell c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 David M. Rubenstein c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 Frank D. Yeary c/o The Carlyle Group, 1001 USA Managing Director Pennsylvania Avenue, N.W. Suite 220, Washington, D.C. 20004-2505 The principal business of Carlyle-QCS is to invest in the securities of the Company. The principal business of TC Group and TCG is merchant banking. The principal business address of Carlyle-QCS, TC Group and TCG is c/o The Carlyle Group, 1001 Pennsylvania Avenue N.W., Suite 220 South, Washington D.C. 20004. (d) and (e). During the last five years, none of the Reporting Persons has (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration The Reset Pursuant to that certain Series A Convertible Stock Purchase Agreement dated as of November 22, 1994 (the "Stock Purchase Agreement") by and among the Company, Carlyle-QCS and a syndicate of purchasers led by Mr. Yves CUSIP No. 74725 H 10 1 Sisteron (the "Sisteron Group") (attached to the Schedule 13D filed on behalf of Reporting Persons on June 27, 1995 (the "Original Schedule 13D") as Exhibit 2), Carlyle-QCS contracted to purchase an aggregate of 1,456,311 shares of the Company's authorized Series A Convertible Preferred Stock, par value $.001 per share (the "Convertible Preferred Stock"), from the Company. Pursuant to the Stock Purchase Agreement and that certain Shareholders Agreement dated as of November 22, 1994 (the "Shareholders Agreement") by and among the Company, Carlyle-QCS and Sisteron Group (attached to the Original Schedule 13D as Exhibit 3), the purchase price paid by Carlyle-QCS for the Convertible Preferred Stock could be reduced in the event QCS Development Company, SA, the Company's subsidiary (the "Subsidiary"), realized a net income during the fiscal year 1996 equal to forty percent (40%) or less of its projected net income for the fiscal year 1996, as set forth in the Company's Information Memorandum dated July, 1994. Such reduction would take the form of, a cash payment, or, at the Company's option, issuance of additional shares of Common Stock, or a combination of both to Carlyle-QCS and the other holders of Convertible Preferred Stock (the "Reset"). Such payment would be made by the Company, which would be reimbursed by Marcel van Heesewijk and Mattheus Wegbrans (the "Founders"). In that certain Founders Agreement, dated June 17, 1996 ("Founders Agreement"), by and among the Founders, the Company, Reinhardt Stille and Leonardus Klijn, and various Purchasers (the "Purchasers"), the Founders acknowledged that the net income milestones for the Subsidiary for the fiscal year 1996 would not occur. The Founders therefore agreed to transfer or pay the Purchasers, including Carlyle-QCS, an aggregate of 4,368,937 shares of Common Stock (the "Reset Shares") or the equivalent in cash, based on a value of $1.03 per share, or a combination of shares and cash; such transfer or payment to be made to the Purchasers pro-rata based on their holdings of Convertible Preferred Stock. The Founders agreed to make such transfer or payment on or before August 1, 1997. The Founders placed the Reset Shares in escrow pursuant to that certain Escrow Agreement dated June 17, 1996 by and among the Founders, the Purchasers, and Cooley Godward Castro Huddleson & Tatum (the "Escrow Agent"). By letter dated February 13, 1997, Carlyle-QCS confirmed with the Company its desire to receive its pro rata share of the Reset Shares, its equivalent in cash, or a combination of both. By letter dated July 29, 1997, Carlyle-QCS instructed the Escrow Agent to deliver and remit to Carlyle-QCS 1,456,311 shares of Common Stock, which represented Carlyle-QCS's pro-rata share of the Reset Shares. Accordingly, on August 29, 1997, Carlyle-QCS received 1,456,311 shares of Common Stock. The Dividend Recapitalization Under the terms of the Certificate of Incorporation of the Company, as amended, the Company must pay cash dividends on the Convertible Preferred Stock at the rate of 5% per annum. By June, 1998, Carlyle-QCS and the other holders of Convertible Preferred Stock had an accrued and delinquent cash dividend owed to them by the Company. On June 17, 1998, the Company sent a letter (the "Consent Letter") to all holders of Convertible Preferred Stock that proposed a dividend recapitalization (the "Dividend Recapitalization") whereby the cash dividend on the Convertible Preferred Stock would be eliminated as well as all rights to receive the accrued CUSIP No. 74725 H 10 1 and delinquent cash dividend for periods up to and including June 30, 1998 (the "Closing Date"). In exchange for the cash dividend and the right to receive the accrued and delinquent cash dividend, the holders of the Convertible Preferred Stock would be issued, on a pro rata basis, shares of Convertible Preferred Stock. The number of shares that each holder of Convertible Preferred Stock would receive would be calculated by dividing (a) the accrued divided as of the Closing Date by (b) $1.2069, which represents 66 2/3% of the average of the bid and ask prices of the Company's Common Stock for the twenty (20) days prior to the Closing Date as reported on the Over-the-Counter Bulletin Board reporting system. The Dividend Recapitalization was conditioned upon the approval by the holders of 80% or more of the Convertible Preferred Stock on or before the Closing Date. By letter dated July 23, 1998 from the Company to the holders of Convertible Preferred Stock (the "Confirmation Letter"), the Company confirmed that it had received on or prior to the Closing Date executed copies of the Consent Letter from holders of 80% or more of the Convertible Preferred Stock. Accordingly, the Company carried out the Dividend Recapitalization. Based on the calculation in the Consent Letter, on September 1, 1998, Carlyle-QCS received 239,377 shares of Convertible Preferred Stock in accordance with the Dividend Recapitalization. Item 4. Purpose of Transaction The Reset was contemplated in the Stock Purchase Agreement and was consummated as a reduction in the purchase price paid by Carlyle-QCS for the 1,456,311 shares of Convertible Preferred Stock acquired by Carlyle-QCS pursuant to the Stock Purchase Agreement. The Dividend Recapitalization was consummated by the Reporting Persons at the request of the Company and was an exchange for the cash dividend on the Convertible Preferred Stock and the right to receive the accrued and delinquent cash dividend. Each Reporting Person may, subject to the continuing evaluation of the factors discussed herein, acquire from time to time additional shares of the Common Stock or other securities of the Company in the open market or in privately negotiated transactions, by exchange offer or otherwise. Depending on the factors discussed herein, each Reporting Person may, from time to time, retain or sell all or a portion of its holdings of the shares of the Common Stock in the open market or in privately negotiated transactions. Any actions that any Reporting Person might undertake will be dependent upon such person's review of numerous factors, including, among other things, the availability of shares of the Common Stock for purchase and the price levels of such shares; general market and economic conditions; ongoing evaluation of the Company's business operations and prospects; the relative attractiveness of alternative business and investment opportunities; the actions of the management and the Board of Directors of the Company (the "Board"); and other future developments. Although the foregoing reflects activities presently