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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 13, 2000
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P-Com, Inc.
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(Exact name of registrant as specified in charter)
Delaware 0-25356 77-0289371
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3175 S. Winchester Boulevard, Campbell, California 95008
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 866-3666
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None
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
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On January 13, 2000, the Registrant issued a press release
announcing the closing of the sale of approximately 7,531,000 shares of newly
issued common stock for an aggregate purchase price of $43,000,000, and also
announcing that the Registrant was entering into a secured loan agreement with
Greyrock Capital, a division of Banc of America Commercial Finance Corporation.
A portion of the new equity and debt financing has been used to repay the
Registrant's entire indebtedness to Union Bank of California and Bank of America
under a preexisting credit agreement. A copy of the press release is attached
hereto and incorporated herein by reference.
Statements in this report that are forward looking involve known
and unknown risks and uncertainties, which may cause the Registrant's actual
results in future periods to be materially different from any future performance
that may be suggested in this release. Such factors may include, but are not
limited to, fluctuations in customer demand and commitments, both in timing and
volume, introduction of new products, commercial acceptance and viability of new
products and expenses associated therewith, cancellations of orders without
penalties, pricing and competition, the Registrant's ability to have available
an appropriate amount of production capacity in a timely manner, the ability of
the Registrant's customers to finance their purchases of the Registrant's
products and/or services, the timing of new technology and product
introductions, reliance upon subcontractors, and the pending stockholder class
action lawsuits. Further, the Registrant operates in an industry sector where
securities values are highly volatile and may be influenced by economic and
other factors beyond the Registrant's control, such as announcements by
competitors and service providers. Reference is made to the discussion of risk
factors detailed in the Company's filings with the Securities and Exchange
Commission, including its reports on Form 10-K and 10-Q.
Item 7. Financial Statement and Exhibits.
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The following documents are filed as exhibits to this report:
1) Exhibit 10.60 - Common Stock PIPES Purchase Agreement, dated
January 6, 2000, by and among P-Com and several investors.
2) Exhibit 10.61 - Loan and Security Agreement, dated January
14, 2000, by and between P-Com and Greyrock Capital.
3) Exhibit 10.62 - Warrant to Purchase Stock, dated January 14,
2000, to Greyrock Capital.
4) Exhibit 10.63 - Registration Rights Agreement, dated January
14, 2000, by and between P-Com and Greyrock Capital.
5) Exhibit 10.64 - Antidilution Agreement, dated January 14,
2000, by and between P-Com and Greyrock Capital.
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6) Exhibit 10.65 - Warrant to Purchase Stock, dated January 14,
2000, to Silicon Valley Bank.
7) Exhibit 10.66 - Registration Rights Agreement, dated
January 14, 2000, by and between P-Com and Silicon Valley Bank.
8) Exhibit 10.67 - Antidilution Agreement, dated January 14,
2000, by and between P-Com and Silicon Valley Bank.
9) Exhibit 99.1 - Press Release, dated January 13, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
P-COM, INC.
DATE: January 25, 2000 By: /s/ George P. Roberts
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Name: George P. Roberts
Title: Chief Executive Officer
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EXHIBIT INDEX
Exhibit
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10.60 Common Stock PIPES Purchase Agreement, dated January 6, 2000, by and
among P-Com and several investors.
10.61 Loan and Security Agreement, dated January 14, 2000, by and between P-
Com and Greyrock Capital.
10.62 Warrant to Purchase Stock, dated January 14, 2000, to Greyrock
Capital.
10.63 Registration Rights Agreement, dated January 14, 2000, by and between
P-Com and Greyrock Capital.
10.64 Antidilution Agreement, dated January 14, 2000, by and between P-Com
and Greyrock Capital.
10.65 Warrant to Purchase Stock, dated January 14, 2000, to Silicon Valley
Bank.
10.66 Registration Rights Agreement, dated January 14, 2000, by and between
P-Com and Silicon Valley Bank.
10.67 Antidilution Agreement, dated January 14, 2000, by and between P-Com
and Silicon Valley Bank.
99.1 Press Release, dated January 13, 2000.
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EXHIBIT 10.60
COMMON STOCK PIPES PURCHASE AGREEMENT
THIS COMMON STOCK PIPES PURCHASE AGREEMENT (the "Agreement") is made as of
January 6, 2000, by and among P-Com, Inc., a Delaware corporation (the
"Company"), and the investors listed on Schedule A attached hereto (each an
"Investor" and collectively the "Investors").
RECITALS:
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A. The Company desires to sell shares of the Company's Common Stock,
$.0001 par value ("Common Stock") to the Investors, and the Investors desire to
purchase shares of Common Stock, on the terms and subject to the conditions set
forth in this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1. Purchase and Sale of Common Stock.
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1.1 Sale and Issuance of Common Stock. The Company shall sell to each
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Investor and each Investor shall purchase from the Company, on the date of the
Closing (as defined in Section 1.2 below), at a price per share equal to the
Formula Price (as defined in Section 1.3 below), that number of shares of Common
Stock equal to the quotient of dollar value of such Investor's investment as
indicated on Schedule A divided by the Formula Price, as defined below (the
"Shares").
1.2 Closing. The purchase and sale of the Shares shall take place at
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11:00 a.m. Pacific Standard Time promptly after the Trigger Time (as defined
below), at the offices of Brobeck, Phleger & Harrison LLP, 550 West "C" Street,
San Diego, California 92101, or on such date and at such time and place as the
Company and the Investors shall mutually agree (the "Closing"). At the Closing
the Company shall deliver to each Investor a stock certificate representing the
Shares purchased by it against delivery to the Company (or to an
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escrow account designated by the Company) by each Investor of the quantity of
funds indicated adjacent to such Investor's name on Schedule A by wire transfer
to the Company (or to an escrow account designated by the Company). The "Trigger
Time" means the first moment on which the aggregate borrowings of the Company
from Foothill Capital Corporation or Greyrock Capital equal or exceed
$12,000,000 provided however, if the Company does not borrow at least
$12,000,000 from either Foothill Capital Corporation or Greyrock Capital but the
gross proceeds deposited into the Investor Trust Account (defined below) from
the sale of the Shares hereunder equal or exceed $42,999,975 then the "Trigger
Time" shall be deemed to have occurred at the opening of business on January 13,
2000. The Investor Trust Account means that certain trust account identified in
Schedule B hereto established by Shartsis, Friese & Ginsburg LLP for the purpose
of collecting funds from the Investors for the purchase of Shares. The funds
from the Investor Trust Account shall be released to the Company at the Closing.
If the Closing has not occurred by January 20, 2000, each Investor depositing
funds into the Investor Trust Account shall be entitled to have its funds
returned by providing a written request to Shartsis, Friese & Ginsburg LLP
requesting the return of such funds.
1.3 Formula Price. The "Formula Price" means the product, rounded to
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the nearest whole cent, of 85% times the mean average of the 60 closing sale
prices of the Common Stock, as reported by the Nasdaq National Market, for the
60 consecutive trading days ending on and including January 5, 2000, i.e., the
Formula Price is $5.71.
1.4 Restrictions on Future Sales. Until such time as the Shares are
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registered for resale as required pursuant to Section 4 hereof or may otherwise
be sold in a single transaction pursuant to Rule 144, the Company shall not
issue, offer or sell any Common Stock (or any security convertible or
exchangeable into Common Stock) on terms more favorable than
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the terms that the Shares and the Warrants (as defined below) are being sold to
the Investors pursuant to this Agreement. For this purpose, the price will not
be deemed "more favorable" if it is equal to or more than the product, rounded
to the nearest whole cent, of 85% times the mean average of the 60 closing sale
prices of the Common Stock, as reported by the Nasdaq National Market, for the
60 consecutive trading days ending on and including the date of the sale of such
other shares. In addition, until such time as the Shares are registered for
resale as required pursuant to Section 4 hereof or may otherwise be sold in a
single transaction pursuant to Rule 144, the Company shall not issue, offer or
sell any Common Stock (or any security convertible or exchangeable into Common
Stock) at an absolute price lower than this Agreement's Formula Price (even if
such transaction is otherwise in compliance with this Section 1.4) unless the
Company has first given each Investor written notice of intent to offer an
amount specified in the notice of such securities at a price and on terms
specified in the notice; each Investor then shall have (pro rata) a right of
first offer to purchase some or all of the offered securities at the stated
price and terms. Each Investor shall have 20 days after receipt of the written
notice to accept such right of first offer in whole or in part, and at the end
of such 20 days the right shall expire with respect to such notice to the extent
it has not been exercised. The Company shall then have the right, without
passing again through the right of first offer process, to sell up to all of the
untaken securities at the notice price and terms (or other price and terms more
favorable to the Company) within 60 days after the expiration of the right with
respect to such notice.
2. Representations and Warranties of the Company. For purposes of this
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Section 2, unless the context otherwise requires, the term "Company" shall
include the Company and its subsidiaries as listed in its most recent Annual
Report on Form 10-K/A for the year ended December 31, 1998 (the "Annual Report")
filed with the Securities and Exchange Commission
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(the "SEC"). Except as set forth in the Disclosure Schedule delivered to the
Investors supplementally (the "Disclosure Schedule"), the Company hereby
represents and warrants to the Investors as follows:
2.1 Corporate Organization and Authority of the Company. The Company
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and each of its subsidiaries:
(a) is a corporation duly organized, validly existing,
authorized to exercise all its corporate powers, rights and privileges and in
good standing in the state or jurisdiction of its incorporation;
(b) has the corporate power and authority to own and operate its
properties and to carry on its business as presently conducted and as proposed
to be conducted; and
(c) is qualified to do business as a foreign corporation in each
jurisdiction in which the ownership of its property or the nature of its
business requires such qualification, except where failure to so qualify would
not have a materially adverse effect on the business, properties or financial
condition of the Company and its subsidiaries, taken as a whole. The Company has
furnished to the Investors true and correct copies of its Certificate of
Incorporation and Bylaws, each as amended to date.
2.2 Capitalization. The authorized capital stock of the Company
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consists of:
(a) Preferred Stock. 2,000,000 shares of Preferred Stock,
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$.0001 par value, 750,000 shares of which have been designated Series A Junior
Participating Preferred Stock, of which none were issued and outstanding as of
January 6, 2000.
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(b) Common Stock. 95,000,000 shares of Common Stock, $.0001 par
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value, of which 68,229,360 shares were issued and outstanding as of January 6,
2000 (including shares issued on January 5, 2000 in a stock-for-debt exchange).
(c) All outstanding shares of the Company's Common Stock have
been duly authorized and validly issued (including, without limitation, issued
in compliance with applicable federal and state securities laws), and are fully
paid and nonassessable.
(d) Since December 31, 1999, the Company has not issued any
shares of Common Stock or Preferred Stock except in connection with a January 5,
2000 stock-for-debt exchange or the exercise of outstanding options or warrants.
Except as described in the Disclosure Schedule, there are no options, warrants,
conversion privileges or other contractual rights presently outstanding to
purchase or otherwise acquire from the Company any shares of the Company's
capital stock or other securities (whether or not authorized).
2.3 Subsidiaries. The Company does not presently own, have any
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investment in, or control, directly or indirectly, any subsidiaries,
associations or other business entities, except as disclosed in the Annual
Report. The Company is not a participant in any joint venture or partnership,
except as disclosed in the Annual Report.
2.4 Authorization. All corporate action on the part of the Company,
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its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance by the Company of all its obligations under
this Agreement and for the authorization, issuance, sale and delivery of the
Shares has been taken, and this Agreement, once executed by the Company and each
Investor, will constitute a legally binding and valid obligation of the Company
enforceable in accordance with its terms, such enforceability being subject only
to laws of general application relating to bankruptcy, insolvency and the relief
of
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debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies. Except for rights, if any, which have been duly
waived, the issuance and sale of the Shares will not give rise to any preemptive
rights or rights of first refusal on behalf of any person in existence on the
date hereof.
2.5 Validity of Shares. The Shares and the Warrants (defined below),
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when issued, sold and delivered in accordance with the terms and for the
consideration expressed in this Agreement, shall be duly and validly issued
(including, without limitation, compliance with applicable federal and state
securities laws), fully paid and nonassessable, and free and clear of all
pledges, liens, encumbrances and restrictions other than any liens or
encumbrances created by or imposed on the holder thereof through no action of
the Company. The common stock issuable on exercise of the Warrants (the "Warrant
Shares"), when issued in accordance with the Warrants, shall be duly and validly
issued (including, without limitation, compliance with applicable federal and
state securities laws), fully paid and non-assessable and free and clear of all
pledges, liens, encumbrances and restrictions other than any liens or
encumbrances created by or imposed on the holder thereof through no action of
the Company. The Company will reserve shares of Common Stock under the Warrants
as such shares accrue in accordance with Sections 4.1(d) and 4.1(h) hereof, and
on issuance of the Warrants, all Warrant Shares will be duly and validly
reserved for issuance. Assuming the truth and accuracy of the representations
made by the Investors, the offer, sale and issuance of the Common Stock, the
Warrants and the Warrant Shares are exempt from the registration requirements of
the Securities Act and applicable state securities Laws, and neither the Company
nor any authorized agent acting on its behalf has taken or will take any action
hereafter that would cause the loss of such exemption.
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2.6 No Conflict. The execution and delivery of this Agreement do not,
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and the consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
in time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit under, any
provision of the Certificate of Incorporation or Bylaws of the Company. The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in any
violation of, or default (with or without notice or lapse in time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to a loss of a material benefit under, any provision of any
mortgage, indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company, its properties or assets, the effect of
which could have a material adverse effect on the Company or materially impair
or restrict its power to perform its obligations as contemplated hereby.
2.7 Accuracy of Reports. The Annual Report, the Company's quarterly
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report on Form 10-Q for the quarter ended September 30, 1999 filed with the SEC
(the "Quarterly Report"), and all reports required to be filed by the Company
thereafter to the date of this Agreement under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), copies of which have been furnished to
the Investors (together, the "SEC Reports"), have been duly filed, were (as
amended to date) complete and correct in all material respects as of the dates
at which the information was furnished, and (as amended to date) contained (as
of such dates) no untrue statement of a material fact nor omitted to state a
material fact necessary in order to make
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the statements made therein, in light of the circumstances in which they were
made, not misleading.
2.8 Changes. Except as otherwise disclosed herein, in the Disclosure
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Schedule or in the SEC Reports, between September 30, 1999 and the date of this
Agreement there has not been:
(a) any change in the assets, liabilities, financial condition,
prospects or operations of the Company from that reflected in the Quarterly
Report, except changes in the ordinary course of business which have not been,
either in any individual case or in the aggregate, materially adverse;
(b) any material change in the contingent obligations of the
Company, whether by way of guaranty, endorsement, indemnity, warranty or
otherwise;
(c) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties or business of the
Company;
(d) any declaration or payment of any dividend or other
distribution of the assets of the Company;
(e) any labor organization activity; or
(f) to the best of the Company's knowledge, any other event or
condition of any character which has materially and adversely affected the
Company's assets, liabilities, financial condition, prospects or operations.
