Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of May 28,
2003, between P-Com, Inc., a corporation organized under the laws of the State
of Delaware (the "COMPANY"), and each of the purchasers (individually, a
"PURCHASER" and collectively the "PURCHASERS") set forth on the execution pages
hereof (the "EXECUTION PAGES," and each an "EXECUTION PAGE").
WHEREAS:
A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").
B. The Company desires to issue and sell, and each Purchaser desires to
purchase, upon the terms and conditions stated in this Agreement, (i) a
convertible promissory note, in the form attached hereto as EXHIBIT A
(collectively, the "NOTES"), in the principal face amount set forth on such
Purchaser's Execution Page, which Notes shall be convertible into shares of the
Company's common stock, par value $0.0001 per share (the "COMMON STOCK"), or,
under certain circumstances, certain other securities of the Corporation, on the
terms set forth therein, (ii) a warrant, in the form attached hereto as EXHIBIT
B (collectively, the "SERIES A WARRANTS"), to acquire the number of shares of
Common Stock identified as the "Series A Warrant Shares" on such Purchaser's
Execution Page, (iii) a warrant, in the form attached hereto as EXHIBIT C
(collectively, the "SERIES A-1 WARRANTS"), to acquire the number of shares of
Common Stock identified as the "Series A Warrant Shares" on such Purchaser's
Execution Page, (iv) a warrant, in the form attached hereto as EXHIBIT D
(collectively, the "SERIES B WARRANTS"), to acquire the number of shares of
Common Stock identified as the "Series B Warrant Shares" on such Purchaser's
Execution Page, and (v) a warrant, in the form attached hereto as EXHIBIT E
(collectively, the "SERIES B-1 WARRANTS," and, together with the Series A
Warrants, the Series A-1 Warrants and the Series B Warrants, the "WARRANTS"), to
acquire the number of shares of Common Stock identified as the "Series B Warrant
Shares" on such Purchaser's Execution Page. The shares of Common Stock issuable
upon conversion of or otherwise pursuant to the Notes are referred to herein as
the "CONVERSION SHARES" and the shares of Common Stock issuable upon exercise of
or otherwise pursuant to the Warrants are referred to herein as the "WARRANT
SHARES." The Notes, the Warrants, the Conversion Shares and the Warrant Shares
are collectively referred to herein as the "SECURITIES" and each of them are
individually referred to herein as a "SECURITY."
C. In connection with the Closing pursuant to this Agreement, the parties
hereto are executing and delivering a Registration Rights Agreement, in the form
attached hereto as EXHIBIT F (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to
which the Company has agreed to provide certain registration rights under the
Securities Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.
D. In connection with the Closing (as defined herein) pursuant to this
Agreement, the Company is executing and delivering a Security Agreement, in the
form attached hereto as EXHIBIT G (together with any other document securing the
Notes and the subordination agreement relating to the Notes in favor of Silicon
Valley Bank, the "SECURITY DOCUMENTS"), in favor of the Collateral Agent (as
defined herein) for the benefit of all of the Purchasers, pursuant to which the
Company has agreed to grant a security interest in all of its properties and
assets in order to secure its obligations under the Notes. This Agreement, the
Notes, the Warrants, the Registration Rights Agreement and the Security
Documents are collectively referred to herein as the "TRANSACTION DOCUMENTS."
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Purchasers
hereby agree as follows:
1. PURCHASE AND SALE OF SECURITIES.
(a) PURCHASE AND SALE OF SECURITIES. Subject to the terms and conditions
hereof, at the Closing (as defined in Section 1(b) below), the Company shall
issue and sell to each Purchaser, and each Purchaser, severally and not jointly,
shall purchase from the Company, (i) a Note in the principal face amount set
forth on such Purchaser's Execution Page, (ii) a Series A Warrant to acquire the
number of shares of Common Stock identified as the "Series A Warrant Shares" on
such Purchaser's Execution Page, (iii) a Series A-1 Warrant to acquire the
number of shares of Common Stock identified as the "Series A Warrant Shares" on
such Purchaser's Execution Page, (iv) a Series B Warrant to acquire the number
of shares of Common Stock identified as the "Series B Warrant Shares" on such
Purchaser's Execution Page, and (v) a Series B-1 Warrant to acquire the number
of shares of Common Stock identified as the "Series B Warrant Shares" on such
Purchaser's Execution Page, in consideration for the payment by such Purchaser
of a purchase price equal to the principal face amount of such Purchaser's Note
(as to each Purchaser, the "PURCHASE PRICE").
(b) THE CLOSING. Subject to the satisfaction (or waiver) of the conditions
set forth in Sections 6 and 7 below, the closing of the transactions
contemplated hereby (the "CLOSING") shall take place at the offices of the
Company, on the date hereof, or at such other time or place as the Company and
the Purchasers may mutually agree (such date is hereinafter referred to as the
"CLOSING DATE").
(c) SUBSEQUENT PURCHASE AND SALE OF SECURITIES. The Company may issue and
sell Notes for up to Seven Hundred Fifty Thousand Dollars ($750,000), in the
aggregate, upon the same terms and conditions herein. In the event of the sale
of any additional Notes hereunder, the Company shall issue and sell such
additional Notes, Series A Warrant Shares and Series B Warrant Shares on the
same terms and conditions set forth in the Transaction Documents dated as of May
28, 2003. As the result of any such additional issuance, the term, "Note," in
the applicable Transaction Documents shall include any such additional issuance.
Any such Purchaser shall become a party to the Transaction Documents and shall
have the rights and obligations hereunder and thereunder.
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2. PURCHASER'S REPRESENTATIONS AND WARRANTIES. Each Purchaser severally,
but not jointly, represents and warrants to the Company as follows:
(a) PURCHASE FOR OWN ACCOUNT, ETC.. Such Purchaser is acquiring the Notes
and the Warrants for such Purchaser's own account and not with a present view
towards the public sale or distribution thereof, except pursuant to sales that
are exempt from the registration requirements of the Securities Act and/or sales
registered under the Securities Act. Such Purchaser understands that Purchaser
must bear the economic risk of this investment indefinitely, unless the
Securities are registered pursuant to the Securities Act and any applicable
state securities or blue sky laws or an exemption from such registration is
available, and that the Company has no present intention of registering the
resale of any such Securities other than as contemplated in the Registration
Rights Agreement. Notwithstanding anything in this Section 2(a) to the contrary,
by making the representations herein, the Purchaser does not agree to hold the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption from the registration requirements under
the Securities Act.
(b) ACCREDITED INVESTOR STATUS. Such Purchaser is an "ACCREDITED INVESTOR"
as that term is defined in Rule 501(a) of Regulation D under the Securities Act.
(c) RELIANCE ON EXEMPTIONS. Such Purchaser understands that the Securities
are being offered and sold to such Purchaser in reliance upon specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and such Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Purchaser set forth
herein in order to determine the availability of such exemptions and the
eligibility of such Purchaser to acquire the Securities.
(d) INFORMATION. Such Purchaser or its counsel, if any, have been furnished
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been
specifically requested by such Purchaser or its counsel. Neither such inquiries
nor any other investigation conducted by such Purchaser or its counsel or any of
its representatives shall modify, amend or affect such Purchaser's right to rely
on the Company's representations and warranties contained in Section 3 below.
Such Purchaser understands that such Purchaser's investment in the Securities
involves a high degree of risk.
(e) GOVERNMENTAL REVIEW. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
(f) TRANSFER OR RESALE. Such Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the sale or resale of the
Securities have not been and are not being registered under the Securities Act
or any state securities laws, and the Securities may not be transferred unless
(A) the transfer is made pursuant to and as set forth in an effective
registration statement under the Securities Act covering the Securities; or (B)
such Purchaser shall have delivered to the Company an opinion of counsel (which
opinion shall be in form,
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substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration; or (C) sold
under and in compliance with Rule 144 promulgated under the Securities Act (or a
successor rule) ("RULE 144"); or (D) sold or transferred in accordance with
applicable securities laws to an affiliate of such Purchaser who agrees to sell
or otherwise transfer the Securities only in accordance with the provisions of
this Section 2(f) and who is an Accredited Investor; and (ii) neither the
Company nor any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws (other than pursuant to
the Registration Rights Agreement). Notwithstanding the foregoing or anything
else contained herein to the contrary, the Securities may be pledged as
collateral in connection with a bona fide margin account or other lending
arrangement, provided such pledge is consistent with applicable laws, rules and
regulations.