contemplated by each Reporting Person with respect to the Company, the foregoing is subject to change at any time. The Reporting Persons have no present plans or proposals which relate to or would result in: (i) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (ii) an extraordinary corporate transaction, such as a CUSIP No. 74725 H 10 1 merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (iii) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (iv) any change in the present Board or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board; (v) any material change in the present capitalization or dividend policy of the Company; (vi) any other material change in the Company's business or corporate structure; (vii) changes in the Company's certificate of incorporation or by-laws or other actions which may impede the acquisition of control of the Company by any persons; (viii) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (ix) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (x) any action similar to those enumerated above. This Amendment No.1 to Schedule 13D is being filed as an amendment to the Original Schedule 13D. Although this Amendment No. 1 to Schedule 13D was required to be filed promptly after the acquisition of capital stock on August 29, 1997 pursuant to the Reset, at no time since the filing of the Original Schedule 13D on June 27, 1995 have any of the Reporting Persons' purposes and intentions in owning and holding the capital stock of the Company changed in any way. Moreover, no Reporting Person has acquired in an open market transaction or disposed in any type of transaction any of the capital stock of the Company during the relevant time period. Rather, the filing of this Amendment No. 1 to Schedule 13D is required merely because of the accretion of the Reporting Persons' holdings of the Company's capital stock pursuant to the Reset (which was contemplated and described in the initial investment documents filed on June 27, 1995 with the Original Schedule 13D) and the Dividend Recapitalization (which was agreed to by Reporting Persons at the request of Company management). CUSIP No. 74725 H 10 1 Item 5. Interest in Securities of the Issuer (a) Shares of Common Stock Beneficially Owned
Right to Common Stock Upon Right to Common Conversion of Purchase Stock Convertible Common Stock Total Beneficially Preferred from the Beneficial Owned Stock Company Ownership ----- ----- -------- ---------- Carlyle-QCS 1,456,311 1,695,688 N.A. 3,151,999 TC Group 1,456,311 1,695,688 145,631 3,297,630 TCG 1,456,311 1,695,688 145,631 3,297,630 Reporting 1,456,311 1,695,688 145,631 3,297,630 Persons
CUSIP No. 74725 H 10 1 Approximate Percentage of Common Stock of the Company Beneficially Owned.1
Common Stock and Convertible Preferred Right to Purchase Total Beneficial Stock from the Company Ownership ----- ----------------- --------- Carlyle-QCS 13.0% N.A. 13.0% TC Group 13.0% .60% 13.6% TCG 13.0% .60% 13.6% Reporting Persons 13.0% .60% 13.6%
1. Including (i) the 1,456,311 shares of Common Stock; (ii) the 1,695,688 shares receivable upon conversion of 1,695,688 shares of Convertible Preferred Stock; and (iii) the 145,631 shares receivable from the Company upon exercise of the Class W Warrant. (See Items 4, 5 and 7). ------------------------ (b) Carlyle-QCS may be deemed to share with the other Reporting Persons the power to vote and dispose of (i) 1,456,311 shares of Common Stock and (ii) 1,695,688 shares of Convertible Preferred Stock. Carlyle-QCS has no power to vote or dispose of 145,631 shares of Common Stock pursuant to the Class W Warrant held by TC Group. TC Group may be deemed to share with the other Reporting Persons the power to vote and dispose of (i) 1,456,311 shares of Common Stock and (ii) 1,695,688 shares of Convertible Preferred Stock. TC Group may be deemed to share with TCG the power to vote and dispose of 145,631 shares of Common Stock as the holder of the Class W Warrant. TCG, as a member holding a controlling interest in TC Group, may be deemed to share all rights herein described belonging to TC Group. (c) Other than the transactions described herein, no transactions in any capital stock of the Company have occurred since the filing of the Original Schedule 13D on June 27, 1995. (d) No person other than the Reporting Persons is known to the Reporting Persons to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock of the Company owned by the Reporting Persons. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Pursuant to the Founders Agreement, Carlyle-QCS received 1,456,311 shares of Common Stock as a partial refund of the purchase price of the 1,456,311 shares of Convertible Preferred Stock purchased by Carlyle-QCS pursuant to the Stock Purchase Agreement. CUSIP No. 74725 H 10 1 Pursuant to the Consent Letter and the Confirmation Letter, Carlyle-QCS received 239,377 shares of Convertible Preferred Stock as a result of the Dividend Recapitalization. The Consent Letter and the Confirmation Letter also eliminated the cash dividend on the Convertible Preferred Stock as well as the right to receive the accrued and delinquent cash dividend for periods up to and including June 30, 1998. Item 7. Materials to be filed as Exhibits Exhibit 1. Joint Filing Agreement by and among Carlyle-QCS, TC Group and TCG, dated January 15, 1999. Exhibit 2. Founders Agreement dated June 17, 1996 by and among the Founders, the Company, Reinhardt Stille and Leonardus Klijn, and the Purchasers. Exhibit 3. Escrow Agreement dated June 17, 1996 by and among the Founders, the Purchasers, and the Escrow Agent. Exhibit 4. Letter dated February 13, 1997 from Carlyle-QCS to the Company. Exhibit 5. Letter dated July 29, 1997 from the Company to the Escrow Agent. Exhibit 6. Letter dated June 17, 1998 from the Company to the holders of Convertible Preferred Stock. Exhibit 7. Letter dated July 23, 1998 from the Company to the holders of Convertible Preferred Stock. CUSIP No. 74725 H 10 1 Signature After reasonable inquiry and to the best of the knowledge of the undersigned on page 14 hereof, such undersigned certify that the information set forth in this statement is true, complete and correct. January 15, 1999 Date CUSIP No. 74725 H 10 1 IN WITNESS WHEREOF, Carlyle-QCS, TC Group and TCG have caused this Amendment No. 1 to Schedule 13D to be executed as of the date first above written. CARLYLE-QCS PARTNERS, L.P. By: TC Group, L.L.C., its General Partner By: /s/ David M. Rubenstein ---------------------------- Name: David M. Rubenstein Title: Managing Director TC GROUP, L.L.C. By: /s/ David M. Rubenstein ----------------------------- Name: David M. Rubenstein Title: Managing Director TCG HOLDINGS, L.L.C. By: /s/ David M. Rubenstein --------------------------- Name: David M. Rubenstein Title: Managing Director CUSIP No. 74725 H 10 1 Index to Exhibits -----------------
Page ---- Exhibit 1. Joint Filing Agreement by and among Carlyle-QCS, TC Group and 20 TCG, dated January 15, 1999. Exhibit 2. Founders Agreement dated June 17, 1996 by and among the 21 Founders, the Company, Reinhardt Stille and Leonardus Klijn, and the Purchasers. Exhibit 3. Escrow Agreement dated June 17, 1996 by and among the 27 Founders, the Purchasers, and the Escrow Agent. Exhibit 4. Letter dated February 13, 1997 from Carlyle-QCS to the Company. 39 Exhibit 5. Letter dated July 29, 1997 from the Company to the Escrow Agent. 41 Exhibit 6. Letter dated June 17, 1998 from the Company to the holders of 42 Convertible Preferred Stock. Exhibit 7. Letter dated July 23, 1998 from the Company to the holders of 44 Convertible Preferred Stock.