2.9 Government Consent, etc. No consent, approval or authorization of
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or designation, declaration or filing with any governmental authority or any
other person or entity (except Union Bank of California and Bank of America) on
the part of the Company is required in connection with the valid execution and
delivery of this Agreement, or the offer, sale or
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issuance of the Shares, or the consummation of any other transaction
contemplated hereby, except the filing of a Registration Statement and related
activities pursuant to Section 4 hereof.
2.10 Full Disclosure. The representations and warranties of the
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Company contained in this Agreement, when read together with the Disclosure
Schedule and the SEC Reports, do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements contained herein, in light of the circumstances under which they were
made, not misleading.
2.11 Conflicts Prohibited. The Company represents, warrants and
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covenants that to the best of its knowledge no officer or employee of any
Investor has a direct or indirect economic interest in the Company or its
property or contracts other than as disclosed in the SEC Reports, nor will any
officer or employee of any Investor receive, directly or indirectly, anything of
substantial economic value for his or her private benefit from the Company or
anyone acting on its behalf in connection with the investment made pursuant to
this Agreement.
2.12 Intellectual Property. The Company has not violated and is not
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currently in violation of any copyright, trademark or other intellectual
property rights of any third persons, except to the extent that such violation
does not materially and adversely affect the Company or its operations.
2.13 Litigation/Bankruptcy/Malfeasance. The Company is not the subject
---------------------------------
of and has not received notice of any legal proceedings of the following types
to which the Company is a party (or, if applicable, any executive officer or
director of the Company) or any of its property is the subject: any proceeding
that involves a claim against the Company for damages in excess of $500,000; any
material bankruptcy, receivership or similar proceedings with respect to the
Company; or any criminal proceedings or civil proceedings for fraud or
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malfeasance of which a director or executive officer of the Company is the
subject (excluding minor offenses).
2.14 Year 2000. To the Company's knowledge, except for matters which
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would not in the aggregate result in a material adverse effect on the Company,
each hardware and software product and other computer and information technology
used by the Company in its business (collectively, the "Software") will
accurately receive, provide and process date and time data (including, but not
limited to, calculating, comparing and sequencing) from, into and between the
twentieth and twenty-first centuries, including, without limitation, leap year
calculations, without a decrease in the functionality of the Software so that
the Software will not malfunction, cease to function or provide invalid or
incorrect results as a result of date or time data, to the extent that other
information technology, used in combination with the Software, properly
exchanges date and/or time data with it. To the Company's knowledge, except for
matters which would not in the aggregate result in a material adverse effect on
the Company, the Software is designed to be used prior to, during and after the
calendar year 2000 A.D. and will operate during each such time period without
error relating to date or time data, specifically including any error relating
to, or the product of, date data which represents or references different
centuries or more than one century. Without limiting the generality of the
foregoing, to the Company's knowledge, except for matters which would not in the
aggregate result in a material adverse effect on the Company, the Software (a)
will not abnormally end or provide invalid or incorrect results as a result of
date or time data, specifically including date data that represents or
references different centuries or more than one century, (b) has been designed
to ensure year 2000 compatibility, including, but not limited to, date data
century recognition, calculations which accommodate same century and multi-
century formulas and date values, and
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date data interface values that reflect the century, and (c) includes "Year 2000
Capabilities," meaning that the Software (i) will manage and manipulate data
involving dates or time, including single century formulas and multi-century
formulas, and will not cause an abnormally ending scenario within the
application or generate incorrect values or invalid results involving such
dates, (ii) provides that all date-related user interface functionalities and
data fields include the indication of century, and (iii) provides that all date-
related data interface functionalities include the indication of century.
2.15 Investment Company. The Company represents and warrants that it
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is not an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended
(the "1940 Act"). In addition, the Company agrees that it shall not become an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the 1940 Act. In the event that the Company breaches the
foregoing, the Company shall forthwith notify the Investors and shall take
immediate corrective action to remedy such breach.
3. Representations and Warranties of the Investors. Each Investor
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severally, and not jointly, represents and warrants to the Company as follows:
3.1 Organization. It is validly existing under the laws of the state
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(or country) in which it is chartered, with all requisite power and authority to
conduct its business as now being conducted.
3.2 Authority. It has all corporate or partnership, as the case may
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be, right, power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by the Investor and the consummation by it of the transactions
contemplated hereby have been duly authorized by all
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necessary corporate or partnership, as the case may be, action on behalf of the
Investor. This Agreement has been duly executed and delivered by and constitutes
a legal, valid and binding obligation of the Investor, enforceable in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any violation of any
obligation under any provision of the organizational or other charter documents
of the Investor or any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Investor.
3.3 Information. The Investor represents that it has received all the
-----------
information it has requested from the Company and considers necessary or
appropriate for deciding whether to purchase the Shares. The delivery of any
information by the Company to the Investor shall not abrogate the
representations and warranties of the Company contained herein.
3.4 No Current Resale. The Investor is acquiring the Shares for its
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own account and not with a view to sale or distribution. Any such sale or
distribution shall be made only in compliance with the provisions of the
Securities Act of 1933, as amended (the "Securities Act") and all applicable
blue sky laws. The Investor acknowledges that the Shares are not now registered
under the Securities Act or any blue sky law, and might never be so registered.
The Investor further acknowledges that the stock certificate representing the
Shares will bear a customary securities-law restrictive legend.
3.5 Status of Investor (Regulation D). The Investor is an "accredited
---------------------------------
investor" as such term is defined in Rule 501 as promulgated by the SEC under
the Securities Act.
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3.6 No Net Change. There has been no change in excess of $1,000 in
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the Investor's net position in Common Stock of the Company since December 31,
1999.
4. Covenants.
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4.1 Registration of Shares.
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(a) The Company shall, before the later of (i) 20 days after the
SEC declares effective the Company's Form S-3 registration statement for the
resale of the Common Stock issued by the Company in exchange for its Series B
Convertible Participating Preferred Stock, and (ii) 45 days following the
Closing, prepare and file with the SEC a registration statement on Form S-1
under the Securities Act covering the resale of the Shares by any Investor
(subject to Section 4.1(g), the "Registration Statement"), and corresponding
applications for registration under the blue sky laws of any states for which
any Investor reasonably requests in writing to the Company that the Company
obtain such blue-sky registration (it being understood that in the vast majority
of states no such registration is legally required, due to the Company's Nasdaq
National Market listing or other reasons). The Company shall use its best
efforts to obtain effectiveness of the Registration Statement and such blue sky
registrations as soon thereafter as practicable, and in any event within 90 days
after the Closing. If the Registration Statement has not been declared effective
within 90 days after the Closing or at any such time as a Warrant (as defined in
Section 4.1(h) below) is issued to an Investor, the Company shall also be
required to register for resale any and all Warrant Shares (as defined in
Section 4.1(h) below) to the same extent they were Shares. The Company shall use
its best efforts to keep the Registration Statement and such blue sky
registrations effective after that. Notwithstanding the foregoing, the Company
will only be required to maintain the effectiveness of the Registration
Statement and such blue sky registrations until the earlier of (i) such time as
all of the Shares have been disposed of by the Investors, or (ii) such date on
which the Investors may legally
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dispose of all of the Shares in one transaction in the open market pursuant to
Rule 144(k) under the Securities Act. The Company shall also cause the Shares
and any Warrant Shares to be listed on the Nasdaq National Market and on any
stock exchange on which the Common Stock may from time to time be listed. The
Company shall pay all fees and expenses incurred by the Company in connection
with preparing, filing, prosecuting and updating the Registration Statement,
such blue sky applications and registrations, and such listing, including all
registration and filing fees, listing fees, printing expenses, and fees and
disbursements of the Company's counsel and accountants.
(b) Each Investor shall cooperate fully with the Company in the
preparation of such Registration Statement and blue sky applications and shall
provide to the Company all information and materials (including updated
information and materials) regarding itself and its proposed method of
disposition of the Shares and any Warrant Shares and take all actions reasonably
requested by the Company to permit the Company to comply with applicable
requirements of the SEC, to comply with applicable requirements of the relevant
blue sky laws, and to obtain the desired acceleration of the effective date of
such Registration Statement.
(c) Subject to Section 4.1(d) hereof, the Company shall promptly
prepare and file with the SEC and any relevant blue sky authorities such
amendments and supplements to the Registration Statement and the prospectus used
in connection therewith as may be necessary to keep such Registration Statement
effective and to comply with (and enable the Investors to comply with) the
provisions of the Securities Act and Rule 415 thereunder with respect to the
disposition of all the Shares and any Warrant Shares.
(d) During the effectiveness of the Registration Statement, the
Company shall promptly notify the Investors of the happening of any event or
other
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circumstance as the result of which, in the Company's judgment, (i) the
prospectus included in the Registration Statement, as then in effect, would
include an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, or (ii) the offer or
resale of the Shares and any Warrant Shares would otherwise have a material and
adverse effect on any proposed or pending acquisition, merger, business
combination or other material transaction involving the Company; and, upon
receipt of such notice and until the earlier of (i) the date the Company makes
available to the Investors a supplemented or amended prospectus meeting the
requirements of the Securities Act and relevant blue sky laws, or (ii) the date
the Company notifies the Investors that the Investors may resume offers and
sales using the prior prospectus, the Investors shall not offer or sell any
Shares and any Warrant Shares pursuant to the Registration Statement (and shall
return all copies of such prior prospectus to the Company if requested to do so
by it). Notwithstanding Section 4.1(c), the Company may continue such "blackout"
period or periods for such period of time as the Company considers reasonably
necessary and in its best interest due to circumstances then existing, or simply
due to the fact that amendments/supplements of a Registration Statement/
prospectus cannot be prepared instantly; but in no event may the Company impose
---
"blackouts" on the Investors for any period of ten or more consecutive business
days or totaling more than 20 days in any 12 month period (plus any "Permitted
Blackouts" as defined in the Registration Rights Agreement dated as of December
21, 1998 between the Company, Castle Creek Technology Partners LLC and others).
(e) The Company shall not be required to apply for or obtain
blue sky registration in any state if in connection therewith or as a condition
thereto it must (i) qualify to do business in such state where it would not
otherwise be required to qualify, (ii) subject itself to
15
<PAGE>
general taxation in such state, (iii) file a general consent to service of
process in such state, or (iv) make any change in its Certificate of
Incorporation or Bylaws, which the Company's Board of Directors determines to be
contrary to the best interests of the Company and its stockholders.
(f) Indemnification.
---------------
(i) The Company will indemnify each Investor, and each of
the officers and directors of, and each person controlling, each Investor,
against all claims, losses, expenses, damages and liabilities (or actions in
respect thereto) arising out of or based on (A) any untrue statements (or
alleged untrue statement) of a material fact contained in any prospectus
contained in any registration statement covering the Shares for resale, or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or (B) any misrepresentation or breach of any representation or warranty given
or made by the Company in this Agreement, and will reimburse each Investor, each
of its officers and directors and each person controlling each Investor, for any
reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage or liability is caused by any untrue
statement or omission based upon written information furnished to the Company by
such Investor specifically for use therein.
(ii) Each Investor will indemnify the Company, each of its
directors and officers, and each person who controls the Company within the
meaning of the Securities Act, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on (A) any
untrue statement (or alleged untrue statement) of a material fact contained in
any such prospectus, or any omission (or alleged omission) to state
16
<PAGE>
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (B) any sale of Shares which violates (or
allegedly violates) the Securities Act because of violation of the prospectus
delivery requirement or because more or less than the information in such
prospectus is given (or alleged to be given) in connection with the sale, or (C)
any misrepresentation or breach of any representation or warranty given or made
by such Investor in this Agreement, and will reimburse the Company, and such
directors, officers, or controlling persons, for any reasonable legal or any
other expenses incurred in connection with investigating, defending or settling
any such claim, loss, damage, liability or action, but in the case of subsection
(f)(ii)(A) to the extent, and only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
prospectus in reliance upon and in conformity with written information furnished
to the Company by such Investor specifically for use therein provided, however,
that the indemnity agreement contained in this section 4.1(f)(ii) shall not
apply to amounts paid in settlement of any such claims, losses, expenses,
damages and liabilities if such settlement is effected without the consent of
the Investor, which consent shall not be unreasonably withheld; provided,
further, that in no event shall any indemnity under this section 4.1(f)(ii)
exceed the net proceeds from the offering received by such Investor.
(iii) Each party entitled to indemnification under this
Section 4.1(f) (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
indemnified party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
17
<PAGE>
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at the Indemnified Party's expense, and provided further that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations hereunder, unless such failure
resulted in actual detriment to the Indemnifying Party. The Indemnified Party
shall provide all cooperation reasonably requested for the defense of the claim
or litigation. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. An Indemnified Party shall not decline any settlement complying with
the foregoing if it requires nothing of the Indemnified Party other than the
payment of money (which is in fact paid by the Indemnifying Party) and does not
include an admission of liability.
(iv) In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
any person or entity entitled to indemnification under Section 4.1(f) makes a
claim for indemnification pursuant to this Section 4.1(f) but it is judicially
determined (by entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 4.1(f) provides for indemnification
in such case; then, and in such case, the party that would otherwise be required
to indemnify under Section 4.1(f) will contribute to the aggregate losses,
claims, damages or liabilities to which the other parties may be subject (after
contribution from others) in such proportion as is appropriate to reflect the
relative fault of the
18
<PAGE>
parties in connection with the losses suffered, as well as any other relevant
equitable considerations.
(g) The parties agree that if the Company becomes eligible to
register securities for resale on Form S-3 it may choose to register the Shares
for resale on Form S-3 and, after the SEC declares such Form S-3 registration
statement effective, so notify the Investors, provide all relevant deliverables
(such as a supply of new prospectuses), and then (if the original Form S-1
Registration Statement had already been declared effective) deregister the
Shares from the original Form S-1 Registration Statement. Thereafter such Form
S-3 Registration Statement shall, for all purposes of this Agreement, be deemed
to be the "Registration Statement."
(h) If the Shares have not been registered for resale by
date that is three months following the Closing (the "Penalty Date"), the
Company shall be obligated to issue each Investor a warrant (each a "Warrant"
and collectively the "Warrants") on substantially the form attached hereto as
Exhibit C. The number of shares for which each Warrant is exercisable for is to
be determined as follows: for each month (pro rata for partial months) following
the Penalty Date that the Shares have not been registered for resale the Warrant
shall be issued for 3% of the number of Shares such Investor has purchased
pursuant to Section 1.1 hereof. No Warrants shall be issuable if the
Registration Statement is declared effective within the first three months after
the date of Closing. For the purposes of this subsection (h) a "month" shall be
deemed to begin on the same numbered day in each calendar month as the numbered
day of the month on which the Closing occurs. As the obligation to issue the
Warrants accrues, the Company shall reserve for issuance the corresponding
number of Warrant Shares. In no event shall Warrant Shares accrue to an Investor
to the extent that delay was caused by such Investor's violation of Section
4.1(b).