(g) LEGENDS. Such Purchaser understands that the certificates for the
Warrants and, until such time as the Conversion Shares and Warrant Shares have
been registered under the Securities Act (including registration pursuant to
Rule 416 thereunder) or otherwise may be sold by such Purchaser under Rule
144(k), the certificates for the Conversion Shares and Warrant Shares shall bear
a restrictive legend in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
the securities laws of any state of the United States or in
any other jurisdiction. The securities represented hereby may
not be offered, sold or transferred in the absence of an
effective registration statement for the securities under
applicable securities laws unless offered, sold or transferred
pursuant to an available exemption from the registration
requirements of those laws.
The Company agrees that it shall, immediately prior to a registration
statement covering the Securities being declared effective, deliver to its
transfer agent an opinion letter of counsel, opining that at any time such
registration statement is effective, the transfer agent shall issue, in
connection with the issuance of the Conversion Shares and Warrant Shares,
certificates representing such Conversion Shares and Warrant Shares without the
restrictive legend above, provided such Conversion Shares and Warrant Shares are
to be sold pursuant to the prospectus contained in such registration statement.
Upon receipt of such opinion, the Company shall cause the transfer agent to
confirm, for the benefit of the holders, that no further opinion of counsel is
required at the time of transfer in order to issue such shares without such
restrictive legend.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any Security upon which it is
stamped, if (unless otherwise required by state securities laws) (i) the sale of
such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder); (ii) such holder provides the Company with an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a public sale or transfer
of such Security may be made without registration under the Securities Act; or
(iii) such holder provides the Company with reasonable assurances that such
Security can be sold under Rule 144. In the event the above legend is removed
from any Security and thereafter the effectiveness of a
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registration statement covering such Security is suspended or the Company
determines that a supplement or amendment thereto is required by applicable
securities laws, then upon reasonable advance written notice to such Purchaser
the Company may require that the above legend be placed on any such Security
that cannot then be sold pursuant to an effective registration statement or
under Rule 144 and such Purchaser shall cooperate in the replacement of such
legend. Such legend shall thereafter be removed when such Security may again be
sold pursuant to an effective registration statement or under Rule 144.
(h) AUTHORIZATION; ENFORCEMENT. This Agreement and the Registration Rights
Agreement have been duly and validly authorized, executed and delivered on
behalf of such Purchaser and is a valid and binding agreement of such Purchaser
enforceable against such Purchaser in accordance with its terms.
(i) RESIDENCY. Such Purchaser is a resident of the jurisdiction set forth
under such Purchaser's name on the Execution Page hereto executed by such
Purchaser.
The Purchasers' representations and warranties made in this Article 2
are made solely for the purpose of permitting the Company to make a
determination that the transactions contemplated hereby comply with applicable
U.S. federal and state securities laws and not for any other purpose. The
Company may not rely on such representations and warranties for any other
purpose.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set forth in
the Company's Select SEC Documents (as defined in Section 3(f) below) or on a
Disclosure Schedule executed and delivered by the Company to the Purchasers at
the Closing (the "DISCLOSURE SCHEDULE"), the Company represents and warrants to
each Purchaser as follows:
(a) ORGANIZATION AND QUALIFICATION. The Company and each of its direct or
indirect subsidiaries (collectively, the "SUBSIDIARIES") is a corporation duly
organized and existing in good standing under the laws of the jurisdiction in
which it is incorporated, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The Company and
each of its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which the nature of
the business conducted by it makes such qualification necessary and where the
failure so to qualify has had or could reasonably be expected to have a Material
Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material adverse effect on
(i) the Securities, (ii) the ability of the Company to perform its obligations
hereunder or under the other Transaction Documents or (iii) the business,
operations, properties, prospects, financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole.
(b) AUTHORIZATION; ENFORCEMENT. (i) The Company has the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents, to issue and sell the Notes and
Warrants in accordance with the terms hereof, to issue the Conversion Shares
upon conversion of the Notes in accordance with the terms of such Notes (subject
to obtaining the Authorized Stock Approval contemplated by Section 4(p) below)
and to issue the Warrant Shares upon exercise of the Warrants in accordance with
the terms of such Warrants; (ii) the execution, delivery and performance of this
Agreement
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and the other Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes and Warrants and the issuance and reservation for
issuance of the Conversion Shares (subject to obtaining the Authorized Stock
Approval contemplated by Section 4(p) below) and Warrant Shares) have been duly
authorized by the Company's Board of Directors and no further consent or
authorization of the Company, its Board of Directors, or any committee of the
Board of Directors is required, and (iii) this Agreement constitutes, and, upon
execution and delivery by the Company of the other Transaction Documents, such
agreements will constitute, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms. Neither the
execution, delivery or performance by the Company of this Agreement or the other
Transaction Documents nor the consummation by it of the transactions
contemplated hereby or thereby (including, without limitation, the issuance of
the Notes or Warrants or the issuance or reservation for issuance of the
Conversion Shares or Warrant Shares) requires any consent or authorization of
the Company's stockholders, except for the Authorized Stock Approval
contemplated by Section 4(p) below.
(c) CAPITALIZATION. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Notes and Warrants) exercisable
or exchangeable for, or convertible into, any shares of capital stock and the
number of shares to be reserved for issuance upon conversion of the Notes and
exercise of the Warrants is set forth in SECTION 3(C) of the Disclosure
Schedule. All of such outstanding shares of capital stock have been, or upon
issuance in accordance with the terms of any such warrants, options or preferred
stock, will be, validly issued, fully paid and non-assessable. No shares of
capital stock of the Company (including the Conversion Shares and the Warrant
Shares) are subject to preemptive rights or any other similar rights of the
stockholders of the Company or any liens or encumbrances. Except for the
Securities and as set forth in SECTION 3(C) of the Disclosure Schedule, as of
the date of this Agreement, (i) there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exercisable or
exchangeable for, any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock of the Company
or any of its Subsidiaries, nor are any such issuances or arrangements
contemplated, and (ii) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
its or their securities under the Securities Act (other than the Registration
Rights Agreement). SECTION 3(C) of the Disclosure Schedule sets forth all of the
Company issued securities or instruments containing antidilution or similar
provisions that will be triggered by, and all of the resulting adjustments that
will be made to such securities and instruments as a result of, the issuance of
the Securities in accordance with the terms of this Agreement, the Notes or the
Warrants. The Company has furnished to the Purchasers true and correct copies of
the Company's Certificate of Incorporation as in effect on the date hereof
("CERTIFICATE OF INCORPORATION"), the Company's Bylaws as in effect on the date
hereof (the "Bylaws"), and all other instruments and agreements governing
securities convertible into or exercisable or exchangeable for capital stock of
the Company.
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(d) ISSUANCE OF SHARES. The Notes and Warrants are duly authorized and,
upon issuance in accordance with the terms of this Agreement, will be validly
issued and free from all taxes, liens, claims and encumbrances (other than
restrictions on transfer contained in this Agreement or the Notes or Warrants)
and will not be subject to preemptive rights, rights of first refusal or other
similar rights of stockholders of the Company and will not impose personal
liability on the holders thereof. Upon obtaining the Authorized Stock Approval
contemplated by Section 4(p) below, the Conversion Shares shall be duly
authorized and reserved for issuance, and, upon conversion of the Notes in
accordance with the terms thereof, will be validly issued, fully paid and
non-assessable, and free from all taxes, liens, claims and encumbrances (other
than restrictions on transfer contained in this Agreement) and will not be
subject to preemptive rights, rights of first refusal or other similar rights of
stockholders of the Company and will not impose personal liability upon the
holder thereof. The Warrant Shares are duly authorized and reserved for
issuance, and, upon exercise of the Warrants in accordance with the terms
thereof, will be validly issued, fully paid and non-assessable, and free from
all taxes, liens, claims and encumbrances (other than restrictions on transfer
contained in this Agreement) and will not be subject to preemptive rights,
rights of first refusal or other similar rights of stockholders of the Company
and will not impose personal liability upon the holder thereof.