EX-1 2 JOINT FILING AGREEMENT Exhibit 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Amendment No. 1 to Schedule 13D referred to below) on behalf of each of them of a statement on the Amendment No. 1 to Schedule 13D (including amendments thereto) with respect to the common stock, par value $.001 per share, of QCS Corporation, a Delaware corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, Carlyle-QCS, TC Group and TCG have caused this Agreement to be executed as of the 15th day of January, 1999. CARLYLE-QCS PARTNERS, L.P. By: TC Group, L.L.C., its General Partner By: /s/ David M. Rubenstein --------------------------- Name: David M. Rubenstein Title: Managing Director TC GROUP, L.L.C. By: /s/ David M. Rubenstein --------------------------- Name: David M. Rubenstein Title: Managing Director TCG HOLDINGS, L.L.C. By: /s/ David M. Rubenstein --------------------------- Name: David M. Rubenstein Title: Managing Director EX-2 3 AGREEMENT Exhibit 2 AGREEMENT THIS AGREEMENT (the "Agreement") is entered into as of May __, 1996, by and among MARCEL VAN HEESEWIJK, MATTHEUS WEGBRANS (collectively, the "Founders"), QCS CORPORATION, a Delaware corporation (the "Company"), REINHARDT STILLE and LEONARDUS KLIJN, and THE PERSONS LISTED AS "PURCHASERS" ON THE SIGNATURE PAGES HERETO (the "Purchasers"). WHEREAS, Section 4(f) of that certain Shareholders' Agreement dated as of November 22, 1994 (the "Shareholders' Agreement"), and Section 2.4(d) of that certain Series A Convertible Preferred Stock Purchase Agreement dated November 22, 1994 (the "Purchase Agreement"), require the Company to transfer additional shares of Common Stock or, at the option of the Company, pay their equivalent value in cash (at certain agreed upon values), to the Purchasers, if certain financial results described therein (the "Financial Results") are not achieved; WHEREAS, if the Company shall become obligated to transfer shares of Common Stock or, at its option, pay their equivalent value in cash to the Purchasers, then pursuant to Section 4(f) of the Shareholders' Agreement, the Founders shall become obligated to pay to the Company shares of Common Stock, or, at the option of the Founders, cash, as more fully described in said Section 4(f); and WHEREAS, it appears that the Financial Results will not be achieved; WHEREAS, in consideration for, among other things, the Founders acknowledging that the Financial Results will not be achieved and for the Founders agreeing to the following, the parties hereto desire to delete Sections 4(e) and 4(f) of the Shareholders' Agreement and Section 2.4(d) of the Purchase Agreement, and to make certain other deletions and amendments to the Shareholders' Agreement and Purchase Agreement; NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties agree as follows: 1. The Founders acknowledge that the Financial Results will not be achieved. 2. Subject to the provisions contained in the last sentence of this Section 2, the Founders agree to transfer or pay to the Purchasers an aggregate of four million three hundred sixty eight thousand nine hundred thirty seven (4,368,937) shares of the Company's Common Stock (the "Shares") or, at the option of the Founders, their equivalent in cash based on a value of one Dollar and three Cents ($1.03) per share, or a combination of both shares of Common Stock and cash in the equivalent aggregate amount, such transfer or payment to be made to the Purchasers pro-rata to their respective holdings of Series A Preferred on the Closing (as defined in the Purchase Agreement). The Founders shall make such transfer or payment to the Purchasers on, or at the option of the 1 Founders before, August 1, 1997. Unless otherwise agreed to by all of the Purchasers, the form of payment to each Purchaser shall be the same as the form of payment to all other Purchasers (e.g., if one Purchaser is paid 80% in cash and 20% in shares of Common Stock, all Purchasers shall be paid 80% in cash and 20% in shares of Common Stock). No Founder shall be obligated to make any transfer or payment pursuant to this Agreement in excess of the amount determined by multiplying the amount of such transfer or payment by a fraction, the numerator of which is the number of shares of the Company's Common Stock owned by such Founder on the date of this Agreement (assuming that any outstanding options and warrants to purchase shares of the Company's Common Sock held by such Founder have been exercised), and the denominator of which is the number of shares of the Company's Common Stock owned by both Founders on the date of this Agreement (assuming that any outstanding options and warrants to purchase shares of the Company's Common Stock held by such Founders have been exercised). 3. Concurrently with the execution of this Agreement by all parties hereto, the Founders shall deposit the Shares into escrow to be held pursuant to the terms and conditions contained in that certain Escrow Agreement of even date attached hereto as Exhibit A. 4. The Purchasers agree to accept the transfer or payment described in Section 2 hereof in full satisfaction of any obligations owed to the Purchasers by the Company or the Founders pursuant to Sections 4(e) or 4(f) of the Shareholders' Agreement or Section 2.4(d) of the Purchase Agreement. 5. This Agreement shall become effective on the date on which it has been executed and delivered by all parties hereto and all of the following agreements have been executed and delivered by all parties thereto, and shall not become effective unless and until all such parties have so executed and delivered such agreements: (a) the Amendment No. 1 to Series A Convertible Preferred Stock Purchase Agreement attached hereto as Exhibit B; (b) the Amended and Restated Shareholders' Agreement of even date attached hereto as Exhibit C; and (c) the Amended and Restated Class U Warrant attached hereto as Exhibit D. 6. This Agreement and the legal relationship between the parties hereto shall be governed by and construed in accordance with the internal laws of the State of New York exclusively, without regard to conflicts of law principles. 7. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. 2 QCS CORPORATION By: ------------------------------- Name: ----------------------------- Title: ---------------------------- Marcel van Heesewijk ----------------------------------- Mattheus Wegbrans ----------------------------------- Reinhardt Stille ----------------------------------- Leonardus Klijn ----------------------------------- 3 PURCHASERS CARLYLE QCS PARTNERS, L.P. By: /s/ David M. Rubeinstein ------------------------------- Name: ----------------------------- Title: ---------------------------- STF MANAGEMENT LIMITED, as General Partner of Sharp Technology Fund I Limited Partnership By: ------------------------------- Name: ----------------------------- Title: ---------------------------- STF MANAGEMENT LIMITED, as General Partner of Sharp Technology Fund II Limited Partnership By: ------------------------------- Name: ----------------------------- Title: ---------------------------- LAGUNITAS PARTNERS, L.P. By: ------------------------------- Name: ----------------------------- Title: ---------------------------- 4 PROACTIVE PARTNERS, L.P. By: ------------------------------- Name: ----------------------------- Title: ---------------------------- OAKWOOD HOLDINGS, BVI By: ------------------------------- Name: ----------------------------- Title: ---------------------------- DE NOYANGE S.A. By: ------------------------------- Name: ----------------------------- Title: ---------------------------- CANNEL CAPITAL MANAGEMENT By: ------------------------------- Name: ----------------------------- Title: ---------------------------- Mr. Herb Miller ----------------------------------- Robert Zangrillo ----------------------------------- 5 Mr Hans Robben ----------------------------------- Mr. Peter Mills ----------------------------------- Mr. Peter Anson ----------------------------------- Mr. Steven Lebow ----------------------------------- 6 EX-3 4 ESCROW AGREEMENT Exhibit 3 ESCROW AGREEMENT THIS ESCROW AGREEMENT, made and entered into this ___ day of June, 1996, by, between and among Marcel Van Heesewijk, an individual having his principal office for the transaction of business at 650 Castro Street, Suite 210, Mountain View, California (hereinafter called "Heesewijk"), Mattheus Wegbrans, an individual having his principal office for the transaction of business at QCS Development Company S.A., Immeuble Le Quadra, 455 Promenade Des Anglais, 06200, Nice, France (hereinafter called "Wegbrans"; collectively with Heesewijk, the "Founders"), the persons listed as "Purchasers" on the signature pages hereto (the "Purchasers"), and Cooley Godward Castro Huddleson & Tatum, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California (hereinafter called the "Escrow Agent"). W I T N E S S E T H: Whereas, Section 4(f) of that certain Shareholders' Agreement dated as of November 22, 1994 (the "Shareholders' Agreement"), and Section 2.4(d) of that certain Series A Convertible Preferred Stock Purchase Agreement dated November 22, 1994 (the "Purchase Agreement"), require QCS Corporation, a Delaware corporation (the "Company") to transfer additional shares of its common stock (the "Common Stock") or, at the option of the Company, to pay the equivalent value of such shares of Common Stock in cash (at certain agreed upon values), to the Purchasers if certain financial results described therein (the "Financial Results") are not achieved; and Whereas, in consideration for, among other things, the Founders agreeing (i) to transfer to the Purchasers an aggregate of Four Million Three Hundred Sixty-Eight Thousand Nine Hundred Thirty-Seven (4,368,937) shares of the Common Stock or (ii) at the option of the Founders, to pay the equivalent value of such shares of the Common Stock in cash based on a value of One Dollar and Three Cents ($1.03) per share or (iii) to transfer or pay a combination of both shares of the Common Stock and cash in the equivalent aggregate amount on or before August 1, 1997, the Founders, the Purchasers and the Company entered into an agreement dated June ___, 1996 (the "Founders Agreement"), wherein such parties agreed to delete Sections 4(e) and 4(f) of the Shareholders' Agreement and Section 2.4(d) of the Purchase Agreement, and to make certain other deletions and amendments to the Shareholders' Agreement and Purchase Agreement; and Whereas, in accordance with the provisions of the Founders Agreement, the Founders, the Purchasers, and the Escrow Agent have agreed to enter into this Escrow Agreement and the Founders have agreed to deposit an aggregate of Four Million Three Hundred Sixty-Eight Thousand Nine Hundred Thirty-Seven (4,368,937) shares of the Common Stock, which have fully vested (the "Escrowed Shares"), with the Escrow Agent to be held by said Escrow Agent pursuant to the terms hereof; and 1 Whereas, the percentage of Escrowed Shares to be transferred by each of Heesewijk and Wegbrans shall be determined in accordance with Section 2 of the Founders Agreement; and Whereas, the parties hereto intend to set forth herein their agreement as to this matter. Now, Therefore, in consideration of these premises, the mutual promises of the parties and other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, it is hereby covenanted and agreed by and among the parties hereto as follows: 1. Escrow Agent. The law firm of Cooley Godward Castro Huddleson & Tatum agrees to act as Escrow Agent hereunder, and the Purchasers, Heesewijk and Wegbrans agree that the Escrow Agent shall so act and perform under the terms and conditions of this Escrow Agreement. 2. Possession of Shares. The Escrow Agent hereby acknowledges that it has received from Heesewijk 3,021,037 shares of Common Stock and from Wegbrans 1,347,900 shares of Common Stock, which in the aggregate represent Four Million Three Hundred Sixty-Eight Thousand Nine Hundred Thirty-Seven (4,368,937) shares of Common Stock, which will be held by the Escrow Agent pursuant to the terms and conditions described in this Escrow Agreement. Such Escrowed Shares and/or cash shall be paid over and delivered to Purchasers, or their designees, on or before August 1, 1997, in satisfaction of the obligations of Heesewijk and Wegbrans to Purchasers as set forth in the Founders Agreement. The Escrow Agent hereby acknowledges to Purchasers that the Escrowed Shares held by it are impressed with a trust in favor of Purchasers. 3. Voting of Common Stock. Unless the Common Stock is distributed to Purchasers pursuant to Section 4 hereof, Heesewijk and Wegbrans will retain all voting rights and all other incidents of ownership to the respective shares of Common Stock deposited by each of them pursuant to the terms herein, and the Escrow Agent assumes no obligation with respect to voting any shares of the Common Stock. 4. Distribution. Before August 1, 1997, all of the Escrowed Shares shall be released and remitted to Purchasers, or their designees, in accordance with Section 2 of the Founders Agreement, upon delivery to the Escrow Agent of instructions substantially in the form of Exhibit A hereto, signed by Heesewijk and Wegbrans. On or after August 1, 1997, that number of Escrowed Shares that any Purchaser is entitled to receive pursuant to Section 2 of the Founders Agreement shall be released and remitted to such Purchaser, or its designee, upon delivery to the Escrow Agent of instructions in the form of Exhibit B hereto, signed by such Purchaser. If any shares of Common Stock remain with the Escrow Agent on the Termination Date (as hereinafter defined), the Escrow Agent shall return such shares to Heesewijk and Wegbrans, as the case may be, upon the delivery of instructions 2 substantially in the form of Exhibit C hereto, signed by all Purchasers. In the event of any distribution of Escrowed Shares to a Purchaser, the Escrow Agent shall not be responsible for effecting a transfer of such shares on the books and records of the Corporation. Heesewijk and Wegbrans, by their execution hereof, irrevocably instruct the transfer agent of the Company to accept the instructions of the Escrow Agent with respect to any changes in the denominations of share certificates registered in the name of Heesewijk or Wegbrans, without further instruction or documentation. 5. Instructions. All instructions to the Escrow Agent hereunder must be in writing and signed by the party or parties delivering such instructions. 