19
<PAGE>
Although the obligation to issue Warrants will begin 3 months after the
Penalty Date, the Company shall not actually issue such Warrants until the
earlier of (i) the day after the Company first registers the Shares for resale
or (ii) one year and one day after the Penalty Date (the "Warrant Issuance
Date"). In the event clause (ii) in the preceding sentence applies then
additional Warrants shall be issued, pursuant to this subsection, every three
months after the first Warrant Issuance Date, as appropriate (each a "Warrant
Issuance Date" and collectively the "Warrant Issuance Dates"). The maximum
duration of the period of exerciseability for the Warrant shall be until the
third anniversary of the respective Warrant Issuance Date. The initial Exercise
Price per share of the Warrant shall be 80% of the price which was the lowest
closing sale price of the Common Stock, as reported by the Nasdaq National
Market, during the period between the Closing and the respective Warrant
Issuance Date.
(i) From the date hereof through a period of 20 days following
the date that the Registration Statement is first declared effective, the
Company shall not register any securities other than securities issued in
connection with (1) any stock option plan, stock purchase plan, stock bonus plan
or other plan for the benefit of employees, officers or directors of the Company
or (2) the exercise of any rights, warrants or options heretofore granted or
issued by the Company for the acquisition of any securities, provided however
the Company may register securities (other than for resale) provided that the
Company includes in such registration statement the registration for resale of
the Shares and any Warrant Shares; provided further, that the registration
rights granted to Investors pursuant to this Agreement shall be enforceable
against the Company in connection with such registration statement as if it were
a registration
20
<PAGE>
statement filed pursuant to this Agreement. Neither such prohibition nor such
piggyback provision shall apply to the Form S-3 registration statement described
in Section 4.1(a)(i).
(j) The Company shall cooperate with the Investors to facilitate
the timely preparation and delivery of certificates representing the Shares and
Warrant Shares to be offered for resale pursuant to the Registration Statement
and enable such certificates to be in such denomination or amounts, as the case
may be, as the Investors may reasonably request and registered in such names as
the Investors may request after a Registration Statement which includes the
Shares or Warrant Shares is ordered effective by the SEC, that the Company
deliver, and on such request, the Company shall cause its legal counsel to
deliver to the transfer agent for the Shares and Warrant Shares an opinion of
such counsel in appropriate form to ensure the transfer of such shares without
legend upon delivery by the Investors to the transfer agent of a certificate
that the resale was made via proper delivery of the Prospectus under the
Registration Statement.
4.2 Deliverables Upon Effectiveness. When and if the SEC declares
-------------------------------
the Registration Statement effective, the Company shall promptly deliver to
each Investor:
(a) A certificate signed by the Chief Executive Officer or
President of the Company that the Registration Statement is effective and, to
his knowledge, no stop order with respect to the Registration Statement has been
issued and no proceedings therefor have been instituted.
(b) A legal opinion of Brobeck, Phleger & Harrison LLP,
counsel to the Company, in substantially the form of Exhibit B.
(c) Such number of copies of the Registration Statement and
(from time to time) of each amendment and supplement thereto, such number of
copies of the
21
<PAGE>
prospectus (including (from time to time) any supplemental or amended
prospectus) included in such Registration Statement, and such other related
documents as the Investors may reasonably request in writing in order to
facilitate the disposition of the Shares by the Investors.
4.3 Current Public Information. With a view to making available to
--------------------------
Investors the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the SEC that may at any time permit Investors to
sell securities of the Company to the public without registration or pursuant to
a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times from and after the date
of this Agreement so long as the Company remains subject to the periodic
reporting requirements under Sections 13 or 15(d) of the Exchange Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to each Investor, so long as such Investor owns any
Shares, Warrants or Warrant Shares, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements of
SEC Rule 144, the Securities Act and the Exchange Act, or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably requested in
availing such Investor of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
22
<PAGE>
4.4 Obligations of the Company. In connection with the registration
--------------------------
obligations of the Company pursuant to this Agreement, the Company shall, as
expeditiously as reasonably possible:
(a) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Common Stock and
Warrant Shares owned by them.
(b) Provide a transfer agent and registrar for all Common Stock
and Warrant Shares registered pursuant hereunder and a CUSIP number for all such
Common Stock and Warrant Shares, in each case not later than the effective date
of such registration.
4.5 Sales By Investors. Until the Shares are registered for resale
------------------
pursuant to Section 4 hereof or otherwise may be sold in a single transaction
pursuant to Rule 144, each Investor shall not, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock that such Investor owns immediately prior to the Closing or any
securities convertible into or exchangeable for Common Stock that such Investor
owns immediately prior to the Closing, or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of such Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise.
23
<PAGE>
5. Conditions of the Investors' Obligations at Closing. The obligations
---------------------------------------------------
of each Investor under Section 1 of this Agreement are subject to the
fulfillment at or before the Closing of each of the following conditions, any of
which may be waived in writing by each Investor:
5.1 Bringdown. The Company's representations and warranties in
---------
Section in Section 2 shall be true in all material respects as of the date of
this Agreement and the Company shall not have intentionally done or omitted to
do, between the date of this Agreement and the Closing, anything which has
caused such representations and warranties not to be true in all material
respects as if made on and as of the date of the Closing. The Company shall have
performed or fulfilled in all material respects all agreements, obligations and
conditions contained herein required to be performed or fulfilled by the Company
before such Closing.
5.2 Blue Sky Compliance. The Company shall be exempt from or have
-------------------
registration/qualification requirements of and be effective under all blue sky
laws applicable to the offer and sale of the Shares to the Investors.
5.3 Compliance Certificate. The Company shall have delivered to each
----------------------
Investor a certificate dated as of the date of the Closing signed by the Chief
Executive Officer or President of the Company certifying that, to his knowledge,
the conditions set forth in Sections 5.1, 5.2, 5.5, 5.6, 5.7 and 5.8 have been
satisfied.
5.4 Opinion of Counsel. There shall have been delivered to each
------------------
Investor an opinion of Brobeck, Phleger & Harrison LLP, counsel to the Company,
in substantially the form of Exhibit A, dated the date of the Closing.
5.5 No Order Pending. There shall not then be in effect any order
----------------
enjoining or restraining the transactions contemplated by this Agreement.
24
<PAGE>
5.6 No Material Litigation. During the period from the date of this
----------------------
Agreement to the Closing, no material litigation shall have been initiated
challenging the Company's ownership or its right to use or distribute the core
technology of the Company's products, and the Company shall have not received
any written threat of such litigation or any written claim so challenging the
Company's rights.
5.7 No Fraud or Malfeasance. During the period from the date of this
-----------------------
Agreement to the Closing, (a) none of the Company's officers or directors shall
have been removed for fraud or malfeasance in performance of his or her duties
with respect to the affairs of the Company and (b) no new legal proceedings
against any officers or directors of the Company for fraud or malfeasance in the
performance of his or her duties with respect to the affairs of the Company
shall have been instituted by the Company or its stockholders.
5.8 Trigger Time. The Trigger Time shall have occurred on or before
------------
the Closing.
6. Conditions of the Company's Obligations at Closing. The obligations of
--------------------------------------------------
the Company under Section 1 of this Agreement are subject to the fulfillment at
or before the Closing of each of the following conditions, any of which may be
waived in writing by the Company:
6.1 Bringdown. The Investors' representations and warranties in
---------
Section 3 shall be true in all material respects, as if made on and as of the
date of the Closing.
6.2 Blue Sky Compliance. The Company shall be exempt from or have
-------------------
complied with the registration/qualification requirements of and be effective
under all blue sky laws applicable to the offer and sale of the Shares to the
Investors.
25
<PAGE>
6.3 No Order Pending. There shall not then be in effect any order
----------------
enjoining or restraining the transactions contemplated by this Agreement.
7. Miscellaneous.
-------------
7.1 Entire Agreement. This Agreement constitutes the entire contract
----------------
between the Company and the Investors relative to the subject matter hereof. Any
previous or contemporaneous agreements, understandings, promises and
representations (whether written or oral) with regard to such subject between
the Company and the Investors are superseded by this Agreement.
7.2 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed within the State of California by
California residents.
7.3 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7.4 Headings. The headings of the Sections and subsections of this
--------
Agreement are for convenience and shall not determine the interpretation of this
Agreement.
7.5 Notices. Any notice required or permitted hereunder shall be
-------
given in writing and shall be conclusively deemed effectively given upon
personal delivery, or, if made by registered or certified United States mail,
postage prepaid, four business days after mailing, or if made by overnight
carrier, one business day after sending, in all instances addressed (i) if to
the Company, as set forth below the Company's name on the signature page of this
Agreement, and (ii) if to the Investors, as set forth on Schedule A, or at such
other address as the Company or Investor may designate by ten days' advance
written notice to each Investor or the Company, respectively.
26
<PAGE>
7.6 Survival of Warranties. The representations and warranties of the
----------------------
parties contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for three years;
provided, however, that such representations and warranties need only be
accurate as of the date of such execution and delivery.
7.7 Amendment of Agreement. Any provision of this Agreement may be
----------------------
modified or amended, at any time, by a written instrument signed by the Company
and by all of the Investors, and not in any other way.
7.8 Fees and Expenses. The Company and each Investor will each bear
-----------------
their own fees and expenses in connection with the transactions contemplated by
this Agreement; provided, that the Company shall pay at the Closing up to
$25,000 of legal fees and expenses of Shartsis, Friese & Ginsburg, LLP.
7.9 Finders' Fees. The Company will hold the Investors harmless from
-------------
from all finders' or brokers' fees in connection with the sale of the Shares to
the Investors.
7.10 Use of Proceeds.
---------------
(a) The Company covenants and agrees that it shall not use any
portion of the purchase price hereunder to fund a settlement of any litigation
pending against the Company as of the Closing, including but not limited to the
currently-pending class action lawsuit against the Company identified in the
Disclosure Schedule.
(b) If the gross proceeds to the Company under this Agreement
are less than $30,000,000, the Company covenants to the Investors and agrees
that it shall not use any portion of the purchase price hereunder to repay its
bank debt as described in the SEC Reports. If the gross proceeds to the Company
under the Agreement are $30,000,000 or more, the Company covenants to the
Investors and agrees that it shall use no more of the gross proceeds to the
Company under the Agreement than the Excess Portion to repay its bank debt as
27
<PAGE>
described in the SEC Reports. The "Excess Portion" is the excess of (i) the
gross proceeds to the Company under the Agreement, over (ii) $29,999,998.
28
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Common Stock
PIPES Purchase Agreement as of the day and year first above written.
P-COM, INC.
By: /s/ George P. Roberts
_____________________________________________________________
Title: Chairman / CEO
__________________________________________________________
Address: 3175 S. Winchester Boulevard
Campbell, CA 95008
Attention: Chief Financial Officer
GRUBER MCBAINE INTERNATIONAL, a
Cayman Islands Corporation
By: /s/ Thomas O. Lloyd-Butler
_____________________________________________________________
Title: GMCM LLC - Member; Attorney in Fact
__________________________________________________________
LAGUNITAS PARTNERS, L.P.
By: /s/ Thomas O. Lloyd-Butler
_____________________________________________________________
Title: GMCM LLC - Member; Lagunitas Partners LP - Gen Partner LP
__________________________________________________________
TRUSTEES OF HAMILTON COLLEGE
By: /s/ Thomas O. Lloyd-Butler
_____________________________________________________________
Title: GMCM LLC - Member; Attorney in Fact
__________________________________________________________
LOCKHEED MARTIN CORP. MASTER
RETIREMENT TRUST
By: /s/ Thomas O. Lloyd-Butler
_____________________________________________________________
Title: GMCM LLC - Member; Attorney in Fact
__________________________________________________________
[SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT]
<PAGE>
LION INVESTMENTS LTD.
By: /s/ Robert Rayne
____________________________________
Title: Director
_________________________________
WESTPOOL INVESTMENT TRUST
By: /s/ Robert Rayne
____________________________________
Title: Director
_________________________________
WEBER CAPITAL PARTNERS, L.P.
By: Weber Capital Management, LLC,
its General Partner
____________________________________
By: /s/ Eugene M. Weber
____________________________________
Title: Managing Member
_________________________________
[SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT]
<PAGE>
Quissett Partners, L.P. by Wellington Management
Company, LLP, its Investment Advisor
By: /s/ Cynthia M. Clarke
_______________________________________________
Cynthia M. Clarke, Vice President
Quissett Investors (Bermuda) L.P., by Wellington
Management Company, LLP, its Investment Advisor
By: /s/ Cynthia M. Clarke
_______________________________________________
Cynthia M. Clarke, Vice President
Vanguard Explorer Fund, by Wellington Management
Company, LLP, its Investment Advisor
By: /s/ Cynthia M. Clarke
_______________________________________________
Cynthia M. Clarke, Vice President
Hazelbrook Partners, L.P., by Wellington Management
Company, LLP, its Investment Advisor
By: /s/ Cynthia M. Clarke
_______________________________________________
Cynthia M. Clarke, Vice President
[SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT]
<PAGE>
WHITMAN PARTNERS, L.P.
By: /s/ Douglas F. Whitman
____________________________________
Title: General Partner
_________________________________
SELIGMAN COMMUNICATIONS AND
INFORMATION FUND, INC.
By: J. & W. Seligman & Co. Incorporated,
its Investment Advisor
_____________________________________
By: /s/ Gregory Cote
_____________________________________
Title: Managing Director
_________________________________
[SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT]
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Investor Address Amount to be Number of
Invested Shares
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gruber McBaine International, a c/o Gruber McBaine $1,250,002 218,914
Cayman Islands Corporation Investment Advisors
50 Osgood Place,
Penthouse
San Francisco, CA 94133
Attn: Christine Arroyo
- ---------------------------------------------------------------------------------------------------
Lagunitas Partners, L.P. c/o Gruber McBaine $3,000,000 525,394
Investment Advisors
50 Osgood Place,
Penthouse
San Francisco, CA 94133
Attn: Christine Arroyo
- ---------------------------------------------------------------------------------------------------
Trustees of Hamilton College c/o Gruber McBaine $ 250,000 43,782
Investment Advisors
[stock certificate should read: 50 Osgood Place,
Hare & Co. / 651653] Penthouse
San Francisco, CA 94133
Attn: Christine Arroyo
- ---------------------------------------------------------------------------------------------------
Lockheed Martin Corp. Master c/o Gruber McBaine $ 500,000 87,565
Retirement Trust Investment Advisors
50 Osgood Place,
[stock certificate should read: Penthouse
Pitt & Co. / 169629-99] San Francisco, CA 94133
Attn: Christine Arroyo
- ---------------------------------------------------------------------------------------------------
Vanguard Explorer Fund c/o Wellington $ 500,000 87,565
Management Company, LLP
75 State Street
Boston, MA 02109
- ---------------------------------------------------------------------------------------------------
Quissett Partners, L.P. c/o Wellington $2,610,000 457,092
Management Company, LLP
75 State Street
Boston, MA 02109
Attn: Phillip Scibelli
- ---------------------------------------------------------------------------------------------------
Quissett Investors (Bermuda) L.P. c/o Wellington $1,740,000 304,728
Management
- ---------------------------------------------------------------------------------------------------
</TABLE>
Schedule A-1
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Company, LLP
75 State Street
Boston, MA 02109
Attn: Phillip Scibelli
- ---------------------------------------------------------------------------------------------------
Hazelbrook Partners, L.P. c/o Wellington $ 150,000 26,269
Management Company, LLP
75 State Street
Boston, MA 02109
Attn: Sean Higgins
- ---------------------------------------------------------------------------------------------------
Westpool Investment Trust c/o Weber Capital $ 750,000 131,348
Partners, L.P.