(e) NO CONFLICTS. The execution, delivery and performance of this Agreement
and the other Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance, as applicable, of the
Notes, Warrants, Conversion Shares and Warrant Shares) will not (i) result in a
violation of the Certificate of Incorporation or Bylaws or (ii) conflict with,
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment (including, without limitation, the triggering of any anti-dilution
provisions), acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree
(including United States federal and state securities laws and regulations and
rules or regulations of any self-regulatory organizations to which either the
Company or its securities are subject) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected (except, with respect to clause (ii), for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations that have not had and could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect). Neither the
Company nor any of its Subsidiaries is in violation of its Certificate of
Incorporation, Bylaws or other organizational documents and neither the Company
nor any of its Subsidiaries is in default (and no event has occurred which, with
notice or lapse of time or both, would put the Company or any of its
Subsidiaries in default) under, nor has there occurred any event giving others
(with notice or lapse of time or both) any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party. The businesses of the Company
and its Subsidiaries are not being conducted, and shall not be conducted so long
as a Purchaser owns any of the Notes, in violation of any law, ordinance or
regulation of any governmental entity, except for possible violations the
sanctions for which either singly or in the aggregate have not had and could not
reasonably be expected to have a Material Adverse Effect. The Company and its
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities which are material
to conduct its business, and
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neither the Company nor any of its Subsidiaries has received any written notice
of any proceeding relating to the revocation or modification of any such
certificate, authorization or permit. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under its Certificate of Incorporation or the laws of the state of its
incorporation which is or could become applicable to the Purchasers as a result
of the transactions contemplated by this Agreement, including without
limitation, the Company's issuance of the Securities and any and all Purchaser's
ownership of the Securities or the Purchaser's ownership of the Common Stock.
Except as specifically contemplated by this Agreement, the Company is not
required to obtain any consent, approval, authorization or order of, or make any
filing or registration with, any court or governmental agency or any regulatory
or self regulatory agency in order for it to execute, deliver or perform any of
its obligations under this Agreement or the other Transaction Documents, in each
case in accordance with the terms hereof or thereof.
(f) SEC DOCUMENTS, FINANCIAL STATEMENTS. Since December 31, 1997, the Company
has timely filed (within applicable extension periods) all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT") (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein, being hereinafter
referred to herein as the "SEC DOCUMENTS"). The Company has delivered to each
Purchaser true and complete copies of the SEC Documents. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Exchange Act or the Securities Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the statements made in any such SEC Documents is, or has
been, required to be amended or updated under applicable law (except for such
statements as have been amended or updated in subsequent filings made prior to
the date hereof). As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC applicable with respect thereto. Such financial
statements have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP"), consistently applied during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the
notes thereto, or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or summary statements)
and fairly present in all material respects the consolidated financial position
of the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to immaterial year-end
audit adjustments). Except as set forth in the financial statements of the
Company included in the Select SEC Documents (as defined below), the Company has
no liabilities, contingent or otherwise, other than (i) liabilities incurred in
the ordinary course of business subsequent to the date of such financial
statements and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under GAAP to be reflected in such
financial statements, which liabilities and obligations referred to in clauses
(i) and (ii), individually or in the aggregate, are not material to the
financial condition or operating results of the Company. As used in this
Agreement, the term "SELECT SEC DOCUMENTS" shall mean the Company's (A) Proxy
Statement for its 2002 Annual Meeting, (B) Annual Report on Form 10-K for the
fiscal year ending December 31, 2002, (C) Quarterly Reports on Form 10-Q for the
quarter ended March 31, 2003, and (D) Current Reports on Form 8-K filed since
December 31, 2002.
(g) ABSENCE OF CERTAIN CHANGES. Since December 31, 2002, there has been no
material adverse change and no material adverse development in the business,
properties, operations, prospects, financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole, other than as set forth
in the Select SEC Documents. The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
bankruptcy or receivership law nor does the Company or any of its Subsidiaries
have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy proceedings with respect to the Company or any of its
Subsidiaries.
(h) TRANSACTIONS WITH AFFILIATES. None of the officers, directors, or employees
of the Company is presently a party to any transaction with the Company or any
of its Subsidiaries (other than for ordinary course services solely in their
capacity as employees, officers or directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has an ownership interest of five percent or more or is an
officer, director, trustee or partner.
(i) ABSENCE OF LITIGATION. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body (including, without limitation, the SEC)
pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company, any of its Subsidiaries, or any of
their respective directors or officers in their capacities as such, other than
as set forth in the Select SEC Documents.. There are no facts which, if known by
a potential claimant or governmental authority, could give rise to a claim or
proceeding which, if asserted or conducted with results unfavorable to the
Company or any of its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect, other than as set forth in the Select SEC Documents.
(j) INTELLECTUAL PROPERTY. Each of the Company and its Subsidiaries owns or is
duly licensed to use all patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights, copyright applications,
licenses, permits, inventions, discoveries, processes, scientific, technical,
engineering and marketing data, object and source codes, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "INTANGIBLES") necessary for the conduct of
its business as now being conducted. To the best knowledge of the Company,
neither the Company nor any Subsidiary of the Company infringes or is in
conflict with any right of any other person with respect to any Intangibles.
Neither the Company nor any of its Subsidiaries has received written notice of
any pending conflict with or infringement upon such third party Intangibles. The
termination of the Company's ownership of, or right to use, any single
Intangible could reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has entered into any consent
agreement, indemnification agreement, forbearance to xxx or settlement agreement
with respect to the validity of the Company's or its Subsidiaries' ownership or
right to use its Intangibles and there is no reasonable basis for any such claim
to be successful. The Intangibles are valid and enforceable and no registration
relating thereto has lapsed, expired or been abandoned or canceled or is the
subject of cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing. The Company and its Subsidiaries have
complied, in all material respects, with their respective contractual
obligations relating to the protection of the Intangibles used pursuant to
licenses. No person is infringing on or violating the Intangibles owned or used
by the Company or its Subsidiaries.
(k) TITLE. The Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good and merchantable title to all personal
property owned by them that is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and
defects, except for (i) a first priority security interest granted in favor of
Silicon Valley Bank to secure the Company's obligations thereto pursuant to that
certain Loan and Security Agreement dated as of September 20, 2002 among the
Company, P-Com Network Services, Inc. and Silicon Valley Bank and that certain
Loan and Security Agreement (EXIM Program) dated as of September 20, 2002 among
the Company, P-Com Network Services, Inc. and Silicon Valley Bank, and (ii) such
other liens, encumbrances and defects as do not, individually or in the
aggregate, materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its Subsidiaries. Any real property and facilities held under lease
by the Company and its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its Subsidiaries.
(l) ENVIRONMENTAL MATTERS. There is no environmental litigation or other
environmental proceeding pending or threatened by any governmental regulatory
authority or others with respect to the current or any former business of the
Company or its Subsidiaries or any partnership or joint venture currently or at
any time affiliated with the Company or its subsidiaries. No state of facts
exists as to environmental matters or Hazardous Substances (as defined below)
that involves the reasonable likelihood of a material capital expenditure by the
Company or its Subsidiaries or that may otherwise have a Material Adverse
Effect. No Hazardous Substances have been treated, stored or disposed of, or
otherwise deposited, in or on the properties owned or leased by the Company or
its Subsidiaries or by any partnership or joint venture currently or at any time
affiliated with the Company or its Subsidiaries in violation of any applicable
environmental laws. The environmental compliance programs of the Company and its
Subsidiaries comply in all respects with all environmental laws, whether
federal, state or local, currently in effect. As used herein, "HAZARDOUS
Substances" means any substance, waste, contaminant, pollutant or material that
has been determined by any governmental authority to be capable of posing a risk
of injury to health, safety, property or the environment.
(m) DISCLOSURE. All information relating to or concerning the Company and/or any
Subsidiary or Subsidiaries set forth in this Agreement or provided to any
Purchaser pursuant to Section 2(d) hereof or otherwise in connection with the
transactions contemplated hereby is true and correct in all material respects
and the Company has not omitted to state any material fact necessary in order to
make the statements made herein or therein, in light of the circumstances under
which they were made, not misleading. No event or circumstance has occurred or
exists with respect to the Company or its Subsidiaries or their respective
businesses, properties, prospects, operations or financial conditions, which has
not been publicly disclosed but, under applicable law, rule or regulation, would
be required to be disclosed by the Company in a registration statement filed on
the date hereof by the Company under the Securities Act with respect to a
primary issuance of the Company's securities.