6. Good Faith. The Escrow Agent shall not be liable for any action it may take or fail to take as Escrow Agent, including without limitation, any action it may take or fail to take in reliance upon the instructions specified in Section 5 hereof, if its conduct is in good faith and in the exercise of its own best judgment or upon the advice of counsel to the Escrow Agent. Subject to the foregoing, Heesewijk and Wegbrans do hereby covenant and agree to indemnify and hold the Escrow Agent harmless from any and all claims and demands whatsoever which may be asserted against it in connection with its action as Escrow Agent hereunder, including reasonable attorneys' fees. 7. Advice and/or Instruction. If the Escrow Agent is in doubt as to any of its rights, duties or obligations hereunder at any time and from time to time, it may request the written advice and/or instruction of Purchasers, Heesewijk and Wegbrans, and the advice and/or instruction given in writing and signed by Purchasers, Heesewijk and Wegbrans may be fully relied upon by the Escrow Agent. In the event that the Escrow Agent seeks such advice and/or instruction from the parties, but fails to receive the same from all of the parties, it may forbear on any action under this Escrow Agreement until such advice and/or instruction is received by all of the parties, or in the alternative until an order is received from a court of competent jurisdiction. The Escrow Agent shall take no action upon the instruction of Heesewijk or Wegbrans without first notifying Purchasers of its intention with respect thereto and may also defer taking any action upon the instruction of any Purchaser until after it has provided notice of its intention to such other parties as it desires. 8. Resignation and Substitution. The Escrow Agent may resign as Escrow Agent upon ten days' written notice to Heesewijk and Wegbrans, provided, however, that prior to the effectiveness of such resignation, the Escrow Agent shall in good faith attempt to appoint a successor Escrow Agent, which shall be another law firm, commercial banking institution, or other institution that customarily acts in such capacity. 9. Acknowledgment as to Representation. Heesewijk and Wegbrans hereby acknowledge that the Escrow Agent is legal counsel to the Company, and does not represent either of Heesewijk or Wegbrans as legal counsel. 3 10. Binding Effect. This Escrow Agreement shall be binding upon and inure to the benefit of the parties and the Escrow Agent and their respective heirs, successors and assigns. 11. Entire Agreement. This Escrow Agreement constitutes the entire understanding and agreement between the parties with regard to the subject matter hereof. This Escrow Agreement may be amended at any time by written statement executed by all parties hereto. No modification or amendment of this Escrow Agreement shall be valid unless it is in writing and executed by all parties hereto. Any conflict between this Escrow Agreement and the Founders Agreement shall be resolved in favor of the former. 12. Termination. This Agreement shall terminate upon the earlier to occur of (i) the date on which the obligations of Heesewijk and Wegbrans described in the Founders Agreement have been satisfied or (ii) the distribution of all of the Escrowed Shares pursuant to Section 4 hereof or (iii) the resignation of the Escrow Agent pursuant to Section 8 hereof, if, after a good faith attempt to appoint a successor escrow agent pursuant to Section 8 no successor has been so appointed (the "Termination Date"). Except as otherwise provided in the preceding sentence, Purchasers, Heesewijk and Wegbrans shall not be entitled to terminate this Agreement. 13. acknowledgment by purchasers. Purchasers acknowledge that Founders and any Purchaser may reach an agreement prior to August 1, 1997, with respect to the distribution to such Purchaser of a number of the Escrowed Shares and/or cash that such Purchaser is entitled to receive pursuant to Section 2 of the Founders Agreement. If such an agreement has been reached by a Purchaser and Founders, then Escrow Agent shall release and remit that number of Escrowed Shares as directed by, and upon the delivery of, written instructions signed by such Purchaser and Founders, which in no event shall be more than the number of Escrowed Shares that such Purchaser is entitled to receive pursuant to Section 2 of the Founders Agreement and which in no event shall modify the rights of other Purchasers hereunder. 14. Law Venue. This Agreement and its validity, construction and performance shall be governed in all respects by the laws of the State of California. Jurisdiction of any lawsuit under this Escrow Agreement shall be limited to the Federal District Courts for all disputes arising hereunder. 15. Compensation. The Escrow Agent shall be compensated hereunder by Heesewijk and Wegbrans. 16. Notice and Directions. All notices and instructions provided for in this Agreement and any requests for directions to be made by the Escrow Agent hereunder, shall be made to the parties at the address opposite their names on the signature pages hereto. 4 In Witness Whereof, the parties have hereunto set their hands on the day first above written. ADDRESSES: /s/ Marcel van Heesewijk 650 Castro Street, Suite 210 - -------------------------------- Mountain View, CA 94041 Marcel van Heesewijk /s/ Mattheus Wegbrans c/o QCS Development Company S.A. - -------------------------------- Immeuble Le Quadra Mattheus Wegbrans 455 Promenade Des Anglais 006200 Nice, France COOLEY GODWARD CASTRO HUDDLESON Attn: Robert L. Jones, Esq. & TATUM Five Palo Alto Square 3000 El Camino Real By: /s/ Robert L. Jones Palo Alto, CA 94306-2155 -------------------------------- Name: -------------------------------- Title: ------------------------------- PURCHASERS: CARLYLE QCS PARTNERS, L.P. Attn: Edward Mathias 1001 Pennsylvania Ave., N.W. Suite 480 North By: Washington, D.C. 20004 -------------------------------- Name: -------------------------------- Title: -------------------------------- STF MANAGEMENT LIMITED, as General Address: Partner of Sharp Technology Fund I Limited Partnership By: /s/ Lindsay C.N. Bury -------------------------------- Name: -------------------------------- Title: -------------------------------- 5 STF MANAGEMENT LIMITED, as General Address: Partner of Sharp Technology Fund II Limited Partnership By: /s/ Lindsay C.N. Bury -------------------------------- Name: -------------------------------- Title: -------------------------------- LAGUNITAS PARTNERS, L.P. Address: By: /s/ John D. Gruber -------------------------------- Name: -------------------------------- Title: -------------------------------- PROACTIVE PARTNERS, L.P. Address: By: /s/ Charles C. McGettigan -------------------------------- Name: -------------------------------- Title: -------------------------------- OAKWOOD HOLDINGS, BVI Address: By: -------------------------------- Name: -------------------------------- Title: -------------------------------- DE NOYANGE S.A. Address: By: -------------------------------- Name: -------------------------------- Title: -------------------------------- 6 CANNELL CAPITAL MANAGEMENT Address: By: -------------------------------- Name: -------------------------------- Title: -------------------------------- Mr. Herb Miller Address: /s/ Herb Miller --------------------------------------- Mr. Robert Zangrillo Address: --------------------------------------- Mr. Hans Robben Address: --------------------------------------- Mr. Peter Mills Address: --------------------------------------- Mr. Peter Anson Address: --------------------------------------- Mr. Steven Lebow Address: --------------------------------------- 7 EXHIBIT A [Date] Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El Camino Real Palo Alto, California 10019-5874 Ladies and Gentlemen: Reference is made to the Escrow Agreement, dated June __, 1996, by and between Marcel van Heesewijk ("Heesewijk"), Mattheus Wegbrans ("Wegbrans"), the Persons listed as "Purchasers" on the signature pages thereto (the "Purchasers"), and yourself, pursuant to which the certificates representing Four Million Three Hundred Sixty-Eight Thousand Nine Hundred Thirty-Seven (4,368,937) shares of the common stock of QCS Corporation ("QCS") were deposited with you to constitute the Escrowed Shares (as such term is defined in the Escrow Agreement) in accordance with the Escrow Agreement. Pursuant to Section 4 of the Escrow Agreement, we hereby instruct you to immediately deliver and remit to Purchasers or their designees the certificates representing _____ Escrowed Shares to be distributed to such Purchasers in accordance with Section 2 of the Founders Agreement. Sincerely yours, ----------------------------- Marcel van Heesewijk ----------------------------- Mattheus Wegbrans A-1 EXHIBIT B [Date] Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El Camino Real Palo Alto, California 10019-5874 Ladies and Gentlemen: Reference is made to the Escrow Agreement, dated June __, 1996, by and between Marcel van Heesewijk ("Heesewijk"), Mattheus Wegbrans ("Wegbrans"), the Persons listed as "Purchasers" on the signature pages thereto (the "Purchasers") and yourself, pursuant to which the certificates representing Four Million Three Hundred Sixty-Eight Thousand Nine Hundred Thirty-Seven (4,368,937) shares of the common stock of QCS Corporation ("QCS") were deposited with you to constitute the Escrowed Shares (as such term is defined in the Escrow Agreement) in accordance with the Escrow Agreement. Pursuant to Section 4 of the Escrow Agreement, we hereby instruct you to immediately deliver and remit to [Purchaser or its designee] the certificates representing _____ Escrowed Shares, which constitute the number of Escrowed Shares that [Purchaser] is entitled to receive pursuant to Section 2 of the Founders Agreement. Sincerely yours, [Purchaser] By: --------------------------------- Name: ------------------------------- Title: ------------------------------ B-1 EXHIBIT C [Date] Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El Camino Real Palo Alto, California 10019-5874 Ladies and Gentlemen: Reference is made to the Escrow Agreement, dated June __, 1996, by and between Marcel van Heesewijk ("Heesewijk"), Mattheus Wegbrans ("Wegbrans"), the Persons listed as "Purchasers" on the signature pages thereto (the "Purchasers"), and yourself, pursuant to which the certificates representing Four Million Three Hundred Sixty-Eight Thousand Nine Hundred Thirty-Seven (4,368,937) shares of the common stock of QCS Corporation ("QCS") were deposited with you to constitute the Escrowed Shares (as such term is defined in the Escrow Agreement) in accordance with the Escrow Agreement. Because the Escrow Agreement has terminated in accordance with Section 12 therein, we hereby instruct you to immediately deliver and remit to Heesewijk and Wegbrans the certificates representing _____ Escrowed Shares, pursuant to Section 4 of the Escrow Agreement. Sincerely yours, CARLYLE QCS PARTNERS, L.P. By: --------------------------------- Name: ------------------------------- Title: ------------------------------ STF MANAGEMENT LIMITED, as General Partner of Sharp Technology Fund I Limited Partnership By: --------------------------------- Name: ------------------------------- Title: ------------------------------ C-1 STF MANAGEMENT LIMITED, as General Partner of Sharp Technology Fund II Limited Partnership By: --------------------------------- Name: ------------------------------- Title: ------------------------------ LAGUNITAS PARTNERS, L.P. By: --------------------------------- Name: ------------------------------- Title: ------------------------------ PROACTIVE PARTNERS, L.P. By: --------------------------------- Name: ------------------------------- Title: ------------------------------ OAKWOOD HOLDINGS, BVI By: --------------------------------- Name: ------------------------------- Title: ------------------------------ DE NOYANGE S.A. By: --------------------------------- Name: ------------------------------- Title: ------------------------------ C-2 CANNELL CAPITAL MANAGEMENT By: --------------------------------- Name: ------------------------------- Title: ------------------------------ Mr. Herb Miller -------------------------------- Mr. Robert Zangrillo -------------------------------- Mr. Hans Robben ------------------------------- Mr. Peter Mills ------------------------------- Mr. Peter Anson ------------------------------- Mr. Steven Lebow ------------------------------- C-3 EX-4 5 LETTER DATED FEBRUARY 13, 1997 Exhibit 4 THE CARLYLE GROUP 1001 Pennsylvania Ave., N.W. Washington, D.C. 20004-2505 (202) 347-2626 (202) 347-1818 (Fax) February 13, 1997 Marcel van Heesewijk c/o QCS Corporation 650 Castro Street Mountain View, CA 94041 The Wegbrans c/o QCS SA 455 Promenade des Anglais 06200 Nice, France copy to: Cooley, Godward, Castro, Huddleston & Tatum Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306 Attn: Robert L. Jones, Esquire Dear Sirs: We are in receipt of your letter dated January 21, 1997 offering to settle your obligations to the Series A investors by delivering one-third of the escrowed common stock, in lieu of delivering, on a pro-rata basis on or before August 1, 1997, either (i) 4,368,937 shares of QCS common stock, (ii) the cash equivalent of such shares based on a per share valuation of $1.03, or (iii) a combination of shares and cash at your option. After reviewing your letter and the agreements to which it refers, we have decided not to accept the above referenced offer. Hence, as satisfaction for our pro-rata share of your obligations, on or before August 1, 1997, the undersigned expects to receive: (i) 1,456,311 shares of QCS common stock; or (ii) $1,500,000.33; or (iii) Some pro-rata combination of (i) and (ii) above. We expect that 1,456,311 shares of QCS common stock will remain in escrow with Cooley, Godward, Castro, Huddleston and Tatum pursuant to the June 1996 escrow agreement until such time as your obligations to us have been satisfactorily discharged. Finally, from reviewing your January 21st letter, we understand that you may attempt to arrange a private sale of QCS common stock in order to raise capital to fulfill your obligations to the Series A investors. We currently have no objection to such action, subject, of course, to any and all registration and/or other contractual rights of the undersigned contained in QCS's corporate documents and any and all contractual arrangements among yourselves, QCS and/or the undersigned. Sincerely, CARYLE QCS PARTNERS, L.P. By: /s/ David M. Rubenstein ------------------------------- Name: ----------------------------- Title: ---------------------------- cc: James R. Doty, Esq. EX-5 6 LETTER DATED JULY 29, 1997 Exhibit 5 Ladies and Gentlemen Page 1 January 19, 1999 THE CARLYLE GROUP 1001 Pennsylvania Ave., N.W. Washington, D.C. 20004-2505 (202) 347-2626 (202) 347-1818 (Fax) July 29, 1997 Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El Camino Real Palo Alto, CA 94306-2155 Ladies and Gentlemen: Reference is made to the Escrow Agreement, dated June 17, 1996, by and between Marcel van Heesewijk ("Heesewijk"), Mattheus Wegbrans ("Wegbrans"), the Persons listed as "Purchasers" on the signature pages thereto (the "Purchasers"), and yourself, pursuant to which the certificates representing Four Million Three Hundred Sixty-Eight Thousand Nine Hundred Thirty-Seven (4,368,937) shares of the common stock of QCS Corporation ("QCS") were deposited with you to constitute the Escrowed Shares (as such term is defined in the Escrow Agreement) in accordance with the Escrow Agreement. Pursuant to Section 4 of the Escrow Agreement, we hereby instruct you to immediately deliver and remit to Carlyle QCS Partners, L.P. the certificates representing One Million Four Hundred Fifty-Six Thousand Three Hundred Eleven (1,456,311) Escrowed Shares, which constitute the number of Escrowed Shares that Carlyle QCS Partners, L.P. is entitled to receive pursuant to Section 2 of the Founders Agreement. Sincerely yours, CARLYLE QCS PARTNERS, L.P. By: /s/ David M. Rubenstein ------------------------------- Name: ----------------------------- Title: ---------------------------- cc: James R. Doty, Esq. EX-6 7 LETTER DATED JUNE 17, 1998 Exhibit 6 (Exhibit A) [QCS Letterhead] June 17, 1998 Dear Series A Investors: This letter sets forth the terms of an agreement in principle between QCS Corporation (the "Corporation") and the holders (the "Series A Investors") of Series A Preferred Stock (the "Series A Preferred Stock") of the Corporation which would be acceptable to the undersigned in connection with a proposed recapitalization (the "Recapitalization") of the Corporation. This letter follows preliminary discussions between the Corporation and the Series A Investors during which it was concluded that it is desirable for both the Series A Investors and the Corporation to enter into this agreement in principle, which is intended to be binding on the parties to the extent of the terms hereof, for the purpose of simplifying the Corporation's capital structure. Each undersigned Series A Investor (the "Holder") agrees that such Holder will participate in a Recapitalization and enter into such additional legally binding agreements and shareholder consents and approvals as may be required and which shall be reasonably acceptable to such Holder. The Recapitalization that each Holder agrees to participate in shall provide for the following: 1. Restructuring of Series A Dividend. The Corporation and the Series A Investors shall take all necessary action to eliminate the dividend on the Series A Preferred Stock and all rights to receive the accrued dividend as indicated on the Corporations' financial statements for periods up to and including the closing of the Recapitalization shall be waived by the Series A Investors. In place of the dividend, the Series A Investors shall be issued, on a pro-rata basis, shares of preferred stock of the Corporation. The shares of preferred stock issued pursuant to this right should rank pari passu with the Series A Preferred Stock and have the same voting and other rights as the Series A Preferred Stock. The number of shares that the Series A Investors will be entitled to purchase shall be determined by dividing (a) the accrued dividend as of the date of closing of the Recapitalization by (b) 66 2/3 % of the average of the bid and ask prices of the Corporation's common stock for the twenty (20) trading days prior to the closing of the Recapitalization as reported on the Over-The-Counter Bulletin Board reporting system (the "Average Price"). In addition, the Corporation shall provide registration rights for such purchased shares of preferred stock on terms no less favorable than the registration rights currently provided to the Series A Investors; -1- 2. Indemnification; Payment of Costs. The Corporation shall indemnify each Holder and hold it harmless from any liability, damages, claims, losses, penalties, costs or expense incurred by such Holder in connection with, or as a result of, the Recapitalization. The foregoing indemnification shall not apply to any taxes which may be payable by Holder as a result of the Recapitalization and Holder's legal fees and expenses incurred in the course of the negotiation and preparation of any documentation required in connection with the Recapitalization; and 3. Compliance With Laws. The Corporation shall take all necessary actions to ensure that the Recapitalization is in compliance with all laws, rules and regulations applicable to the Corporation or a Holder. Upon request of a Holder, the Corporation shall provide a Holder with an opinion of counsel that the Recapitalization has been consummated in compliance with all applicable laws as well as to any other matters reasonably requested by such Holder. Each Holder understands that the Corporation is in the process of obtaining similar letters to be executed by the holders of 80% or more of the Series A Preferred Stock. In the event that the Corporation obtains letters executed by holders of 80% or more of the Series A Preferred Stock, the Corporation shall provide prompt notice thereof to each Holder and this Agreement shall be binding on each Holder through June 30, 1998. In the event an 80% agreement is not obtained by the Corporation on or before June 30, 1998, then this agreement shall automatically terminate with no further action on the party of either party being required and shall be of no further force or effect. This letter supersedes prior discussions and agreements of the parties relating to the subject matter hereof. The terms hereof may only be amended by a writing executed by the Corporation and each Series A Investor. If you are in agreement with the foregoing, please so indicate by signing below and returning one signed copy of this letter to the undersigned. Sincerely, QCS CORPORATION /s/ Marcel van Heesewijk Marcel van Heesewijk Chairman of the Board -2- EX-7 8 LETTER DATED JULY 23, 1998 Exhibit 7 July 23, 1998 Dear Series A Investor: Re: Elimination of the Series A Dividend This letter is sent on behalf of the Board of Directors ("Board") of QCS corporation (the "Company") in reference to that certain letter of consent dated June 17, 1998 (the "Consent Letter"), which was circulated, in the form attached hereto as Exhibit A, to all shareholders (the "Series A Investors") holding Series A Preferred Stock (the "Series A") of the Company. This will confirm that the Company has received on or prior to June 30, 1998 executed copies of the Consent Letter from Series A Investors holding in excess of eight percent (80%) of the outstanding shares of Series A, as required for approval under the terms applicable to the Series A in the Company's Certificate of Incorporation, as amended (the"Certificate"). The Company therefore intends promptly to carry out the terms of the transaction