50 California Street
Suite 3200
San Francisco, CA 94111
Attn: Eugene M. Weber
- ---------------------------------------------------------------------------------------------------
Lion Investments Ltd. c/o Weber Capital $ 750,000 131,348
Partners, L.P.
50 California Street
Suite 3200
San Francisco, CA 94111
Attn: Eugene M. Weber
- ---------------------------------------------------------------------------------------------------
Weber Capital Partners, L.P. 50 California Street $ 1,500,000 262,697
Suite 3200
San Francisco, CA 94111
Attn: Eugene M. Weber
- ---------------------------------------------------------------------------------------------------
Whitman Partners, L.P. 525 University Avenue $14,999,999 2,626,970
Suite 701 *
Palo Alto, CA 94301
Attn: Douglas F. Whitman
- ---------------------------------------------------------------------------------------------------
Seligman Communications and 125 University Avenue $14,999,999 2,626,970
Information Fund, Inc. Palo Alto, CA 94301 *
- ---------------------------------------------------------------------------------------------------
</TABLE>
* Whitman Partners, L.P. ("Whitman") and Seligman Communications and Information
Fund, Inc. ("Seligman") shall be entitled, but not obligated, to purchase on a
pro rata basis any Shares allocated to the Investors listed above if such
Investors fail to purchase such Shares. If the Company does not borrow at least
$12,000,000 from either Foothill Capital Corporation or Greyrock Capital, then
Whitman and Seligman (or their designees, subject to the approval of the
Company such approval not to be unreasonably withheld) shall be entitled, but
not obligated, to purchase at the Closing on a pro rata basis up to an
additional 175,132 Shares at the same per share price as the Shares.
Schedule A-2
<PAGE>
SCHEDULE B
ABA Routing #: 321171184
Account #: 200018638
Account Name: Shartsis, Friese & Ginsburg LLP Trust Account
Bank Name: Citibank, FSB
Bank Address: One Sansome Street, 24th Floor, San Francisco, CA 94104
Reference: P-Com (4146.8)
SCHEDULE B
<PAGE>
EXHIBIT A
January __, 2000
To the Investors listed on
Schedule A to the Common
Stock PIPES Purchase Agreement dated January 6, 2000
Ladies and Gentlemen:
We have acted as counsel for P-Com, Inc., a Delaware corporation (the
"Company"), in connection with the issuance and sale to you of 7,530,642 shares
of its common stock, par value $.0001 per share, pursuant to the Common Stock
PIPES Purchase Agreement dated January 6, 2000 (the "Stock Purchase Agreement")
among the Company and you. This opinion letter is being rendered to you
pursuant to Section 5.4 of the Stock Purchase Agreement in connection with the
Closing of the sale of the Shares. Capitalized terms not otherwise defined in
this opinion letter have the meanings given them in the Stock Purchase
Agreement.
In connection with the opinions expressed herein, we have made such
examination of matters of law and of fact as we considered appropriate or
advisable for purposes hereof. As to matters of fact material to the opinions
expressed herein, we have relied upon the representations and warranties as to
factual matters contained in and made by the Company pursuant to the Stock
Purchase Agreement and upon certificates and statements of government officials
and of officers of the Company. We have also examined originals or copies of
such corporate documents or records of the Company as we have considered
appropriate for the opinions expressed herein. We have assumed for the purposes
of this opinion letter the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of the documents submitted to us as originals,
the conformity to the original documents of all documents submitted to us as
certified, facsimile or photostatic copies, and the authenticity of the
originals of such copies.
In rendering this opinion letter we have also assumed: (A) that the Stock
Purchase Agreement has been duly and validly executed and delivered by you or on
your behalf, that you have the power to enter into and perform all your
obligations thereunder, and that the Stock Purchase Agreement constitutes a
valid, legal, binding and enforceable obligation upon you; (B) that the
representations and warranties made in the Stock Purchase Agreement by you are
true and correct; (C) that any wire transfers, drafts or checks tendered by you
will be honored; (D) that you have filed any required State Franchise income or
similar tax returns and have paid any required State Franchise, income or
similar taxes; and (E) that neither Whitman Partners, L.P. nor Seligman
Communications and Information Fund, Inc., nor any person who "controls" either
of them within the meaning of the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, holds any voting securities of the Company as of immediately before the
Closing.
As used in this opinion letter, the expression "we are not aware" or the
phrase "to our knowledge", or any similar expression or phrase with respect to
our knowledge of matters of fact, means as to matters of fact that, based on the
actual knowledge of individual attorneys
Exhibit A-1
<PAGE>
within the firm principally responsible for handling current matters for the
Company (and not including any constructive or imputed notice of any
information), and after an examination of documents referred to herein and after
inquiries of certain officers of the Company, no facts have been disclosed to us
that have caused us to conclude that the opinions expressed are factually
incorrect; but beyond that we have made no factual investigation for the
purposes of rendering this opinion letter. Specifically, but without limitation,
we have not searched the dockets of any courts and we have made no inquiries of
securities holders or employees of the Company, other than such officers.
This opinion letter relates solely to the laws of the State of California,
the General Corporation Law of the State of Delaware and the federal law of the
United States and we express no opinion with respect to the effect or
application of any other laws. Special rulings of authorities administering
such laws or opinions of other counsel have not been sought or obtained.
Based upon our examination of and reliance upon the foregoing and subject
to the limitations, exceptions, qualifications and assumptions set forth below
and except as set forth in the Stock Purchase Agreement or the Disclosure
Schedule thereto, we are of the opinion that as of the date hereof:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and the Company has
the requisite corporate power and authority to own its properties and to conduct
its business as, to our knowledge, it is presently conducted. The Company is
qualified to do business as a foreign corporation in the state of California.
2. The Company has the requisite corporate power and authority to
execute, deliver and perform the Stock Purchase Agreement, and to issue the
Shares, the Warrant and the Warrant Shares. The Stock Purchase Agreement has
been duly and validly authorized by the Company, duly executed and delivered by
an authorized officer of the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable by you against the Company in accordance
with its terms.
3. The Shares have been duly authorized and, upon purchase at the Closing
pursuant to the terms of the Stock Purchase Agreement, will be validly issued,
nonassessable and fully paid, and free of any liens created by the Company. If
and when issued in accordance with the terms of the Stock Purchase Agreement the
Warrants will be, and if and when issued upon exercise of the Warrants pursuant
to the terms of the Warrants the Warrant Shares will be, validly issued,
nonassessable and fully paid, and free of any liens created by the Company.
4. The Company's execution and delivery of, and its performance and
compliance as of the date hereof with the terms of, the Stock Purchase Agreement
do not violate any provision of any federal, Delaware corporate or California
law, rule or regulation applicable to the Company or any provision of the
Company's Restated Certificate of Incorporation or Bylaws and do not conflict
with or constitute a default under the provisions of any judgment, writ, decree
or order specifically identified in the SEC Reports or the material provisions
of any of the material agreements specifically identified in the SEC Reports.
Exhibit A-2
<PAGE>
5. Other than in connection with any securities laws, all consents,
approvals, permits, orders or authorizations of, and all qualifications by and
registrations with, any federal or Delaware corporate or California state
governmental authority on the part of the Company required in connection with
the execution and delivery of the Stock Purchase Agreement and consummation at
the Closing of the transactions contemplated by the Stock Purchase Agreement
have been obtained, and are effective, and we are not aware of any proceedings,
or written threat of any proceedings, that question the validity thereof.
6. Based in part upon the representations of you in the Stock Purchase
Agreement, the offer and sale of the Shares to you pursuant to the terms of the
Stock Purchase Agreement are exempt from the registration requirements of
Section 5 of the Securities Act of 1933, as amended, and from the qualification
requirements of the California Corporate Securities Law of 1968, as amended.
Our opinions expressed above are specifically subject to the following
limitations, exceptions, qualifications and assumptions:
(A) The legality, validity, binding nature and enforceability of the
Company's obligations under the Stock Purchase Agreement may be subject to or
limited by (1) bankruptcy, insolvency, reorganization, arrangement, moratorium,
fraudulent transfer and other similar laws affecting the rights of creditors
generally; (2) general principles of equity (whether relief is sought in a
proceeding at law or in equity), including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, and the discretion of
any court of competent jurisdiction in awarding specific performance or
injunctive relief and other equitable remedies; and (3), without limiting the
generality of the foregoing, the effect of California court decisions and
statutes which indicate that provisions of the Stock Purchase Agreement which
permit you to take action or make determinations may be subject to a requirement
that such action be taken or such determinations be made on a reasonable basis
in good faith or that it be shown that such action is reasonably necessary for
your protection.
(B) We express no opinion as to the Company's compliance or noncompliance
with applicable federal or state antifraud or antitrust statutes, laws, rules
and regulations.
(C) We express no opinion concerning the past, present or future fair
market value of any securities.
(D) We express no opinion as to the enforceability under certain
circumstances of any provisions indemnifying a party against, or requiring
contributions toward, that party's liability for its own wrongful or negligent
acts, or where indemnification or contribution is contrary to public policy or
prohibited by law. In this regard, we advise you that in the opinion of the
Securities and Exchange Commission, indemnification of directors, officers and
controlling persons of an issuer against liabilities arising under the
Securities Act of 1933, as amended, is against public policy and is therefore
unenforceable.
(E) We express no opinion as to the enforceability under certain
circumstances of any provisions prohibiting waivers of any terms of the Stock
Purchase Agreement other than in writing, or prohibiting oral modifications
thereof or modification by course of dealing. In
Exhibit A-3
<PAGE>
addition, our opinions are subject to the effect of judicial decisions which may
permit the introduction of extrinsic evidence to interpret the terms of written
contracts.
(F) We express no opinion as to the effect of Section 1670.5 of the
California Civil Code or any other California law, federal law or equitable
principle which provides that a court may refuse to enforce, or may limit the
application of, a contract or any clause thereof which the court finds to have
been unconscionable at the time it was made or contrary to public policy.
(G) We express no opinion as to your compliance with any Federal or state
law relating to your legal or regulatory status.
(H) We express no opinion as to the compliance of the Company, you or the
sale of the Common Stock to you with the provisions of the Small Business
Investment Act of 1958, as amended, or any of the regulations promulgated
thereunder.
(I) We express no opinion as to the effect of subsequent issuances of
securities of the Company, to the extent that further issuances which may be
integrated with the Closing may include purchasers that do not meet the
definition of "accredited investors" under Rule 501 of Regulation D and
equivalent definitions under state securities or "blue sky" laws.
(J) We express no opinion as to Section 7.2 of the Stock Purchase
Agreement to the extent that it purports to exclude conflict of law principles
under California law.
This opinion letter is rendered as of the date first written above solely
for your benefit in connection with the Stock Purchase Agreement and may not be
delivered to, quoted or relied upon by any person other than you, or for any
other purpose, without our prior written consent. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company or the
Shares. We assume no obligation to advise you of facts, circumstances, events
or developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinions expressed herein.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
Exhibit A-4
<PAGE>
EXHIBIT B
_____________, 2000
To the Investors listed on
Schedule A to the Common
Stock PIPES Purchase Agreement dated January 6, 2000
Ladies and Gentlemen:
We have acted as counsel for P-Com, Inc., a Delaware corporation (the
"Company"), in connection with the issuance and sale to you of certain Shares of
its common stock, par value $.0001 per share, pursuant to the Common Stock
PIPES Purchase Agreement dated January 6, 2000 (the "Stock Purchase Agreement")
among the Company and you and in connection with the Company's registration with
the SEC of such Shares for resale by you. This opinion letter is being rendered
to you pursuant to Section 4.2(b) of the Stock Purchase Agreement in connection
with the SEC declaring effective the Registration Statement for your resale of
the Shares. Capitalized terms not otherwise defined in this opinion letter have
the meanings given them in the Stock Purchase Agreement.
In our capacity as counsel to the Company, we have examined, among other
things, originals, or copies identified to our satisfaction as being true
copies, of the Registration Statement on Form S-1 (File No. 333-____________)
initially filed by the Company with the SEC on ____________, 2000, for the
purpose of registering the resale of the Shares under the Securities Act;
Amendment No. 1 to such Registration Statement filed with the SEC on
_____________, 2000; Amendment No. 2 to such Registration Statement filed with
the SEC on _____________, 2000; and oral advice on ______________, 2000, from an
SEC staff examiner, that the SEC had declared such Registration Statement, as so
amended, effective as of ______ p.m., Washington, D.C. time, on _____________,
2000.
As used in this opinion letter, the phrase "to our knowledge" means as to
matters of fact that, based on the actual knowledge of individual attorneys
within the firm principally responsible for handling current matters for the
Company (and not including any constructive or imputed notice of any
information), no facts have been disclosed to us that have caused us to conclude
that the opinions expressed are factually incorrect; but our affirmative factual
investigation for the purpose of rendering this opinion letter has been limited
to obtaining (a) oral advice received on ___________, from an SEC staff
examiner, that the SEC had declared such Registration Statement, as amended,
effective at _____ p.m. Washington, D.C. time, on _________, 2000 and (b) oral
advice received on ___________, 2000 from an SEC staff examiner that there is no
stop order suspending the effectiveness of the Registration Statement.
Based upon our examination of and reliance upon the foregoing, we are of
the opinion that as of the date hereof:
Exhibit B-1
<PAGE>
1. The Registration Statement has become effective under the Securities
Act and, to our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose are
pending before or contemplated by the SEC.
This opinion letter is rendered as of the date first written above solely
for your benefit in connection with the Stock Purchase Agreement and the
Registration Statement and may not be delivered to, quoted or relied upon by any
person other than you, or for any other purpose, without our prior written
consent. Our opinion is expressly limited to the matters set forth above and we
render no opinion, whether by implication or otherwise, as to any other matters
relating to the Company, the Stock Purchase Agreement, the Registration
Statement or the Shares. We assume no obligation to advise you of facts,
circumstances, events or developments which hereafter may be brought to our
attention and which may alter, affect or modify the opinions expressed herein.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
Exhibit B-2
<PAGE>
EXHIBIT C
THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SUCH ACT.