(n) ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF THE SECURITIES. The Company
acknowledges and agrees that none of the Purchasers is acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement or the transactions contemplated hereby, the relationship between
the Company and the Purchasers is "arms-length" and any statement made by any
Purchaser or any of its representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely incidental to such
Purchaser's purchase of Securities and has not been relied upon by the Company,
its officers or directors in any way. The Company further acknowledges that the
Company's decision to enter into this Agreement has been based solely on an
independent evaluation by the Company and its representatives.
(o) FORM SB-2 ELIGIBILITY. The Company is currently eligible to register the
resale of its Common Stock on a registration statement filed on Form SB-2 under
the Securities Act.
(p) NO GENERAL SOLICITATION. Neither the Company nor any distributor
participating on the Company's behalf in the transactions contemplated hereby
(if any) nor any person acting for the Company, or any such distributor, has
conducted any "general solicitation," as such term is defined in Regulation D,
with respect to any of the Securities being offered hereby.
(q) NO INTEGRATED OFFERING. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf, has directly or indirectly made any
offers or sales of any security or solicited any offers to buy any security
under circumstances that would require registration of the Securities being
offered hereby under the Securities Act or cause this offering of Securities to
be integrated with any prior offering of securities of the Company for purposes
of the Securities Act.
(r) NO BROKERS. The Company has taken no action which would give rise to any
claim by any person for brokerage commissions or finder's fees or for similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby.
(s) ACKNOWLEDGMENT REGARDING SECURITIES. The number of Conversion Shares
issuable upon conversion of the Notes and the number of Warrant Shares issuable
upon exercise of the Warrants may increase in certain circumstances. The
Company's executive officers have studied and fully understand the nature of the
Securities being sold hereunder. The Company acknowledges that its obligation to
issue Conversion Shares upon conversion of the Notes in accordance with the
terms of such Notes and to issue Warrant Shares upon exercise of the Warrants in
accordance with the terms of such Warrants is, other than as set forth in the
Notes or the Warrants, respectively, absolute and unconditional, regardless of
the dilution that such issuance may have on the ownership interests of other
stockholders and the availability of remedies provided for in the Transaction
Documents relating to a failure or refusal to issue Conversion Shares or Warrant
Shares. Taking the foregoing into account, the Company's Board of Directors has
determined in its good faith business judgment that the issuance of the Notes
and Warrants hereunder and the consummation of the other transactions
contemplated hereby are in the best interests of the Company and its
stockholders. The Company's Board of Directors and executive officers fully
intend to honor their obligations hereunder to issue Conversion Shares upon
conversion of the Notes and Warrant Shares upon exercise of the Warrants
regardless of the dilution that such issuance may have on the ownership
interests of other stockholders and the availability of remedies provided for in
the Transaction Documents relating to their failure or refusal to issue
Conversion Shares or Warrant Shares.
4. COVENANTS.
(a) BEST EFFORTS. The parties shall use their best efforts timely to satisfy
each of the conditions described in Sections 6 and 7 of this Agreement.
(b) FORM D: BLUE SKY LAWS. The Company shall file with the SEC a Form D with
respect to the Securities as required under Regulation D and provide a copy
thereof to each Purchaser promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary to qualify the Securities for sale to each Purchaser
pursuant to this Agreement under applicable securities or "blue sky" laws of the
states of the United States or obtain exemption therefrom, and shall provide
evidence of any such action so taken to each Purchaser on or prior to the
Closing Date. Within two (2) trading days after the Closing Date, the Company
shall file a Form 8-K concerning this Agreement and the transactions
contemplated hereby, which Form 8-K shall attach this Agreement and its Exhibits
as exhibits to such Form 0-X (xxx "0-X XXXXXX"). From and after the 8-K Filing,
the Company hereby acknowledges that no Purchaser shall be in possession of any
material nonpublic information received from the Company, any of its
Subsidiaries or any of its respective officers, directors, employees or agents,
that is not disclosed in the 8-K Filing. The Company shall not, and shall cause
each of its Subsidiaries and its and each of their respective officers,
directors, employees and agents not to, provide any Purchaser with any material
nonpublic information regarding the Company or any of its Subsidiaries from and
after the 8-K Filing without the express written consent of such Purchaser;
PROVIDED, HOWEVER, that a Purchaser which exercises its rights under Section
4(m) shall be deemed to have given such express written consent. In the event of
a breach of the foregoing covenant by the Company, any of its Subsidiaries, or
any of its or their respective officers, directors, employees and agents, in
addition to any other remedy provided herein or in the other Transaction
Documents, a Purchaser shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of such material
nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Purchaser shall have any liability to the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees,
shareholders or agents for any such disclosure. Subject to the foregoing,
neither the Company nor any Purchaser shall issue any press releases or any
other public statements with respect to the transactions contemplated hereby;
PROVIDED, HOWEVER, that the Company shall be entitled, without the prior
approval of any Purchaser, to make any press release or other public disclosure
with respect to such transactions (i) in substantial conformity with the 8-K
Filing and contemporaneously therewith and (ii) as is required by applicable law
and regulations (provided that in the case of clause (i) each Purchaser shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release).
(c) REPORTING STATUS. So long as any Purchaser beneficially owns any of the
Securities, the Company shall timely file (within applicable extension periods)
all reports required to be filed with the SEC pursuant to the Exchange Act, and
the Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.
(d) USE OF PROCEEDS. The Company shall use the proceeds from the issuance and
sale of the Securities for general corporate purposes and working capital. Such
proceeds shall not be used to (i) pay dividends; (ii) pay for any increase in
executive compensation or make any loan or other advance to any officer,
employee, shareholder, director or other affiliate of the Company, without the
express approval of the Board of Directors acting in accordance with past
practice; (iii) purchase debt or equity securities of any entity (including
redeeming the Company's own securities), except for (A) the loans contemplated
by clause (x) of this Section 4(d), (B) evidences of indebtedness issued or
fully guaranteed by the United States of America and having a maturity of not
more than one year from the date of acquisition, (C) certificates of deposit,
notes, acceptances and repurchase agreements having a maturity of not more than
one year from the date of acquisition issued by a bank organized in the United
States having capital, surplus and undivided profits of at least $500,000,000,
(D) the highest-rated commercial paper having a maturity of not more than one
year from the date of acquisition, and (E) "Money Market" fund shares, or money
market accounts fully insured by the Federal Deposit Insurance Corporation and
sponsored by banks and other financial institutions, provided that the
investments consist principally of the types of investments described in clauses
(B), (C), or (D) above; or (iv) make any investment not directly related to the
current business of the Company.
(e) FINANCIAL INFORMATION. The Company shall send (via electronic transmission
or otherwise) the following reports to the Purchasers until the Purchasers
transfer, assign or sell all of their Securities: (i) within ten (10) days after
the filing with the SEC, a copy of its Annual Report on Form 10-K, its Quarterly
Reports on Form 10-Q, its proxy statements and any Current Reports on Form 8-K;
and (ii) within one (1) day after release, copies of all press releases issued
by the Company or any of its Subsidiaries.
(f) RESERVATION OF SHARES. The Company shall at all times have authorized and
reserved for the purpose of issuance a sufficient number of shares of Common
Stock to provide for the full conversion of the outstanding Notes and issuance
of the Conversion Shares in connection therewith (subject to obtaining the
Authorized Stock Approval contemplated by Section 4(p) below) and the full
exercise of the Warrants and the issuance of the Warrant Shares in connection
therewith, in each case to the extent required by the Notes and the Warrants.