as described in that letter, including, without limitation, (1) elimination of the cumulative dividend on the Series A and (2) the issuance of new shares of Series A to each existing Series A Investor pro rata with that Series A Investor's respective holding of the Series A, as provided in the Consent letter and as amplified in this letter (the "Series A Transaction"). The remainder of this letter describes the proposal of the Company's Board to implement the Series A Transaction and to obtain the consent of the Series A Investors to the proposed implementation. There are currently 4,310,684 shares of Series A issued and outstanding as of the date hereof. Exhibit B hereto sets forth the calculation of the number of Series A shares which the Series A Investors will receive in consideration for their agreement to eliminate the Series A dividend, as provided in the Consent Letter, and using June 30, 1998 as the Effective Date for the Series A Transaction, which is recommended and approved by the Board. On such basis, the Company will issue an additional 708,557 Series A shares, after which issuance a total of 5,019,241 Series A shares will be issued and outstanding. The Company currently has a total of only 5,000,000 shares of Preferred Stock authorized under its Certificate, which is an insufficient number to implement the Series A Transaction. The Company is therefore required to amend the Certificate to increase the total number of authorized but unissued preferred shares, and such amendment (the "Amendment") requires the vote of 50% of all shareholders and the vote of 80% of the Series A Investors voting as a class. In the Amendment, the Company would also amend the Certificate to eliminate the Series A dividend provisions, as the Series A Investors have approved in the Consent Letter. Due to the administrative inconvenience and legal costs of soliciting shareholder approvals for the Amendment, and since the Company has determined to hold an annual shareholders meeting at a time and place to be set during October, 1998, (the "1998 Annual Meeting"), the Board believes that it is in the best interests of both the Company and its shareholders to seek the Amendment in connection with the proxy solicitations that will be mailed to all shareholders for the 1998 Annual Meeting. The Company therefore consents and approves of, and requests that you provide your consent to and approval of the proposed implementation of the Series A Transaction, as provided in the Consent Letter and as modified in this letter, including without limitation consent and approval of the following terms and conditions with respect thereto: 1. As a Series A Investor, I have had the opportunity, either individually or through my representative, to speak with officers and employees of the Company and to conduct due diligence so as to receive full and accurate information with respect to the Company's affairs and operations, and have done so to my satisfaction. 2. June 30, 1998 shall be the Effective Date for calculation of the number of Series A shares to be issued in the Series A Transaction, and I hereby accept and approve the calculations set forth in Exhibit B. 3. The Series A Transaction shall be completed as soon as reasonably practicable following the shareholders' approval of the Amendment in connection with the 1998 Annual Meeting, to be held in accordance with applicable proxy rules and other required corporate procedures. 4. As a Series A Investor, I do hereby agree to vote all my Series A shares and all my Common Shares in favor of the Series A. Transaction (including without limitation the Amendment). 5. As a Series A Investor, I do hereby agree to execute and deliver such documents and instruments as may be reasonably necessary from time to time to implement the Series A Transaction (including without limitation the Amendment) following its approval at the 1998 Annual Meeting. This Section 6 shall survive expiration of this letter in accordance with its terms. 6. The Company, the Series A Investors, and each of them do understand and do hereby mutually acknowledge and agree that the Company's remedy at law would be inadequate in the event of a breach of either the Consent Letter of this letter by one or more of the undersigned Series A Investors, and that the Company shall therefore be entitled to seek injunctive relief to specifically enforce the terms hereof. 7. The terms of the Consent Letter and this letter, when approved by Series A Investors holding no less than eighty percent (80%) of the outstanding shares of the Series A, shall be binding on all of the Series A Investors, to the extent not prohibited by applicable law. 8. This letter and the Consent Letter as modified hereby shall be of full force and effect through and including November 30, 1998 (the "Expiration Date"), on which date both the Consent Letter and this letter shall expire if the Series A Transaction has not been completed on or prior to said Expiration Date. Please confirm your consent and approval hereto by signing in the space indicated below and returning to the Company an original executed copy of this letter in the enclosed self-addressed, stamped envelope. Sincerely, QCS CORPORATION /s/ Marcel van Heesewijk Marcel van Heesewijk Chairman of the Board QCS Corporation Class A Preferred Shareholders Conversion of Dividend
Total Preferred # of Class A # of Class A Class A Shares Total Shares @# Shares After Name outstanding % of Total Original B Dividend ($) $1,2069 Conversion ---- ----------- ---------- ---------- ------------ ------- ---------- Carlyle LP 1,456,311 33.78% $1,500,000.33 $288,904.48 239,377 1,695,688 STF Mgt 567,962 13.18% 585,000.39 112,672.80 93,357 661,319 Ltd-Sharp Tech Fund 1 STF Mgt 305,825 7.09% 315,000.22 60,669.97 50,269 356,094 Ltd-Sharp Tech Fund II Lagunitas 388,350 9.01% 400,000.50 77,041.27 63,834 452,184 Partners Proactive 388,350 9.01% 400,000.50 77,041.27 63,834 452,184 Partners Herb Miller 485,437 11.26% 500,000.11 96,301.49 79,792 565,229 Oakwood Holdings 291,263 6.76% 300,000.89 57,781,05 47,876 339,139 Robert Zangrillo 38,835 0.90% 40,000.05 7,704.13 6,383 45,218 DeNoyange SA 194,175 4.50% 200,000.25 38,520.64 31,917 226,092 Hans Robben 48,544 1.13% 50,000.32 9,630.21 7,979 56,523 Peter Mills 97,088 2.25% 100,000.64 19,260.42 15,959 113,047 Peter Anson 24,272 0.56% 25,000.16 4,815.10 3,990 28,262 Steven Lebow 24,272 0.56% 25,000.16 4,815.10 3,990 28,262 4,310,684 100.00% $4,440,004.52 $855,157.95 708,557 5,019,241
Average Average Date Volume High/Ask Low/Bid Class Bid/Ask Bid/Ask ---- ------ -------- ------- ----- ------- ------- 6/11/98 6,000 2 2 2 2 2,0000 6/12/98 2,000 2 2 2 2 2,0000 6/15/98 13,400 2 1/16 1 15/16 1 15/16 2 2,0000 6/16/98 36,500 1 7/8 1 11/16 1 11/16 1 25/32 1.7813 6/17/98 39,500 1 13/16 1 3/4 1 3/4 1 25/32 1.7813 6/18/98 5,600 1 13/16 1 3/4 1 3/4 1 25/32 1.7813 6/19/98 17,000 1 7/10 1 5/8 1 5/8 1 53/80 1.6625 6/22/98 4,000 1 11/16 1 11/16 1 11/16 1 11/16 1.6875 6/25/98 9,500 1 11/16 1 1/2 1 11/16 1 19/32 1.5938 9/26/98 11,000 1 13/16 1 3/4 1 3/4 1 25/32 1.7813 6/29/98 12,000 1 13/16 1 3/4 1 3/4 1 25/32 1.7813 6/30/98 3,000 1 7/8 1 7/8 1 7/8 1 7/8 1.8750 ----- ------ 147/58 1.8104 x 66.67% ------------ Conversion Price $1.2069
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