WARRANT TO PURCHASE COMMON STOCK
of
P-COM, INC.
Void after ____________, 200__
This Warrant is issued to __________________, or its registered assigns
("Holder"), by P-Com, Inc., a Delaware corporation (the "Company"), on
___________, 200__ (the "Warrant Issue Date"). This Warrant is issued in
connection with the Company's issuance to the Holder of Common Stock on January
__, 2000, and the Company's failure to timely register such Common Stock for
resale under the Securities Act of 1933.
1. Purchase Shares. Subject to the terms and conditions hereinafter set
---------------
forth, the Holder is entitled, upon surrender of this Warrant at the principal
office of the Company (or at such other place as the Company shall notify the
holder hereof in writing), to purchase from the Company _____________ fully paid
and nonassessable shares of Common Stock of the Company, as constituted on the
Warrant Issue Date (the "Common Stock"). The number of shares of Common Stock
issuable pursuant to this Section 1 (the "Shares") shall be subject to
adjustment pursuant to Section 4 hereof.
2. Exercise Price. The purchase price for the Shares shall be $______
--------------
per share, as adjusted from time to time pursuant to Section 9 hereof (the
"Exercise Price"). It is acknowledged that the Exercise Price is based on
negotiated terms and is not intended to reflect the current fair market value of
the Common Stock.
3. Exercise Period. Subject to Section 4 below, this Warrant shall be
---------------
exercisable, in whole or in part, during the term commencing on the Warrant
Issue Date and ending at 5:00 p.m. on the third anniversary of the Warrant
Issuance Date.
Exhibit C-1
<PAGE>
4. Early Termination, Antidilution Adjustments and Registration Statement
----------------------------------------------------------------------
Adjustments.
- -----------
(a) In case of any consolidation of the Company with, or merger of the
Company into, any other corporation (other than a consolidation or merger in
which the Company is the continuing corporation and in which no change occurs in
its outstanding Common Stock), or in case of any sale or transfer of all or
substantially all of the assets of the Company, or in the case of any statutory
exchange of securities with another corporation (including any exchange effected
in connection with a merger of a third corporation into the Company, except
where the Company is the surviving entity and no change occurs in its
outstanding Common Stock), the corporation formed by such consolidation or the
corporation resulting from or surviving such merger or the corporation which
shall have acquired such assets or securities of the Company, as the case may
be, shall execute and deliver to the Holder simultaneously therewith a new
Warrant, satisfactory in form and substance to the Holder, together with such
other documents as the Holder may reasonably request, entitling the Holder
thereof to receive upon exercise of such Warrant the kind and amount of shares
of stock and other securities and property receivable upon such consolidation,
merger, sale, transfer, or exchange of securities, or upon the dissolution
following such sale or other transfer, by a holder of the number of shares of
Common Stock purchasable upon exercise of this Warrant immediately prior to such
consolidation, merger, sale, transfer, or exchange. Such new Warrant shall
contain the same basic other terms and conditions as this Warrant and shall
provide for adjustments which, for events subsequent to the effective date of
such written instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section 4. The above provisions of this
Section 4(a) shall similarly apply to successive consolidations, mergers,
exchanges, sales or other transfers covered hereby. Notwithstanding the
foregoing, in the event the consideration to be paid to holders of Company
capital stock in any transaction of the nature referred to above in this Section
4(a) (a "Transaction") consists of cash or cash equivalents, then, provided that
the Company shall have given the holder hereof the notice required by Section 9,
this Warrant shall, to the extent it has not been exercised by the effective
date of such Transaction, terminate upon the completion of such Transaction.
(b) If the Company at any time shall, by subdivision, combination or
reclassification of securities or otherwise, change any of the securities to
which purchase rights under this Warrant exist into the same or a different
number of securities of any class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities which
were subject to the purchase rights under this Warrant immediately prior to such
subdivision, combination, reclassification or other change. If shares of the
Company's Common Stock are subdivided or combined into a greater or smaller
number of shares of Common Stock, the purchase price under this Warrant shall be
proportionately reduced in the case of a subdivision of shares or
proportionately increased in the case of a combination of shares, in both cases
by the ratio which the total number of shares of Common Stock to be outstanding
immediately after such event bears to the total number of shares of Common Stock
outstanding immediately prior to such event.
Exhibit C-2
<PAGE>
(c) Except as set forth herein, no adjustment on account of cash dividends
on the Company's Common Stock or other securities purchasable hereunder will be
made to the purchase price under this Warrant.
(d) The Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common Stock upon the
exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of the Company's Common
Stock upon the exercise of the purchase rights under this Warrant. The Company
further covenants and agrees (i) that it will not, by amendment of its
Certificate of Incorporation or through reorganization, consolidation, merger,
dissolution or sale of assets, or by any other voluntary act, avoid or seek to
avoid the observation or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company, (ii) promptly
to take such action as may be required of the Company to permit the Holder to
exercise this Warrant and the Company duly and effectively to issue shares of
its Common Stock or other securities as provided herein upon the exercise hereof
and (iii) promptly to take all action required or provided herein to protect the
rights of the Holder granted hereunder against dilution.
(e) If the Company declares a dividend on Common Stock, or makes a
distribution to holders of Common Stock, and such dividend or distribution is
payable or made in Common Stock or securities convertible into or exchangeable
for Common Stock, or rights to purchase Common Stock or securities convertible
into or exchangeable for Common Stock, the number of shares of Common Stock for
which this Warrant may be exercised shall be increased, as of the record date
for determining which holders of Common Stock shall be entitled to receive such
dividend or distribution, in proportion to the increase in the number of
outstanding shares (and shares of Common Stock issuable upon conversion of all
such securities convertible into Common Stock) of Common Stock as a result of
such dividend or distribution, and the Exercise Price shall be adjusted so that
the aggregate amount payable for the purchase of all the Warrant Shares issuable
hereunder immediately after the record date for such dividend or distribution
shall equal the aggregate amount so payable immediately before such record date.
(f) If the Company declares a dividend on Common Stock (other than a
dividend covered by subsection (e) above) or distributes to holders of its
Common Stock, other than as part of its dissolution or liquidation or the
winding up of its affairs, any shares of its capital stock, any evidence of
indebtedness or any cash or other of its assets (other than Common Stock or
securities convertible into or exchangeable for Common Stock), the Holder shall
receive notice of such event as set forth in Section 9 below.
(g) If the Company shall, at any time before the expiration of this
Warrant, sell all or substantially all of its assets and distribute the proceeds
thereof to the Company's stockholders, the Holder shall, upon exercise of this
Warrant have the right to receive, in lieu of the shares of Common Stock of the
Company that the Holder otherwise would have been entitled to receive, the same
kind and amount of assets as would have been issued, distributed or paid to the
Holder upon any such distribution with respect to such shares of Common Stock of
the Company had
Exhibit C-3
<PAGE>
the Holder been the holder of record of such shares of Common Stock receivable
upon exercise of this Warrant on the date for determining those entitled to
receive any such distribution. If any such distribution results in any cash
distribution in excess of the Exercise Price provided by this Warrant for the
shares of Common Stock receivable upon exercise of this Warrant, the Holder may,
at the Holder's option, exercise this Warrant without making payment of the
Exercise Price and, in such case, the Company shall, upon distribution to the
Holder, consider the Exercise Price to have been paid in full and, in making
settlement to the Holder, shall obtain receipt of the Exercise Price by
deducting an amount equal to the Exercise Price for the shares of Common Stock
receivable upon exercise of this Warrant from the amount payable to the Holder.
Notwithstanding the foregoing, in the event the consideration to be paid to
holders of Company capital stock in any transaction of the nature referred to
above in this Section 4(g) (an "Asset Sale Transaction") consists of cash or
cash equivalents and the consideration payable per share of Common Stock of the
Company is less than the Exercise Price hereunder, then, provided that the
Company shall have given the holder hereof the notice required by Section 9,
this Warrant shall, to the extent it has not been exercised by the effective
date of such Transaction, terminate upon the completion of such Transaction.
(h) The term "Common Stock" shall mean the Common Stock of the Company as
the same exists at January 6, 2000 or as such stock may be constituted from time
to time, except that for the purpose of this Section 4, the term "Common Stock"
shall include any stock of any class of the Company which has no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which is
not subject to redemption by the Company.
(i) Whenever the number of Warrant Shares or the Exercise Price shall be
adjusted as required by the provisions of this Section 4, the Company forthwith
shall file in the custody of its secretary or an assistant secretary, at its
principal office, and furnish to each Holder hereof, a certificate prepared by
its Chief Financial Officer, showing the adjusted number of Warrant Shares and
the adjusted Exercise Price and setting forth in reasonable detail the
circumstances requiring the adjustments.
(j) No adjustment in the Exercise Price in accordance with the provisions
of this Section 4 need be made if such adjustment would amount to a change in
such Exercise Price of less than $.01; provided however, that the amount by
which any adjustment is not made by reason of the provisions of this Section
4(j) shall be carried forward and taken into account at the time of any
subsequent adjustment in the Exercise Price.
(k) If an adjustment is made under this Section 4 and the event to which
the adjustment relates does not occur, then any adjustments in accordance with
this Section 4 shall be readjusted to the Exercise Price and the number of
Warrant Shares which would be in effect had the earlier adjustment not been
made.
5. Method of Exercise. While this Warrant remains outstanding and
------------------
exercisable in accordance with Section 3 above, the Holder may exercise, in
whole or in part, the purchase rights evidenced hereby. Such exercise shall be
effected by:
Exhibit C-4
<PAGE>
(a) the surrender of the Warrant, together with a duly executed copy
of the form of Notice of Exercise attached hereto, to the Secretary of the
Company at its principal offices; and
(b) the payment to the Company of cash equal to the aggregate
Exercise Price for the number of Shares being purchased.
6. Net Exercise. In lieu of exercising this Warrant pursuant to Section
------------
5, the Holder may elect to receive, without the payment by the Holder of any
additional consideration, shares of Common Stock equal to the value of the
"spread" on the Shares (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with the Notice of
Exercise, in which event the Company shall issue to the holder hereof a number
of shares of Common Stock computed using the following formula:
Y (A - B)
---------
X = A
Where: X = The number of shares of Common Stock to be issued to the Holder
pursuant to this net exercise;
Y = The number of Shares in respect of which the net issue election
is made;
A = The fair market value of one share of the Common Stock at the
time the net issue election is made;
B = The Exercise Price (as adjusted to the date of the net issuance).
For purposes of this Section 6, the fair market value of one share of Common
Stock as of a particular date shall be determined as follows: (i) if traded on
a securities exchange or through the Nasdaq National Market, the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the sixty (60) day period ending three (3) days prior to the net
exercise election; and (ii) if traded over-the-counter but not on the Nasdaq
National Market, the value shall be deemed to be the average of the closing bid
or sale prices (whichever is applicable) over the sixty (60) day period ending
three (3) days prior to the net exercise.
7. Certificates for Shares. Upon the exercise of the purchase rights
-----------------------
evidenced by this Warrant, one or more certificates for the number of Shares so
purchased shall be issued as soon as practicable thereafter (with appropriate
restrictive legends, if applicable).
8. Issuance of Shares. The Company covenants that the Shares, when
------------------
issued pursuant to the exercise of this Warrant, will be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens, and charges
with respect to the issuance thereof.
9. Notice of Adjustment. So long as this Warrant shall be outstanding,
--------------------
(a) if the Company shall propose to pay any dividends or make any distribution
upon the Common Stock, or (b) if the Company shall offer generally to the
holders of Common Stock the right to subscribe to or purchase any shares of any
class of Common Stock or securities convertible into Common Stock or any other
similar rights, or (c) if there shall be any proposed capital reorganization of
Exhibit C-5
<PAGE>
the Company in which the Company is not the surviving entity, recapitalization
of the capital stock of the Company, consolidation or merger of the Company with
or into another corporation, sale, lease or other transfer of all or
substantially all of the property and assets of the Company, or voluntary or
involuntary dissolution, liquidation or winding up of the Company, or (d) if the
Company shall give to its stockholders any notice, report or other communication
respecting any significant or special action or event, then in such event, the
Company shall give to the Holder, at least ten (10) days prior to the relevant
date described below, a notice containing a description of the proposed action
or event and stating the date or expected date on which a record of the
Company's stockholders is to be taken for any of the foregoing purposes, and the
date or expected date on which any such dividend, distribution, subscription,
reclassification, reorganization, consolidation, combination, merger,
conveyance, sale, lease or transfer, dissolution, liquidation or winding up is
to take place and the date or expected date, if any is to be fixed, as of which
the holders of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities or other property deliverable upon such event.
10. No Fractional Shares or Scrip. No fractional shares or scrip
-----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant, but in lieu of such fractional shares the Company shall make a cash
payment therefor on the basis of the Exercise Price then in effect.
11. No Stockholder Rights. Prior to exercise of this Warrant, the Holder
---------------------
shall not be entitled to any rights of a stockholder with respect to the Shares,
including (without limitation) the right to vote such Shares, receive dividends
or other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or
other communication concerning the business or affairs of the Company. However,
nothing in this Section 11 shall limit the right of the Holder to be provided
the Notices required under this Warrant.
12. Transfers of Warrant. Subject to compliance with applicable federal
--------------------
and state securities laws, this Warrant and all rights hereunder are
transferable in whole or in part by the Holder to any person or entity upon
written notice to the Company in substantially the form as Exhibit A hereto.
The transfer shall be recorded on the books of the Company upon the surrender of
this Warrant, properly endorsed, to the Company at its principal offices. In
the event of a partial transfer, the Company shall issue to the holders one or
more appropriate new warrants.
13. Successors and Assigns. The terms and provisions of this Warrant
----------------------
shall inure to the benefit of, and be binding upon, the Company and the Holder
and their respective successors and assigns.
14. Amendments and Waivers. Any term of this Warrant may be amended and
----------------------
the observance of any term of this Warrant may be waived (either generally or in
a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Holder.
15. Notices. All notices required under this Warrant and shall be deemed
-------
to have been given or made for all purposes (i) upon personal delivery, (ii)
upon confirmation receipt
Exhibit C-6
<PAGE>
that the communication was successfully sent to the applicable number if sent by
facsimile; (iii) one day after being sent, when sent by professional overnight
courier service, or (iv) five days after posting when sent by registered or
certified mail. Notices to the Company shall be sent to the principal office of
the Company (or at such other place as the Company shall notify the Holder
hereof in writing). Notices to the Holder shall be sent to the address of the
Holder on the books of the Company (or at such other place as the Holder shall
notify the Company hereof in writing).
16. Attorneys' Fees. If any action of law or equity is necessary to
---------------
enforce or interpret the terms of this Warrant, the prevailing party shall be
entitled to its reasonable attorneys' fees, costs and disbursements in addition
to any other relief to which it may be entitled.