(g) LISTING. The Company shall promptly secure the listing of the Conversion
Shares and the Warrant Shares upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock become
listed or quoted (subject to official notice of issuance upon conversion of the
Notes or exercise of the Warrants) and shall maintain, so long as any other
shares of Common Stock shall be so listed or quoted, such listing of all
Conversion Shares and Warrant Shares from time to time issuable upon the
conversion of the Notes or the exercise of the Warrants. The Company shall
comply in all material respects with the reporting, filing and other obligations
under the bylaws or rules of any such national securities exchange or automated
quotation system on which its shares of Common Stock are listed or quoted. The
Company shall promptly provide to each holder of Notes and/or Warrants copies of
any notices it receives regarding the continued eligibility of the Common Stock
for trading on any national securities exchange or automated quotation system on
which securities of the same class or series issued by the Company are then
listed or quoted, if any.
(h) CORPORATE EXISTENCE. So long as a Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence, and in the event
of a merger, consolidation or sale of all or substantially all of the Company's
assets, the Company shall ensure that the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the other
Transaction Documents and (ii) is a publicly traded corporation.
(i) NO INTEGRATED OFFERINGS. The Company shall not make any offers or sales of
any security (other than the Securities) under circumstances that would require
registration of the Securities being offered or sold hereunder under the
Securities Act or cause this offering of the Securities to be integrated with
any other offering of securities by the Company for purposes of any stockholder
approval provision applicable to the Company or its securities.
(j) LEGAL COMPLIANCE. The Company shall conduct its business and the business of
its subsidiaries in compliance with all laws, ordinances or regulations of
governmental entities applicable to such businesses, except where the failure to
do so would not have a Material Adverse Effect.
(k) REDEMPTIONS AND DIVIDENDS. So long as any Purchaser holds any Notes, the
Company shall not, without first obtaining the written approval of the holders
of a majority of the aggregate principal amount of the Notes then outstanding,
repurchase, redeem or declare or pay any cash dividend or distribution on any
shares of capital stock of the Company.
(l) INFORMATION. So long as any Purchaser holds any Notes, the Company shall
furnish to such Purchaser:
(i) concurrently with the filing with the SEC of its annual reports on Form
10-K, a certificate of the President, a Vice President or a senior financial
officer of the Company stating that, based upon such examination or
investigation and review of this Agreement as in the opinion of the signer is
necessary to enable the signer to express an informed opinion with respect
thereto, neither the Company nor any of its Subsidiaries is or has during such
period been in default in the performance or observance of any of the terms,
covenants or conditions hereof, or, if the Company or any of its Subsidiaries
shall be or shall have been in default, specifying all such defaults, and the
nature and period of existence thereof, and what action the Company or such
Subsidiary has taken, is taking or proposes to take with respect thereto; and
(ii) the information the Company must deliver to any holder or to any
prospective transferee of Securities in order to permit the sale or other
transfer of such Securities pursuant to Rule 144A of the SEC or any similar rule
then in effect.
The Company shall keep at its principal executive office a true copy of this
Agreement (as at the time in effect), and cause the same to be available for
inspection at such office during normal business hours by any holder of
Securities or any prospective transferee of Securities designated by a holder
thereof.
(m) INSPECTION OF PROPERTIES AND BOOKS. So long as any Purchaser shall
beneficially own any Securities, such Purchaser and its representatives and
agents (collectively, the "INSPECTORS") shall have the right, at such
Purchaser's expense, to visit and inspect any of the properties of the Company
and of its Subsidiaries, to examine the books of account and records of the
Company and of its Subsidiaries, to make or be provided with copies and extracts
therefrom, to discuss the affairs, finances and accounts of the Company and of
its Subsidiaries with, and to be advised as to the same by, its and their
officers, employees and independent public accountants (and by this provision
the Company authorizes such accountants to discuss such affairs, finances and
accounts, whether or not a representative of the Company is present) all at such
reasonable times and intervals and to such reasonable extent as such Purchaser
may desire; PROVIDED, HOWEVER, that each Inspector shall hold in confidence and
shall not make any disclosure (except to such Purchaser) of any such information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (i) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
registration statement covering the Securities, (ii) the release of such
information is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, or (iii) such information has been
made generally available to the public other than by disclosure in violation of
this or any other agreement. Each Purchaser agrees that it shall, upon learning
that disclosure of such information is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the information
deemed confidential.
(n) CONFIDENTIAL AGREEMENT. Except for any disclosure required by applicable law
or rules of the SEC, the Company and each Purchaser shall, and shall direct its
respective representatives to, hold in confidence all information concerning
this Agreement and the transactions contemplated hereby until the earlier of
such time as (i) the Company has made a public announcement concerning the
Agreement and the transactions contemplated hereby or (ii) this Agreement is
terminated.
(o) EXPENSES. Each Party shall pay its own out-of-pocket expenses incurred by
it, its affiliates, and its or their advisors in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Transaction Documents, including, without limitation, such advisors' reasonable
due diligence and attorneys' fees and expenses (the "EXPENSES").
(p) STOCKHOLDER APPROVAL. The Company shall call a meeting of its stockholders
to be held as promptly as practicable (but in any event no later than 120 days
after the Closing Date) for the purpose of voting upon and approving (i) the
increase in the number of authorized shares of the Company's Common Stock to a
number sufficient to provide for the conversion of all of the Notes issued by
the Company to the Purchasers pursuant hereto (the "AUTHORIZED STOCK APPROVAL"),
and (ii) the anti-dilution and other conversion/exercise price adjustments
contained in the Notes and the Warrants, the approval for which is required by
Article VII, Section 8 of the Company's Bylaws (the "PRICE ADJUSTMENT APPROVAL"
and, together with the Authorized Stock Approval, the "STOCKHOLDER APPROVAL").
The Company shall recommend to its stockholders approval of such matters. The
Company shall use its best efforts to solicit from its stockholders proxies in
favor of such matters sufficient to obtain the Stockholder Approval, and shall
vote such proxies, and shall use its best efforts to cause all "affiliates" (as
such term is defined in Rule 12b-2 promulgated under the Exchange Act) of the
Company to vote any shares of Common Stock beneficially owned by such persons or
entities, in favor of such matters. In the event and upon obtaining the
Authorized Stock Approval, the Company shall take all such corporate action as
shall be necessary to reserve the Conversion Shares for issuance upon conversion
of the Notes in accordance with the terms thereof. Unless and until such time as
the Company obtains the Price Adjustment Approval, the Company shall not sell or
issue any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock for consideration per
share (which shall include the total amount of consideration, if any, received
by the Company for such sale or issuance plus, in the case of securities that
are convertible into or exercisable or exchangeable for shares of Common Stock,
the minimum amount of consideration, if any, payable to the Company upon
conversion into or exercise or exchange for each share of Common Stock) that is
less than the Exercise Price of the Series B Warrants then in effect.
5. TRANSFER AGENT INSTRUCTIONS.
(a) The Company shall instruct its transfer agent to issue certificates (subject
to the legend and other provisions hereof and in the Notes and the Warrants),
registered in the name of each Purchaser or its nominee, for the Conversion
Shares and the Warrant Shares in such amounts as specified from time to time by
such Purchaser to the Company upon conversion of the Notes or exercise of the
Warrants, as applicable. To the extent and during the periods provided in
Sections 2(f) and 2(g) of this Agreement, all such certificates shall bear the
restrictive legend specified in Section 2(g) of this Agreement.
(b) The Company warrants that no instruction other than such instructions
referred to in this Section 5 and stop transfer instructions to give effect to
Section 2(f) hereof in the case of the transfer of the Conversion Shares or
Warrant Shares prior to registration of the Conversion Shares and Warrant Shares
under the Securities Act or without an exemption therefrom, shall be given by
the Company to its transfer agent and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement. Nothing in this Section shall affect in any way each
Purchaser's obligations and agreement set forth in Section 2(g) hereof to resell
the Securities pursuant to an effective registration statement or under an
exemption from the registration requirements of applicable securities law.
(c) If any Purchaser provides the Company and the transfer agent with an opinion
of counsel, which opinion of counsel shall be in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that
the Securities have been sold or transferred pursuant to an exemption from
registration, or any Purchaser provides the Company with an opinion of counsel,
which opinion of counsel shall be in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that such
Securities may be sold under Rule 144(k), the Company shall permit the transfer
and, in the case of the Conversion Shares and Warrant Shares, promptly instruct
its transfer agent to issue one or more certificates in such name and in such
denominations as specified by such Purchaser.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Notes and
the Warrants to the Purchasers and to otherwise consummate the transactions
contemplated hereby is subject to the satisfaction, at or before the Closing, of
each of the following conditions thereto, provided that these conditions are for
the Company's sole benefit and may be waived by the Company at any time in its
sole discretion.
(a) Each Purchaser shall have executed such Purchaser's Execution Page to this
Agreement and the Registration Rights Agreement and delivered the same to the
Company.
(b) Each Purchaser shall have delivered the amount of such Purchaser's Purchase
Price to the Company by wire transfer in accordance with the Company's written
wiring instructions.
(c) The representations and warranties of each Purchaser shall be true and
correct as of the date when made and as of the Closing Date as though made at
that time (except for representations and warranties that speak as of a specific
date, which representations and warranties shall be true and correct as of such
date), and such Purchaser shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by such Purchaser at or
prior to the Closing Date.
(d) No statute, rule, regulation, executive order, decree, ruling or injunction
shall have been enacted, entered, promulgated or endorsed by any court or
governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which
prohibits the consummation of any of the transactions contemplated by this
Agreement. 7. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE. The
obligation of each Purchaser hereunder to purchase the Notes and the Warrants
from the Company and to otherwise consummate the transactions contemplated
hereby is subject to the satisfaction, at or before the Closing Date, of each of
the following conditions, provided that such conditions are for such Purchaser's
sole benefit and may be waived by such Purchaser at any time in such Purchaser's
sole discretion:
(a) The Company shall have executed this Agreement, the Registration Rights
Agreement and the Security Documents, and delivered executed original copies of
the same to such Purchaser.
(b) The Company shall have delivered to such Purchaser duly executed Notes and
Warrants (each in such denominations as such Purchaser shall request),
registered in such Purchaser's name.
(c) The representations and warranties of the Company shall be true and correct
as of the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such date)
and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior
to the Closing Date.
(d) No statute, rule, regulation, executive order, decree, ruling, injunction,
action or proceeding shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which questions the validity of, challenges or prohibits the consummation
of, any of the transactions contemplated by this Agreement.
(e) Each Purchaser shall have received an opinion of the Company's counsel,
dated as of the Closing Date, in form, scope and substance reasonably
satisfactory to the Purchaser and in substantially the form of EXHIBIT H
attached hereto.
(f) There shall have been no material adverse changes and no material adverse
developments in the business, properties, operations, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, since the date hereof, and no information, of which the Purchasers are
not currently aware, shall come to the attention of the Purchasers that is
materially adverse to the Company.
(g) Each Purchaser shall have received a copy of resolutions, duly adopted by
the Board of Directors of the Company, which shall be in full force and effect
at the time of the applicable Closing, authorizing the consummation by the
Company of the transactions contemplated hereby and by the other Transaction
Documents, certified as such by the Secretary or Assistant Secretary of the
Company.
8. COLLATERAL AGENCY PROVISIONS.
(a) APPOINTMENT OF COLLATERAL AGENT. The Purchasers hereby appoint North Sound
Legacy Institutional Fund LLC, to act as collateral agent (the "COLLATERAL
AGENT") and North Sound Legacy Institutional Fund LLC, agrees to act as
Collateral Agent for the Purchasers, as contemplated herein and in the Security
Documents.
(b) COLLATERAL AGENT AUTHORIZED TO ENTER INTO COLLATERAL DOCUMENTS. Each of the
Purchasers authorizes the Collateral Agent to enter into the Security Documents
on its behalf.
(c) AMENDMENT TO SECURITY DOCUMENTS. The Purchasers holding a majority of the
total outstanding principal balance of the Notes (the "REQUIRED HOLDERS") shall
have the right to direct the Collateral Agent, from time to time, to consent to
any amendment, modification or supplement to or waiver of any provision of any
Security Document and to release any Collateral (as defined in the Security
Documents) from any lien or security interest held by the Collateral Agent;
PROVIDED, HOWEVER, that (i) no such direction shall require the Collateral Agent
to consent to the modification of any provision or portion thereof which (in the
sole judgment of the Collateral Agent) is intended to benefit the Collateral
Agent, (ii) the Collateral Agent shall have the right to decline to follow any
such direction if the Collateral Agent shall determine in good faith that the
directed action is not permitted by the terms of any Security Document or may
not lawfully be taken and (iii) no such direction shall waive or modify any
provision of any Security Document the waiver or modification of which requires
the consent of all Purchasers unless all Purchasers consent thereto. The
Collateral Agent may rely on any such direction given to it by the Required
Holders and shall be fully protected in relying thereon, and shall under no
circumstances be liable, except in circumstances involving the Collateral
Agent's gross negligence or willful misconduct as shall have been determined in
a final nonappealable judgment of a court of competent jurisdiction, to any
holder of the Notes or any other person or entity for taking or refraining from
taking action in accordance with any direction or otherwise in accordance with
any of the Security Documents.
(d) DUTIES OF COLLATERAL AGENT.
(i) POWERS. The Collateral Agent shall have and may exercise such powers under
the Security Documents as are specifically delegated to the Collateral Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. The Collateral Agent shall not have any implied duties or
any obligations to take any action under the Security Documents except any
action specifically provided by the Security Documents to be taken by the
Collateral Agent.
(ii) RELIANCE ON INSTRUCTIONS OF REQUIRED HOLDERS. The Collateral Agent shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the written instructions of the Required
Holders and such instructions shall be binding upon all the Purchasers;
PROVIDED, HOWEVER, that the Collateral Agent shall not be required to take any
action which the Collateral Agent in good faith believes (A) could reasonably be
expected to expose it to personal liability or (B) is contrary to this
Agreement, the Security Documents and applicable law.
(iii) ACTION WITHOUT INSTRUCTIONS AFTER EVENT OF DEFAULT. Absent written
instructions from the Required Holders at a time when an Event of Default shall
have occurred and be continuing, the Collateral Agent may take, but shall have
no obligation to take, any and all actions under the Security Documents or any
of them or otherwise as it shall deem to be in the best interests of the
Purchasers; PROVIDED, HOWEVER, that in the absence of written instructions from
the Required Holders, the Collateral Agent shall not exercise remedies available
to it under any Security Document with respect to the Collateral or any part
thereof (other than preserving, collecting and protecting the Collateral and the
proceeds thereof).
(iv) INDEPENDENT RIGHT OF EACH PURCHASER TO INSTRUCT COLLATERAL AGENT. The right
of each Purchaser to instruct the Collateral Agent is the separate and
individual property of such Purchaser and may be exercised as such Purchaser
sees fit in its sole discretion and with no liability to any other such
Purchaser for the exercise or non-exercise thereof. Without limiting the
foregoing, the Required Holders shall not be liable under any circumstances to
any other Purchaser for any action taken or omitted to be taken hereunder by the
Collateral Agent upon written instructions from the Required Holders.
(v) RELATIONSHIP BETWEEN COLLATERAL AGENT AND PURCHASERS. The relationship
between the Collateral Agent and the Purchasers is and shall be only to the
extent explicitly provided for herein that of agent and principal and nothing
herein contained shall be construed to constitute the Collateral Agent a trustee
for any Purchaser or to impose on the Collateral Agent duties and obligations
other than those expressly provided for herein. Without limiting the generality
of the foregoing, neither the Collateral Agent nor any of its directors,
officers, employees, partners or agents shall:
(A) be responsible to the other Purchasers for any
recitals, representations or warranties contained
in, or for the execution, validity, genuineness, perfection, effectiveness or
enforceability of, the Security Documents (it being expressly understood that
any determination of the foregoing is the responsibility of each Purchaser),
(B) be responsible to the other Purchasers for the
validity, genuineness, perfection, effectiveness,
enforceability, existence, value or enforcement of any security interest in the
Collateral (it being expressly understood that any determination of the
foregoing is the responsibility of each Purchaser),
(C) be under any duty to inquire into or pass upon
any of the foregoing matters, or to make any
inquiry concerning the performance by any person or entity of its or their
obligations under any Security Document (it being expressly understood that any
determination of the foregoing is the responsibility of each Purchaser),
(D) be deemed to have knowledge of the occurrence of
an Event of Default (as defined in the Notes), or
any event, condition or circumstance the occurrence of which would, with the
giving of notice or the passage of time or both, constitute an Event of Default,
(E) be responsible or liable to the Purchasers for
any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located
regardless of the cause thereof unless the same shall happen solely through the
gross negligence or willful misconduct of the Collateral Agent as shall have
been determined in a final nonappealable judgment of a court of competent
jurisdiction,
(F) have any liability to the Purchasers for any
error or omission or action or failure to act of any
kind made in the settlement, collection or payment in connection with any of the
Security Documents or any of the Collateral or any instrument received in
payment therefor or for any damage resulting therefrom other than as a sole
result of its own gross negligence or willful misconduct as shall have been
determined in a final nonappealable judgment of a court of competent
jurisdiction, or
(G) in any event, be liable to the Purchasers as such
for any action taken or omitted by it, absent,
in each case described in this subsection, its gross negligence or willful
misconduct as shall have been determined in a final nonappealable judgment of a
court of competent jurisdiction.