17. Captions. The section and subsection headings of this Warrant are
--------
inserted for convenience only and shall not constitute a part of this Warrant in
construing or interpreting any provision hereof.
18. Governing Law. This Warrant shall be governed by the laws of the
-------------
State of California as applied to agreements among California residents made and
to be performed entirely within the State of California.
19. Registration Rights. The Holder of this Warrant and the Warrant
-------------------
Shares are entitled to the rights and benefits of all of the terms, provisions
and conditions of that certain Common Stock PIPES Purchase Agreement dated
January 6, 2000 between the Company and Holders and others, including but not
limited to the registration rights contained in Section 4 thereof.
IN WITNESS WHEREOF, P-Com, Inc. caused this Warrant to be executed by an
officer thereunto duly authorized.
P-COM, INC.
By:_________________________________________
Chief Financial Officer
Exhibit C-7
<PAGE>
NOTICE OF EXERCISE
To: P-COM, INC.
The undersigned hereby elects to [check applicable subsection]:
________ (a) Purchase _________________ shares of Common Stock of P-Com, Inc.,
pursuant to the terms of the attached Warrant and payment of the
Exercise Price per share required under such Warrant accompanies
this notice;
OR
________ (b) Exercise the attached Warrant for [all of the shares] [________
of the shares] [cross out inapplicable phrase] purchasable under
the Warrant pursuant to the net exercise provisions of Section 6
of such Warrant.
The undersigned hereby represents and warrants that the undersigned is acquiring
such shares for its own account for investment purposes only, and not for resale
or with a view to distribution of such shares or any part thereof.
WARRANTHOLDER:
____________________________________
By:_________________________________
Address: ____________________________________
____________________________________
Date: ______________________
Name in which shares should be registered:
__________________________________________
Exhibit C-8
<PAGE>
Exhibit A to Warrant:
ASSIGNMENT FORM
---------------
(To assign the foregoing Warrant, execute
this form and supply required information.
Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
________________________________________________________________________________
(Please Print)
whose address is _______________________________________________________________
(Please Print)
________________________________________________________________________________
Dated:______________________, 200_.
Holder's Signature:_______________________________
Holder's Address:_________________________________
__________________________________________________
Signature Guaranteed:___________________________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
Exhibit A to Warrant
<PAGE>
EXHIBIT 10.61
[LOGO OF GREYROCK CAPITAL]
Loan and Security Agreement
Borrower: P-Com, Inc.
Address: 3175 S. Winchester Blvd.
Campbell, California 95008
Date: January 14, 2000
This Loan and Security Agreement is entered into on the above date between
GREYROCK CAPITAL, a Division of Banc of America Commercial Finance Corporation
(Greyrock), whose address is 10880 Wilshire Blvd. Suite 1850, Los Angeles, CA
90024 and the borrower named above (Borrower), whose chief executive office is
located at the above address (Borrower's Address). The Schedule to this
Agreement (the Schedule) being signed concurrently is an integral part of this
Agreement. (Definitions of certain terms used in this Agreement are set forth
in Section 8 below.)
1. LOANS.
1.1 Loans. Greyrock will make loans to Borrower (the Loans), in amounts
determined by Greyrock in its sole discretion, up to the amounts (the Credit
Limit) shown on the Schedule, provided no Default or Event of Default has
occurred and is continuing. If at any time or for any reason the total of all
outstanding Loans and all other Obligations exceeds the Credit Limit, Borrower
shall immediately pay the amount of the excess to Greyrock, without notice or
demand.
1.2 Interest. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement or in another written agreement signed by
Greyrock and Borrower. Interest shall be payable monthly, on the last day of the
month. Interest may, in Greyrock's discretion, be charged to Borrower's loan
account, and the same shall thereafter bear interest at the same rate as the
other Loans.
1.3 Fees. Borrower shall pay Greyrock the fee(s) shown on the Schedule,
which are in addition to all interest and other sums payable to Greyrock and are
not refundable.
2. SECURITY INTEREST.
2.1 Security Interest. To secure the payment and performance of all of the
Obligations when due, Borrower hereby grants to Greyrock a security interest in
all of Borrower's interest in the following, whether now owned or hereafter
acquired, and wherever located (collectively, the Collateral): All Receivables,
Inventory, Equipment, Investment Property and General Intangibles, including,
without limitation, all of Borrower's Deposit Accounts, all money, all
collateral in which Greyrock is granted a security interest pursuant to any
other present or future agreement, all property now or at any time in the future
in Greyrock's possession, and all proceeds (including proceeds of any insurance
policies, proceeds of proceeds and claims against third parties), all products
of the foregoing, and all books and records related to any of the foregoing*.
*provided that the Collateral shall not include any right, title or interest
of Borrower arising under any license or other agreement to the extent that the
grant of a security interest in the same is validly prohibited by such license
or other agreement
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
In order to induce Greyrock to enter into this Agreement and to make Loans,
Borrower represents and warrants to Greyrock as follows, and Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants:
3.1 Corporate Existence and Authority. Borrower, if a corporation, is and
will continue to be, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation. Borrower is and will continue
to be qualified and licensed to do business in all jurisdictions in which any
failure to do so would have a material adverse effect on Borrower. The
execution, delivery and performance by Borrower of this Agreement, and all other
documents contemplated hereby (i) have been duly and validly authorized, (ii)
are enforceable against Borrower in accordance with their terms (except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally), (iii) do not violate Borrower's articles or certificate of
incorporation, or Borrower's by-laws, or any law or any material agreement or
instrument which is binding upon Borrower or its property*, and (iv) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any material agreement or instrument which is binding upon Borrower or its
property.
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<PAGE>
Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
*if such violation would have a material adverse effect on Borrower
3.2 Name; Trade Names and Styles. The name of Borrower set forth in the
heading to this Agreement is its correct name. Listed on the Schedule are all
prior names of Borrower and all of Borrower's present and prior trade names.
Borrower shall give Greyrock 30 days' prior written notice before changing its
name or doing business under any other name. Borrower has complied, and will in
the future comply, with all laws relating to the conduct of business under a
fictitious business name.
3.3 Place of Business; Location of Collateral. The address set forth in the
heading to this Agreement is Borrower's chief executive office. In addition,
Borrower has places of business and Collateral is located only at the locations
set forth on the Schedule. Borrower will give Greyrock at least 30 days prior
written notice before opening any additional place of business, changing its
chief executive office, or moving any of the Collateral to a location other than
Borrower's Address or one of the locations set forth on the Schedule.
3.4 Title to Collateral; Permitted Liens. Borrower is now, and will at all
times in the future be, the sole owner of all the Collateral, except for items
of Equipment which are leased by Borrower*. The Collateral now is and will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for Permitted Liens. Greyrock now has,
and will continue to have, a first-priority perfected and enforceable security
interest in all of the Collateral, subject only to the Permitted Liens, and
Borrower will at all times defend Greyrock and the Collateral against all claims
of others. So long as any Loan is outstanding which is a term loan, none of the
Collateral now is or will be affixed to any real property in such a manner, or
with such intent, as to become a fixture. Borrower is not and will not become a
lessee under any real property lease pursuant to which the lessor may obtain any
rights in any of the Collateral *** and no such lease now prohibits, restrains,
impairs or will prohibit, restrain or impair Borrower's right to remove any
Collateral from the leased premises. Whenever any Collateral is located upon
premises in which any third party has an interest (whether as owner, mortgagee,
beneficiary under a deed of trust, lien or otherwise), Borrower shall, whenever
requested by Greyrock, use its best efforts to cause such third party to execute
and deliver to Greyrock, in form acceptable to Greyrock, such waivers and
subordinations as Greyrock shall specify, so as to ensure that Greyrock's rights
in the Collateral are, and will continue to be, superior to the rights of any
such third party. Borrower will keep in full force and effect, and will comply
with all the terms of, any lease of real property where any of the Collateral
now or in the future may be located**.
*and interests in Collateral licensed by Borrower in the ordinary course of
business
**in each case in all material respects
***except for Permitted Liens
3.5 Maintenance of Collateral. Borrower will maintain the * Collateral in
good working condition, ordinary wear and tear excepted, and Borrower will not
use the Collateral for any unlawful purpose. Borrower will immediately advise
Greyrock in writing of any material loss or damage to the Collateral.
*all material tangible personal property
3.6 Books and Records. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with generally accepted accounting principles.
3.7 Financial Condition, Statements and Reports. All financial statements now
or in the future delivered to Greyrock have been, and will be, prepared in
conformity with generally accepted accounting principles and now and in the
future will completely and fairly reflect the financial condition of Borrower,
at the times and for the periods therein stated. Between the last date covered
by any such statement provided to Greyrock and the date hereof, there has been
no material adverse change in the financial condition or business of Borrower.
Borrower is now and will continue to be solvent.
3.8 Tax Returns and Payments; Pension Contributions. Borrower has timely
filed, and will timely file, all tax returns and reports required by applicable
law, and Borrower has timely paid, and will timely pay, all applicable taxes,
assessments, deposits and contributions now or in the future owed by Borrower.
Borrower may, however, defer payment of any contested taxes, provided that
Borrower (i) in good faith contests Borrower's obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, (ii)
notifies Greyrock in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral. Borrower is unaware of any claims or adjustments proposed for any
of Borrower's prior tax years which could result in additional taxes becoming
due and payable by Borrower. Borrower has paid, and shall continue to pay all
amounts necessary to fund all present and future pension, profit sharing and
deferred compensation plans in accordance with their terms, and Borrower has not
and will not withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any
such plan which could result in any liability of Borrower, including any
liability to the Pension Benefit Guarantee Corporation or any other governmental
agency. Borrower shall, at all times, maintain a separate payroll account which
shall be used exclusively for payment of payroll and payroll taxes and other
items related directly to payroll.
3.9 Compliance with Law. Borrower has complied, and will comply, in all
material respects, with all provisions of all applicable laws and regulations,
including, but not limited to, those relating to Borrower's ownership of real or
personal property, the conduct and licensing of Borrower's business, and all
environmental matters.
3.10 Litigation. Except as disclosed in the Schedule, there is no claim, suit,
litigation, proceeding or investigation pending or (to best of Borrower's
knowledge) threatened * by or against or affecting Borrower in any court or
before any governmental agency (or any basis therefor known to Borrower) which
may result, either separately or in the aggregate, in any material adverse
change in the
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<PAGE>
Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
financial condition or business of Borrower, or in any material impairment in
the ability of Borrower to carry on its business in substantially the same
manner as it is now being conducted. Borrower will promptly inform Greyrock in
writing of any claim, proceeding, litigation or investigation in the future
threatened or instituted by or against Borrower involving any single claim of **
or more, or involving *** or more in the aggregate.
*in writing
**$250,000 ***$500,000
3.11 Use of Proceeds. All proceeds of all Loans shall be used solely for
lawful business purposes.
3.12 Year 2000 Compliance. The Borrower has (i) initiated a review and
assessment of all areas within its and each of its subsidiaries' business and
operations (including those affected by suppliers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or any of its subsidiaries (or its suppliers
and vendors) may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem
on a timely basis, and (iii) to date, implemented that plan in accordance with
that timetable. The Borrower reasonably believes that all computer applications
(including those of its suppliers and vendors) that are material to its or any
of its subsidiaries' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so could not reasonably be expected to have material adverse effect. The
Borrower will promptly notify Greyrock in the event the Borrower discovers or
determines that any computer application (including those of its suppliers and
vendors) that is material to its or any of its subsidiaries' business and
operations will not be Year 2000 compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a material
adverse effect.
4. [OMITTED]
5. ADDITIONAL DUTIES OF THE BORROWER.
5.1 Insurance. Borrower shall, at all times, insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to Greyrock, in such form and amounts as Greyrock
may reasonably require, and Borrower shall provide evidence of such insurance to
Greyrock, so that Greyrock is * satisfied that such insurance is, at all times,
in full force and effect. All such insurance policies shall name Greyrock as an
additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to Greyrock. Upon receipt of the proceeds of any such
insurance, Greyrock shall ** Greyrock may require reasonable assurance that the
insurance proceeds so released will be so used. If Borrower fails to provide or
pay for any insurance, Greyrock may, but is not obligated to, obtain the same at
Borrower's expense. Borrower shall promptly deliver to Greyrock copies of all
reports made to insurance companies.
*reasonably
**release such proceeds to Borrower which shall be utilized by Borrower for
the replacement of the Collateral with respect to which the insurance proceeds
were paid
5.2 Reports. Borrower, at its expense, shall provide Greyrock with the
written reports set forth in the Schedule, and such other written reports with
respect to Borrower (including budgets, sales projections, operating plans and
other financial documentation), as Greyrock shall from time to time reasonably
specify .
5.3 Access to Collateral, Books and Records. At reasonable times, and on one
business day's notice, Greyrock, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy Borrower's books and records.
Greyrock shall take reasonable steps to keep confidential all * information
obtained in any such inspection or audit, but Greyrock shall have the right to
disclose any such information to its auditors**, regulatory agencies***, and
attorneys, and pursuant to any subpoena or other legal process. The foregoing
inspections and audits shall be at Borrower's expense and the charge therefor
shall be $600 per person per day (or such higher amount as shall represent
Greyrock's then current standard charge for the same), plus reasonable out-of-
pockets expenses. Borrower shall not be charged more than $3,000 per audit
(plus reasonable out-of-pockets expenses), nor shall audits be done more
frequently than four times per calendar year, provided that the foregoing limits
shall not apply after the occurrence of a Default or Event of Default, nor shall
they restrict Greyrock's right to conduct audits at its own expense (whether or
not a Default or Event of Default has occurred). Borrower will not enter into
any agreement with any accounting firm, service bureau or third party to store
Borrower's books or records at any location other than Borrower's Address,
without first obtaining Greyrock's written consent, which may be conditioned
upon such accounting firm, service bureau or other third party agreeing to give
Greyrock the same rights with respect to access to books and records and related
rights as Greyrock has under this Agreement.
*confidential
**(who have agreed to keep such information confidential)
***which require disclosure of such information
5.4 Remittance of Proceeds. All proceeds arising from the sale or other
disposition of any Collateral shall be delivered, in kind, by Borrower to
Greyrock in the original form in which received by Borrower not later than the
following business day after receipt by Borrower, to be applied to the
Obligations in such order as Greyrock shall determine, except for the proceeds
of the sale of obsolete or unneeded Equipment which is sold by Borrower in the
ordinary course of business and the proceeds of which are utilized to acquire
replacements for
-3-
<PAGE>
Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
such Equipment*. Except as permitted by the immediately preceding sentence,
Borrower shall not commingle proceeds of Collateral with any of Borrower's other
funds or property, and shall hold such proceeds separate and apart from such
other funds and property and in an express trust for Greyrock. Nothing in this
Section limits the restrictions on disposition of Collateral set forth elsewhere
in this Agreement.