(e) STANDARD OF CARE. Each Purchaser agrees with all other Purchasers and the
Collateral Agent that nothing contained in this Agreement shall be construed to
give rise to, nor shall such Purchaser have, any claims whatsoever against the
Collateral Agent on account of any act or omission to act in connection with the
exercise of any right or remedy of the Collateral Agent with respect to the
Security Documents or the Collateral in the absence of gross negligence or
willful misconduct of the Collateral Agent as shall have been determined in a
final nonappealable judgment of a court of competent jurisdiction.
(f) COLLATERAL IN POSSESSION OF COLLATERAL AGENT. The Collateral Agent shall be
at liberty to place any of the Collateral, this Agreement, the Security
Documents and any other instruments, documents or deeds delivered to it pursuant
to or in connection with any of such documents in any safe deposit box, safe or
receptacle selected by it or with any bank, any company whose business includes
undertaking the safe custody of documents or any firm of lawyers of good repute
and the Collateral Agent shall not be responsible for any loss thereby incurred
unless such loss is solely the result of the Collateral Agent's gross negligence
or willful misconduct as shall have been determined in a final nonappealable
judgment of a court of competent jurisdiction. The Collateral Agent's books and
records shall at all times show that the Collateral is held by the Collateral
Agent subject to the pledge and lien of the Security Documents.
(g) AGENTS, OFFICERS AND EMPLOYEES OF COLLATERAL AGENT. The Collateral Agent may
execute any of its duties under the Security Documents by or through its agents,
officers or employees. Neither the Collateral Agent nor any of its agents,
officers or employees shall be liable for any action taken or omitted to be
taken by it or them in good faith, be responsible for the consequence of any
oversight or error of judgment or answerable for any loss unless any of the
foregoing shall happen through its or their gross negligence or willful
misconduct as shall have been determined in a final nonappealable judgment of a
court of competent jurisdiction.
(h) APPOINTMENT OF CO-AGENT. Whenever the Collateral Agent shall deem it
necessary or prudent in order either to conform to any law of any jurisdiction
in which all or any part of the Collateral shall be situated or to make any
claim or bring any suit with respect to the Collateral or the Security
Documents, or in the event that the Collateral Agent shall have been requested
to do so by or on behalf of the Required Holders, the Collateral Agent shall
execute and deliver a supplemental agreement and all other instruments and
agreements necessary or proper to constitute a bank or trust company, or one or
more other persons or entities approved by the Collateral Agent, either to act
as co-agent or co-agents with respect to all or any part of the Collateral or
with respect to the Security Documents, jointly with the Collateral Agent or any
successor or successors, or to act as separate agent or agents of any such
property, in any such case with such powers as may be provided in such
supplemental agreement, and to vest in such bank, trust company or other persons
or entities as such co-agent or separate agent, as the case may be, any
property, title, right or power of the Collateral Agent deemed necessary or
advisable by the Required Holders or the Collateral Agent.
(i) RELIANCE ON CERTAIN DOCUMENTS. The Collateral Agent shall be entitled to
rely on any communication, instrument or document believed by it to be genuine
and correct and to have been signed or sent by the proper person or entity, and
with respect to all legal matters shall be entitled to rely on the advice of
legal advisors selected by it concerning all matters relating to the Security
Documents and its duties hereunder and thereunder and otherwise shall rely on
such experts as it deems necessary or desirable, and shall not be liable to any
Purchaser or any other person or entity for the consequences of such reliance in
the absence of gross negligence or willful misconduct as shall have been
determined in a final nonappealable judgment of a court of competent
jurisdiction.
(j) COLLATERAL AGENT MAY HAVE SEPARATE RELATIONSHIP WITH PARTIES. The Collateral
Agent (or any affiliate of the Collateral Agent) may, notwithstanding the fact
that it is the Collateral Agent, act as a lender to the Company and lend money
to, and generally engage in any kind of business with such party in the same
manner and to the same effect as though it were not the Collateral Agent; and
such business shall not constitute a breach of any obligation of the Collateral
Agent to the other Purchasers.
(k) INDEMNIFICATION OF COLLATERAL AGENT. Each of the Purchasers, ratably on the
basis of the respective principal amounts of the Notes outstanding at the time
of the occurrence giving rise to the below liabilities, losses, etc., agrees to
indemnify the Collateral Agent for any and all liabilities, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Collateral Agent in its capacity as the Collateral Agent, in any way
relating to or arising out of the Security Documents or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
thereof, provided that neither the Company nor any Purchaser shall be liable for
any of the foregoing to the extent they arise from gross negligence or willful
misconduct on the part of the Collateral Agent as shall have been determined in
a final nonappealable judgment of a court of competent jurisdiction. This
Section 8(k) shall survive the termination of this Agreement. Prior to taking
any action hereunder as Collateral Agent, the Collateral Agent may require each
Purchaser to deposit with it sufficient sums as it determines in good faith is
necessary to protect the Collateral Agent for costs and expenses associated with
taking such action, and the Collateral Agent shall have no liability hereunder
for failure to take such action unless the Purchasers promptly deposit such
sums.
(l) RESIGNATION. The Collateral Agent at any time may resign, upon 30 days'
prior written notice, by an instrument addressed and delivered to the Purchasers
and the Company and may be removed at any time with or without cause upon 30
days' prior written notice, by an instrument in writing duly executed by duly
authorized signatories of the Required Holders. The Required Holders shall also
have the right to appoint a successor to the Collateral Agent upon any such
resignation or removal, by instrument of substitution complying with the
requirements of applicable law, or, in the absence of any such requirement,
without any formality other than appointment and designation in writing, a copy
of which instrument or writing shall be sent to each Purchaser. Upon the making
of such appointment and delivery to such successor Collateral Agent of the
Collateral then held by the retiring Collateral Agent, such successor Collateral
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties conferred hereby and by the Security Documents upon the
Collateral Agent named herein, and one or more such appointments and
designations shall not exhaust the right to appoint and designate further
successor Collateral Agents hereunder. The retiring Collateral Agent shall not
be discharged from its duties and obligations hereunder until, and the retiring
Collateral Agent shall be so discharged when, all the Collateral held by the
retiring Collateral Agent has been delivered to the successor Collateral Agent
and such successor Collateral Agent shall execute, acknowledge and deliver to
each holder of the Notes and to the Company an instrument accepting such
appointment. If no successor shall be appointed and approved on or prior to the
date of any such resignation, the resigning Collateral Agent may apply to any
court of competent jurisdiction to appoint a successor to act until a successor
shall have been appointed by the Required Holders as above provided.
(m) RIGHTS WITH RESPECT TO COLLATERAL.
(i) Each Purchaser agrees with all other Purchasers (A) that it shall not, and
shall not attempt to, exercise any rights with respect to its security interest
in the Collateral, whether pursuant to any other agreement or otherwise (other
than pursuant to this Agreement), or take or institute any action against the
Collateral Agent or any of the other Purchasers in respect of the Collateral or
its rights hereunder (other than any such action arising from the breach of this
Agreement) and (B) that such Purchaser has no other rights with respect to the
Collateral other than as set forth in this Agreement and the Security Documents.