*; provided that, prior to the effective date of the conversion of the Loans
to a Receivable Facility (as provided in Section 7(c) of the Schedule), Borrower
may retain the proceeds of its Receivables arising from the sale of Inventory or
the providing of services.
5.5 Negative Covenants. Except as may be permitted in the Schedule, Borrower
shall not, without Greyrock's prior written consent, do any of the following:
(i) merge or consolidate with another corporation or entity; (ii) acquire any
assets, except in the ordinary course of business; (iii) enter into any other
transaction outside the ordinary course of business; (iv) sell or transfer any
Collateral, except that, Borrower may sell finished Inventory in the ordinary
course of Borrower's business, and Borrower may sell or trade in Equipment in
the ordinary course of business which is unneeded****; (v) store any Inventory
or other Collateral with any warehouseman or other third party; (vi) sell any
Inventory on a sale-or-return, guaranteed sale, consignment, or other contingent
basis; (vii) make any loans of any money or other assets*; (viii) incur any
debts, outside the ordinary course of business, which would have a material,
adverse effect on Borrower or on the prospect of repayment of the Obligations;
(ix) guarantee or otherwise become liable with respect to the obligations of
another party or entity**; (x) pay or declare any dividends on Borrower's stock
(except for dividends payable solely in stock of Borrower); (xi) redeem, retire,
purchase or otherwise acquire, directly or indirectly, any of Borrower's
stock***; (xii) make any change in Borrower's capital structure which would have
a material adverse effect on Borrower or on the prospect of repayment of the
Obligations; or (xiii) dissolve or elect to dissolve; or (xiv) agree to do any
of the foregoing.
*, except in the case of (a) loans to employees or consultants of the
Borrower, in an amount in the aggregate not to exceed $250,000 at any time
outstanding, and (b) loans by the Borrower to any of its Subsidiaries; provided
that such loans are in the ordinary course of business
**other than a subsidiary of Borrower
*** except for redemption or purchase of stock owned by employees or
consultants pursuant to any stock compensation plans approved by the Borrower's
board of directors, provided the consideration paid therefor does not exceed
$250,000 in the aggregate in any fiscal year of Borrower
****and Borrower may sell its Techno Systems unit and CRC Business Systems
unit without Greyrock's prior written consent in good-faith arms' length
transactions (provided no Event of Default or event which with notice or lapse
of time would constitute an Event of Default has occurred and is continuing)
5.6 Litigation Cooperation. Should any third-party suit or proceeding be
instituted by or against Greyrock with respect to any Collateral or in any
manner relating to Borrower, Borrower shall, without expense to Greyrock, make
available Borrower and its officers, employees and agents, and Borrower's books
and records, without charge, to the extent that Greyrock may * deem them
necessary in order to prosecute or defend any such suit or proceeding.
*reasonably
5.7 Notification of Changes. Borrower will promptly notify Greyrock in
writing of any change in its officers or directors, the opening of any new bank
account or other deposit account, and any material adverse change in the
business or financial affairs of Borrower.
5.8 Investment Property. Upon the request of Greyrock, Borrower shall deliver
to Greyrock all certificated securities included in Investment Property, with
all necessary endorsements, and obtain such account control agreements with
securities intermediaries and take such other action with respect to any
Investment Property, as Greyrock shall * request, in form and substance *
satisfactory to Greyrock. Borrower shall have the right to retain all Investment
Property payments and distributions, unless and until a Default or an Event of
Default has occurred. If a Default or an Event of Default exists, Borrower
shall hold all payments on, and proceeds of, and distributions with respect to,
Investment Property in trust for Greyrock, and Borrower shall deliver all such
payments, proceeds and distributions to Greyrock, immediately upon receipt, in
their original form, duly endorsed, to be applied to the Obligations in such
order as Greyrock shall determine. Upon the request of Greyrock, any such
distributions and payments with respect to any Investment Property held in any
securities account shall be held and retained in such securities account as part
of the Collateral.
*reasonably
5.9 Further Assurances. Borrower agrees, at its expense, on request by
Greyrock, to execute all documents and take all actions, as Greyrock may deem
reasonably necessary or useful in order to perfect and maintain Greyrock's
perfected security interest in the Collateral, and in order to fully consummate
the transactions contemplated by this Agreement.
5.10 Indemnity. Borrower hereby agrees to indemnify Greyrock and hold Greyrock
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, costs and expenses (including
attorneys' fees), of every nature, character and description, which Greyrock may
sustain or incur based upon or arising out of any of the Obligations, any actual
or alleged failure to collect and pay over any withholding or other tax relating
to Borrower or its employees, any relationship or agreement between Greyrock and
Borrower, any actual or alleged failure of Greyrock to comply with any writ of
attachment or other legal process relating to Borrower or any of its property,
or any other matter, cause or thing whatsoever occurred, done, omitted or
suffered to be done by Greyrock relating to Borrower or the Obligations (except
any such amounts sustained or incurred as the result of the gross negligence or
willful misconduct of Greyrock or any of its directors, officers, employees,
agents, attorneys, or any other person
-4-
<PAGE>
Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
affiliated with or representing Greyrock). Notwithstanding any provision in this
Agreement to the contrary, the indemnity agreement set forth in this Section
shall survive any termination of this Agreement and shall for all purposes
continue in full force and effect.
6. TERM.
6.1 Maturity Date. This Agreement shall continue in effect until the maturity
date set forth on the Schedule (the Maturity Date); provided that the Maturity
Date shall automatically be extended, and this Agreement shall automatically and
continuously renew, for successive additional terms of one year each, unless one
party gives written notice to the other, not less than sixty days prior to the
next Maturity Date, that such party elects to terminate this Agreement effective
on the next Maturity Date.
6.2 Early Termination. This Agreement may be terminated prior to the Maturity
Date as follows: (i) by Borrower, effective three business days after written
notice of termination is given to Greyrock; or (ii) by Greyrock at any time
after the occurrence of an Event of Default, without notice, effective
immediately. If this Agreement is terminated by Borrower or by Greyrock under
this Section 6.2, Borrower shall pay to Greyrock a termination fee (the
Termination Fee) in the amount shown on the Schedule. The Termination Fee shall
be due and payable on the effective date of termination and thereafter shall
bear interest at a rate equal to the highest rate applicable to any of the
Obligations.
6.3 Payment of Obligations. On the Maturity Date or on any earlier effective
date of termination, Borrower shall pay and perform in full all Obligations,
whether evidenced by installment notes or otherwise, and whether or not all or
any part of such Obligations are otherwise then due and payable. Without
limiting the generality of the foregoing, if on the Maturity Date, or on any
earlier effective date of termination, there are any outstanding letters of
credit issued based upon an application, guarantee, indemnity or similar
agreement on the part of Greyrock, then on such date Borrower shall provide to
Greyrock cash collateral in an amount equal to 110% of the face amount of all
such letters of credit plus all interest, fees and costs due or (in Greyrock's
estimation) likely to become due in connection therewith, to secure all of the
Obligations relating to said letters of credit, pursuant to Greyrock's then
standard form cash pledge agreement. Notwithstanding any termination of this
Agreement, all of Greyrock's security interests in all of the Collateral and all
of the terms and provisions of this Agreement shall continue in full force and
effect until all Obligations have been paid and performed in full; provided
that, without limiting the fact that Loans are subject to the discretion of
Greyrock, Greyrock may, in its sole discretion, refuse to make any further Loans
after termination. No termination shall in any way affect or impair any right
or remedy of Greyrock, nor shall any such termination relieve Borrower of any
Obligation to Greyrock, until all of the Obligations have been paid and
performed in full*. Upon payment and performance in full of all the Obligations
** and termination of this Agreement, Greyrock shall promptly deliver to
Borrower termination statements, requests for reconveyances and such other
documents as may be reasonably required to terminate Greyrock's security
interests.
*or cash collateral, in the case of letter of credit obligations, is provided
pursuant to the preceding sentence
**(except for contingent obligations to indemnify Greyrock or pay other
unknown amounts in the future)
7. EVENTS OF DEFAULT AND REMEDIES.
7.1 Events of Default. The occurrence of any of the following events shall
constitute an Event of Default under this Agreement, and Borrower shall give
Greyrock immediate written notice thereof: (a) Any warranty, representation,
statement, report or certificate made or delivered to Greyrock by Borrower or
any of Borrower's officers, employees or agents, now or in the future, shall be
untrue or misleading in a material respect; or (b) Borrower shall fail to pay
when due any Loan or any interest thereon or any other monetary Obligation*; or
(c) the total Loans and other Obligations outstanding at any time shall exceed
the Credit Limit; or (d) Borrower shall fail to perform any non-monetary
Obligation which by its nature cannot be cured; or (e) Borrower shall fail to
perform any other non-monetary Obligation, which failure is not cured within **
days after the date performance is due; or (f) any levy, assessment, attachment,
seizure, lien or encumbrance (other than a Permitted Lien) is made on all or any
part of the Collateral which is not cured within 10 days after the occurrence of
the same; or (g) any default or event of default occurs under any obligation
secured by a Permitted Lien, which is not cured within any applicable cure
period or waived in writing by the holder of the Permitted Lien; or (h) Borrower
breaches any material contract or obligation, which has or may reasonably be
expected to have a material adverse effect on Borrower's business or financial
condition; or (i) dissolution, termination of existence, insolvency or business
failure of Borrower or any Guarantor; or appointment of a receiver, trustee or
custodian, for all or any part of the property of, assignment for the benefit of
creditors by, or the commencement of any proceeding by Borrower or any Guarantor
under any reorganization, bankruptcy, insolvency, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, now or in
the future in effect; or (j) the commencement of any proceeding against Borrower
or any Guarantor under any reorganization, bankruptcy, insolvency, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 45 days after the date commenced; or (k) revocation or
termination of, or limitation or denial of liability upon, any guaranty of the
Obligations or any attempt to do any of the foregoing; or (l) revocation or
termination of, or limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset pledged by any
third party to secure any or all of the Obligations, or any attempt to do any of
the foregoing, or commencement of proceedings by or against any such third party
under any bankruptcy or insolvency law; or (m) Borrower makes any payment on
account of any indebtedness or obligation which has been subordinated to the
Obligations other than as permitted in the applicable subordination agreement,
or if any Person who has subordinated such indebtedness or obligations
terminates or in any way limits or terminates its subordination agreement;
-5-
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Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
or (o) Borrower shall generally not pay its debts as they become due, or
Borrower shall conceal, remove or transfer any part of its property, with intent
to hinder, delay or defraud its creditors, or make or suffer any transfer of any
of its property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or (p) there shall be a material adverse change in
Borrower's business or financial condition. Greyrock may cease making any Loans
hereunder during any of the above cure periods, and thereafter if an Event of
Default has occurred.
*within five days of its respective due date
**10
7.2 Remedies. Upon the occurrence and during the continuance of any Event of
Default, and at any time thereafter, Greyrock, at its option, and without notice
or demand of any kind (all of which are hereby expressly waived by Borrower),
may do any one or more of the following: (a) Cease making Loans or otherwise
extending credit to Borrower under this Agreement or any other document or
agreement; (b) Accelerate and declare all or any part of the Obligations to be
immediately due, payable, and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any
Obligation; (c) Take possession of any or all of the Collateral wherever it may
be found, and for that purpose Borrower hereby authorizes Greyrock without
judicial process to enter onto any of Borrower's premises without interference
to search for, take possession of, keep, store, or remove any of the Collateral,
and remain on the premises or cause a custodian to remain on the premises in
exclusive control thereof, without charge for so long as Greyrock deems it
reasonably necessary in order to complete the enforcement of its rights under
this Agreement or any other agreement; provided, however, that should Greyrock
seek to take possession of any of the Collateral by Court process, Borrower
hereby irrevocably waives: (i) any bond and any surety or security relating
thereto required by any statute, court rule or otherwise as an incident to such
possession; (ii) any demand for possession prior to the commencement of any suit
or action to recover possession thereof; and (iii) any requirement that Greyrock
retain possession of, and not dispose of, any such Collateral until after trial
or final judgment; (d) Require Borrower to assemble any or all of the Collateral
and make it available to Greyrock at places designated by Greyrock which are
reasonably convenient to Greyrock and Borrower, and to remove the Collateral to
such locations as Greyrock may deem advisable; (e) Complete the processing,
manufacturing or repair of any Collateral prior to a disposition thereof and,
for such purpose and for the purpose of removal, Greyrock shall have the right
to use Borrower's premises, vehicles, hoists, lifts, cranes, equipment and all
other property without charge; (f) Collect, receive, dispose of and realize upon
any Investment Property, including withdrawal of any and all funds from any
securities accounts; (g) Sell, lease or otherwise dispose of any of the
Collateral, in its condition at the time Greyrock obtains possession of it or
after further manufacturing, processing or repair, at one or more public and/or
private sales, in lots or in bulk, for cash, exchange or other property, or on
credit, and to adjourn any such sale from time to time without notice other than
oral announcement at the time scheduled for sale. Greyrock shall have the right
to conduct such disposition on Borrower's premises without charge, for such time
or times as Greyrock deems reasonable, or on Greyrock's premises, or elsewhere
and the Collateral need not be located at the place of disposition. Greyrock
may directly or through any affiliated company purchase or lease any Collateral
at any such public disposition, and if permissible under applicable law, at any
private disposition. Any sale or other disposition of Collateral shall not
relieve Borrower of any liability Borrower may have if any Collateral is
defective as to title or physical condition or otherwise at the time of sale;
(h) Demand payment of, and collect any Receivables and General Intangibles
comprising Collateral and, in connection therewith, Borrower irrevocably
authorizes Greyrock to endorse or sign Borrower's name on all collections,
receipts, instruments and other documents, to take possession of and open mail
addressed to Borrower and remove therefrom payments made with respect to any
item of the Collateral or proceeds thereof, and, in Greyrock's sole discretion,
to grant extensions of time to pay, compromise claims and settle Receivables,
General Intangibles and the like for less than face value; and (i) Demand and
receive possession of any of Borrower's federal and state income tax returns and
the books and records utilized in the preparation thereof or referring thereto.
Borrower recognizes that Greyrock may be unable to make a public sale of any or
all of the Investment Property, by reasons of prohibitions contained in
applicable securities laws or otherwise, and expressly agrees that a private
sale to a restricted group of purchasers for investment and not with a view to
any distribution thereof shall be considered a commercially reasonable sale.
All reasonable attorneys' fees, expenses, costs, liabilities and obligations
incurred by Greyrock with respect to the foregoing shall be added to and become
part of the Obligations, shall be due on demand, and shall bear interest at a
rate equal to the highest interest rate applicable to any of the Obligations.