(ii) Each Purchaser agrees with all other Purchasers and the Collateral Agent
that nothing contained in this Section 8 shall be construed to give rise to, nor
shall such Purchaser have, any claims whatsoever against any other Purchaser or
the Collateral Agent on account of any act or omission to act in connection with
the exercise of any right or remedy of the Collateral Agent or any other
Purchaser with respect to the Collateral in the absence of gross negligence or
willful misconduct of such other Purchaser or Collateral Agent, as applicable,
as shall have been determined in a final nonappealable judgment of a court of
competent jurisdiction.
9. GOVERNING LAW; MISCELLANEOUS.
(a) GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in the State of Delaware. The Company and the
Purchasers irrevocably consent to the jurisdiction of the United States federal
courts and the state courts located in the State of Delaware in any suit or
proceeding based on or arising under this Agreement and irrevocably agree that
all claims in respect of such suit or proceeding may be determined in such
courts. The Company irrevocably waives the defense of an inconvenient forum to
the maintenance of such suit or proceeding. The Company further agrees that
service of process upon the Company mailed by first class mail shall be deemed
in every respect effective service of process upon the Company in any such suit
or proceeding. Nothing herein shall affect the right of any Purchaser to serve
process in any other manner permitted by law. The Company agrees that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.
(b) COUNTERPARTS. This Agreement may be executed in two or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party. This Agreement, once executed by a party, may be delivered to the
other parties hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement. In the event
any signature is delivered by facsimile transmission, the party using such means
of delivery shall cause the manually executed Execution Page(s) hereof to be
physically delivered to the other party within five (5) days of the execution
hereof, provided that the failure to so deliver any manually executed Execution
Page shall not affect the validity or enforceability of this Agreement.
(c) CONSTRUCTION. Whenever the context requires, the gender of any word used in
this Warrant includes the masculine, feminine or neuter, and the number of any
word includes the singular or plural. Unless the context otherwise requires, all
references to articles and sections refer to articles and sections of this
Agreement, and all references to schedules are to schedules attached hereto,
each of which is made a part hereof for all purposes. The descriptive headings
of the several articles and sections of this Agreement are inserted for purposes
of reference only, and shall not affect the meaning or construction of any of
the provisions hereof.
(d) SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
(e) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other Transaction
Documents contain the entire understanding of the Purchasers, the Company, their
affiliates and persons acting on their behalf with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Purchaser makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived other than by an instrument in writing signed by
the party to be charged with enforcement and no provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and each
Purchaser.
(f) NOTICES. Any notices required or permitted to be given under the terms of
this Agreement shall be sent by certified or registered mail (return receipt
requested) or delivered personally, by responsible overnight carrier or by
confirmed facsimile, and shall be effective five (5) days after being placed in
the mail, if mailed, or upon receipt or refusal of receipt, if delivered
personally or by responsible overnight carrier or confirmed facsimile, in each
case addressed to a party. The initial addresses for such communications shall
be as follows, and each party shall provide notice to the other parties of any
change in such party's address:
(i) If to the Company:
P-Com, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
with a copy simultaneously transmitted by like
means to (which transmittal shall not
constitute notice hereunder):
Xxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
(ii) If to any Purchaser, to such address set forth under such Purchaser's name
on the Execution Page hereto executed by such Purchaser.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and assigns. Except as provided
herein, the Company shall not assign this Agreement or any rights or obligations
hereunder. Any Purchaser may assign or transfer the Securities pursuant to the
terms of the Notes, the Warrants and this Agreement, as applicable, or assign
such Purchaser's rights hereunder or thereunder to any other person or entity,
except for direct competitors of the Company or persons or entities that have
publicly announced plans to compete directly with the Company. In addition, and
notwithstanding anything to the contrary contained in this Agreement or the
other Transaction Documents, the Securities may be pledged and all rights of any
Purchaser under this Agreement or any other Transaction Document may be
assigned, without further consent of the Company, to a bona fide pledgee in
connection with such Purchaser's margin or brokerage account.
(h) THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
person; provided that Section 4(o) may be enforced by SDS Capital.
(i) SURVIVAL. The representations and warranties of the Company and the
agreements and covenants set forth in Sections 3, 4, 5, 8 and 9 hereof shall
survive the Closing notwithstanding any due diligence investigation conducted by
or on behalf of any Purchaser. Moreover, none of the representations and
warranties made by the Company herein shall act as a waiver of any rights or
remedies any Purchaser may have under applicable U.S. federal or state
securities laws.
(j) PUBLICITY. The Company and each Purchaser shall have the right to approve
before issuance any press releases, SEC filings, or any other public statements
with respect to the transactions contemplated hereby; PROVIDED, HOWEVER, that
the Company shall be entitled, without the prior approval of the Purchasers, to
make any press release or SEC filings with respect to such transactions as is
required by applicable law and regulations (although the Purchasers shall be
consulted by the Company in connection with any such press release and filing
prior to its release and shall be provided with a copy thereof).
(k) FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(l) JOINT PARTICIPATION IN DRAFTING. Each party to this Agreement has
participated in the negotiation and drafting of this Agreement and the other
Transaction Documents. As such, the language used herein and therein shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party to
this Agreement.
(m) EQUITABLE RELIEF. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to each Purchaser by vitiating
the intent and purpose of the transactions contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
hereunder (including, but not limited to, its obligations pursuant to Section 5
hereof) will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement (including, but not
limited to, its obligations pursuant to Section 5 hereof), that each Purchaser
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer of the
Securities, without the necessity of showing economic loss and without any bond
or other security being required.
(n) INDEMNIFICATION BY COMPANY. From and after the Closing, the Company shall
hold harmless and indemnify each of the Purchasers from and against, and shall
compensate and reimburse each of the Purchasers for, any damages (including
reasonable attorneys fees) which are directly or indirectly suffered or incurred
by any of the Purchasers or to which any of the Purchasers may otherwise become
subject (regardless of whether or not such damages relate to any third-party
claim) and which arise from or as a result of, or are directly or indirectly
connected with any inaccuracy in or breach of any of the Company's
representations, warranties or covenants set forth herein. In the event of the
assertion or commencement by any person of any claim or legal proceeding with
respect to which any Purchaser may have indemnification rights pursuant to this
Section 9(n), such Purchaser shall promptly notify the Company thereof in
writing, but the failure to so notify the Company will not limit any Purchaser's
rights to indemnification hereunder, except to the extent the Company
demonstrates that the defense of such action is prejudiced by the failure to so
give such notice.
(o) ADDITIONAL ACKNOWLEDGEMENT. Each Purchaser acknowledges that it has
independently evaluated the merits of the transactions contemplated by this
Agreement and the other Transaction Documents, that it has independently
determined to enter into the transactions contemplated hereby and thereby, that
it is not relying on any advice from or evaluation by any other Purchaser, and
that it is not acting in concert with any other Purchaser in making its purchase
of securities hereunder. The Purchasers and, to its knowledge, the Company agree
that the Purchasers have not taken any actions that would deem such Purchasers
to be members of a "group" for purposes of Section 13(d) of the Exchange Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
P-COM, INC.
By: /s/ XXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PURCHASER:
NORTH SOUND LEGACY FUND LLC
By: /S/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
Residence: __________________
Address: 00 Xxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone:
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
PRINCIPAL NOTE AMOUNT ("PNA"): $12,900.00
SERIES A WARRANT SHARES: 21,500
SERIES B WARRANT SHARES: 30,100
------
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
P-COM, INC.
By: /S/ XXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PURCHASER:
NORTH SOUND LEGACY INSTITUTIONAL FUND LLC
By: /S/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
Residence: __________________
Address: 00 Xxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone:
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
PRINCIPAL NOTE AMOUNT ("PNA"): $145,200.00
SERIES A WARRANT SHARES: 242,000
SERIES B WARRANT SHARES: 338,800
-------
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have
caused this Agreement to be duly executed as of the date first above written.
P-COM, INC.
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PURCHASER:
NORTH SOUND LEGACY INTERNATIONAL LTD.
By: /s/ XXXXXX XXXXXX
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
Residence: _____________________
Address: 00 Xxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone:
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxx
PRINCIPAL NOTE AMOUNT ("PNA"): $141,900.00
SERIES A WARRANT SHARES: 236,500
SERIES B WARRANT SHARES: 331,100
-------