7.3 Standards for Determining Commercial Reasonableness. Borrower and
Greyrock agree that a sale or other disposition (collectively, sale) of any
Collateral which complies with the following standards will conclusively be
deemed to be commercially reasonable: (i) Notice of the sale is given to
Borrower at least seven days prior to the sale, and, in the case of a public
sale, notice of the sale is published at least seven days before the sale in a
newspaper of general circulation in the county where the sale is to be
conducted; (ii) Notice of the sale describes the collateral in general, non-
specific terms; (iii) The sale is conducted at a place designated by Greyrock*,
with or without the Collateral being present; (iv) The sale commences at any
time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price in cash
or by cashier's check or wire transfer is required; (vi) With respect to any
sale of any of the Collateral, Greyrock may (but is not obligated to) direct any
prospective purchaser to ascertain directly from Borrower any and all
information concerning the same. Greyrock shall be free to employ other methods
of noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.
*in the State of California
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Greyrock Capital Loan and Security Agreement
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7.4 Power of Attorney. Upon the occurrence and during the continuance of any
Event of Default, without limiting Greyrock's other rights and remedies,
Borrower grants to Greyrock an irrevocable power of attorney coupled with an
interest, authorizing and permitting Greyrock (acting through any of its
employees, attorneys or agents) at any time, at its option, but without
obligation, with or without notice to Borrower, and at Borrower's expense, to do
any or all of the following, in Borrower's name or otherwise, but Greyrock
agrees to exercise the following powers in a commercially reasonable manner:
(a) Execute on behalf of Borrower any documents that Greyrock may, in its sole
discretion, deem advisable in order to perfect and maintain Greyrock's security
interest in the Collateral, or in order to exercise a right of Borrower or
Greyrock, or in order to fully consummate all the transactions contemplated
under this Agreement, and all other present and future agreements; (b) Execute
on behalf of Borrower any document exercising, transferring or assigning any
option to purchase, sell or otherwise dispose of or to lease (as lessor or
lessee) any real or personal property which is part of Greyrock's Collateral or
in which Greyrock has an interest; (c) Execute on behalf of Borrower, any
invoices relating to any Receivable, any draft against any Account Debtor and
any notice to any Account Debtor, any proof of claim in bankruptcy, any Notice
of Lien, claim of mechanic's, materialman's or other lien, or assignment or
satisfaction of mechanic's, materialman's or other lien; (d) Take control in any
manner of any cash or non-cash items of payment or proceeds of Collateral;
endorse the name of Borrower upon any instruments, or documents, evidence of
payment or Collateral that may come into Greyrock's possession; (e) Endorse all
checks and other forms of remittances received by Greyrock; (f) Pay, contest or
settle any lien, charge, encumbrance, security interest and adverse claim in or
to any of the Collateral, or any judgment based thereon, or otherwise take any
action to terminate or discharge the same; (g) Grant extensions of time to pay,
compromise claims and settle Receivables and General Intangibles for less than
face value and execute all releases and other documents in connection therewith;
(h) Pay any sums required on account of Borrower's taxes or to secure the
release of any liens therefor, or both; (i) Settle and adjust, and give releases
of, any insurance claim that relates to any of the Collateral and obtain payment
therefor; (j) Instruct any third party having custody or control of any books or
records belonging to, or relating to, Borrower to give Greyrock the same rights
of access and other rights with respect thereto as Greyrock has under this
Agreement; (k) Execute and deliver to any securities intermediary or other
Person any entitlement order, account control agreement or other notice,
document or instrument with respect to any Investment Property, and (l) Take any
action or pay any sum required of Borrower pursuant to this Agreement and any
other present or future agreements. Any and all reasonable sums paid and any
and all reasonable costs, expenses, liabilities, obligations and reasonable
attorneys' fees incurred by Greyrock with respect to the foregoing shall be
added to and become part of the Obligations, shall be payable on demand, and
shall bear interest at a rate equal to the highest interest rate applicable to
any of the Obligations. In no event shall Greyrock's rights under the foregoing
power of attorney or any of Greyrock's other rights under this Agreement be
deemed to indicate that Greyrock is in control of the business, management or
properties of Borrower.
7.5 Application of Proceeds. All proceeds realized as the result of any sale
or other disposition of the Collateral shall be applied by Greyrock first to the
reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by Greyrock in the exercise of its rights under this Agreement, second
to the interest due upon any of the Obligations, and third to the principal of
the Obligations, in such order as Greyrock shall determine in its sole
discretion. Any surplus shall be paid to Borrower or other persons legally
entitled thereto; Borrower shall remain liable to Greyrock for any deficiency.
If Greyrock, in its sole discretion, directly or indirectly enters into a
deferred payment or other credit transaction with any purchaser at any sale of
Collateral, Greyrock shall have the option, exercisable at any time, in its sole
discretion, of either reducing the Obligations by the principal amount of
purchase price or deferring the reduction of the Obligations until the actual
receipt by Greyrock of the cash therefor.
7.6 Remedies Cumulative. In addition to the rights and remedies set forth in
this Agreement, Greyrock shall have all the other rights and remedies accorded a
secured party under the California Uniform Commercial Code and under all other
applicable laws, and under any other instrument or agreement now or in the
future entered into between Greyrock and Borrower, and all of such rights and
remedies are cumulative and none is exclusive. Exercise or partial exercise by
Greyrock of one or more of its rights or remedies shall not be deemed an
election, nor bar Greyrock from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Greyrock to exercise any
rights or remedies shall not operate as a waiver thereof, but all rights and
remedies shall continue in full force and effect until all of the Obligations
have been fully paid and performed.
8. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
Account Debtor means the obligor on a Receivable.
--------------
Affiliate means, with respect to any Person, a relative, partner, shareholder,
---------
director, officer, or employee of such Person, or any parent or subsidiary of
such Person, or any Person controlling, controlled by or under common control
with such Person.
Agreement and this Agreement means this Loan and Security Agreement and all
--------- --------------
modifications and amendments thereto, extensions thereof, and replacements
therefor.
Business Day means a day on which Greyrock is open for business.
------------
Code means the Uniform Commercial Code as adopted and in effect in the State
----
of California from time to time.
Collateral has the meaning set forth in Section 2.1 above.
----------
Default means any event which with notice or passage of time or both, would
-------
constitute an Event of Default.
Deposit Account has the meaning set forth in Section 9105 of the Code.
---------------
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Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
Equipment means all of Borrower's present and hereafter acquired machinery,
---------
molds, machine tools, motors, furniture, equipment, furnishings, fixtures, trade
fixtures, motor vehicles, tools, parts, dyes, jigs, goods and other tangible
personal property (other than Inventory) of every kind and description used in
Borrower's operations or owned by Borrower and any interest in any of the
foregoing, and all attachments, accessories, accessions, replacements,
substitutions, additions or improvements to any of the foregoing, wherever
located.
Event of Default means any of the events set forth in Section 7.1 of this
----------------
Agreement.
General Intangibles means all general intangibles of Borrower, whether now
-------------------
owned or hereafter created or acquired by Borrower, including, without
limitation, all choses in action, causes of action, corporate or other business
records, Deposit Accounts, inventions, designs, drawings, blueprints, patents,
patent applications, trademarks and the goodwill of the business symbolized
thereby, names, trade names, trade secrets, goodwill, copyrights, registrations,
licenses, franchises, customer lists, security and other deposits, rights in all
litigation presently or hereafter pending for any cause or claim (whether in
contract, tort or otherwise), and all judgments now or hereafter arising
therefrom, all claims of Borrower against Greyrock, rights to purchase or sell
real or personal property, rights as a licensor or licensee of any kind,
royalties, telephone numbers, proprietary information, purchase orders, and all
insurance policies and claims (including life insurance, key man insurance,
credit insurance, liability insurance, property insurance and other insurance),
tax refunds and claims, computer programs, discs, tapes and tape files, claims
under guaranties, security interests or other security held by or granted to
Borrower, all rights to indemnification and all other intangible property of
every kind and nature (other than Receivables).
Guarantor means any Person who has guaranteed any of the Obligations.
---------
Inventory means all of Borrower's now owned and hereafter acquired goods,
---------
merchandise or other personal property, wherever located, to be furnished under
any contract of service or held for sale or lease (including all raw materials,
work in process, finished goods and goods in transit), and all materials and
supplies of every kind, nature and description which are or might be used or
consumed in Borrower's business or used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of such goods, merchandise
or other personal property, and all warehouse receipts, documents of title and
other documents representing any of the foregoing.
Investment Property means any and all investment property of Borrower,
-------------------
including all securities, whether certificated or uncertificated, security
entitlements, securities accounts, commodity contracts and commodity accounts,
and all financial assets held in any securities account or otherwise, wherever
located, and whether now existing or hereafter acquired or arising.
Obligations means all present and future Loans, advances, debts, liabilities,
-----------
obligations, guaranties, covenants, duties and indebtedness at any time owing by
Borrower to Greyrock, whether * this Agreement or any note or other instrument
or document, whether arising from an extension of credit, opening of a letter of
credit, banker's acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect (including, without limitation, those acquired by
assignment and any participation by Greyrock in Borrower's debts owing to
others), absolute or contingent, due or to become due, including, without
limitation, all interest, charges, expenses, fees, attorney's fees, expert
witness fees, audit fees, letter of credit fees, loan fees, termination fees,
minimum interest charges and any other sums chargeable to Borrower under this
Agreement or under any other present or future instrument or agreement between
Borrower and Greyrock.
*arising under
Permitted Liens means the following: (i) purchase money security interests in
---------------
specific items of Equipment; (ii) leases of specific items of Equipment; (iii)
liens for taxes not yet payable; (iv) additional security interests and liens
which are subordinate to the security interest in favor of Greyrock and are
consented to in writing by Greyrock (which consent shall be a matter of
Greyrock's sole discretion); (v) security interests being terminated
substantially concurrently with this Agreement; (vi) liens of materialmen,
mechanics, warehousemen, carriers, or other similar liens arising in the
ordinary course of business and securing obligations which are not delinquent;
(vii) liens incurred in connection with the extension, renewal or refinancing of
the indebtedness secured by liens of the type described above in clauses (i) or
(ii) above, provided that any extension, renewal or replacement lien is limited
to the property encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase; (viii)
Liens in favor of customs and revenue authorities which secure payment of
customs duties in connection with the importation of goods*. Greyrock will have
the right to require, as a condition to its consent under subparagraph (iv)
above, that the holder of the additional security interest or lien sign an
intercreditor agreement on Greyrock's then standard form, acknowledge that the
security interest is subordinate to the security interest in favor of Greyrock,
and agree not to take any action to enforce its subordinate security interest so
long as any Obligations remain outstanding, and that Borrower agree that any
uncured default in any obligation secured by the subordinate security interest
shall also constitute an Event of Default under this Agreement.
*(ix) interests of third parties under non-exclusive licenses granted by
Borrower in the ordinary course of business, (x) Liens created by the Borrower
depositing with one or more issuing banks cash collateral in an amount not to
exceed $4,000,000 at any one time to secure one or more letters of credit, (xi)
statutory landlord liens, provided that there is no default under the lease
giving rise to the lien (taking into account any cure period provided therein)
Person means any individual, sole proprietorship, partnership, joint venture,
------
trust, unincorporated organization, association, corporation, government, or any
agency or political division thereof, or any other entity.
Receivables means all of Borrower's now owned and hereafter acquired accounts
-----------
(whether or not earned by performance), letters of credit, contract rights,
chattel paper, instruments, documents and all other forms of
-8-
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Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
obligations at any time owing to Borrower, all guaranties and other security
therefor, all merchandise returned to or repossessed by Borrower, and all rights
of stoppage in transit and all other rights or remedies of an unpaid vendor,
lienor or secured party.
Other Terms. All accounting terms used in this Agreement, unless otherwise
-----------
indicated, shall have the meanings given to such terms in accordance with
generally accepted accounting principles, consistently applied. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meanings
provided by the Code, to the extent such terms are defined therein.
9.GENERAL PROVISIONS.
9.1 Interest Computation. In computing interest on the Obligations, all
checks, wire transfers and other items of payment received by Greyrock
(including proceeds of Receivables and payment of the Obligations in full) shall
be deemed applied by Greyrock on account of the Obligations three Business Days
after receipt by Greyrock of immediately available funds*. Greyrock shall not,
however, be required to credit Borrower's account for the amount of any item of
payment which is unsatisfactory to Greyrock in its discretion, and Greyrock may
charge Borrower's Loan account for the amount of any item of payment which is
returned to Greyrock unpaid.
*provided that principal payments on the Term Loan shall be applied thereto
on the date of receipt by Greyrock of immediately available funds, if such funds
are received before 10:00 AM Pacific time, or on the next Business Day, if such
funds are received after 10:00 AM Pacific time
9.2 Application of Payments. All payments with respect to the Obligations
may be applied, and in Greyrock's sole discretion reversed and re-applied, to
the Obligations, in such order and manner as Greyrock shall determine in its
sole discretion.
9.3 Charges to Account. Greyrock may, in its discretion, require that
Borrower pay monetary Obligations in cash to Greyrock, or charge them to
Borrower's Loan account, in which event they will bear interest at the same rate
applicable to the Loans.
9.4 Monthly Accountings. Greyrock shall provide Borrower monthly with an
account of advances, charges, expenses and payments made pursuant to this
Agreement. Such account shall be deemed correct, accurate and binding on
Borrower and an account stated (except for reverses and reapplications of
payments made and corrections of errors discovered by Greyrock), unless Borrower
notifies Greyrock in writing to the contrary within sixty days after each
account is rendered, describing the nature of any alleged errors or admissions.
9.5 Notices. All notices to be given under this Agreement shall be in
writing and shall be given either personally or by reputable private delivery
service or by regular first-class mail, or certified mail return receipt
requested, or by fax, addressed to Greyrock or Borrower at the addresses shown
in the heading to this Agreement, or at any other address designated in writing
by one party to the other party. All notices shall be deemed to have been given
upon delivery in the case of notices personally delivered, or at the expiration
of one Business Day following delivery to the private delivery service, or two
business days following the deposit thereof in the United States mail, with
postage prepaid, or on transmission and receipt thereof in the case of notices
given by fax.
9.6 Severability. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.
9.7 Integration. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and compl ete agreement between Borrower and Greyrock and
supersede all prior and contemporaneous negotiations and oral representations
and agreements, all of which are merged and integrated in this Agreement. There
-----
are no oral understandings, representations or agreements between the parties
- -----------------------------------------------------------------------------
which are not set forth in this Agreement or in other written agreements signed
- -------------------------------------------------------------------------------
by the parties in connection herewith.
- -------------------------------------
9.8 Waivers. The failure of Greyrock at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other present or future agreement between Borrower and Greyrock shall not waive
or diminish any right of Greyrock later to demand and receive strict compliance
therewith. Any waiver of any default shall not waive or affect any other
default, whether prior or subsequent, and whether or not similar. None of the
provisions of this Agreement or any other agreement now or in the future
executed by Borrower and delivered to Greyrock shall be deemed to have been
waived by any act or knowledge of Greyrock or its agents or employees, but only
by a specific written waiver signed by an authorized officer of Greyrock and
delivered to Borrower. Borrower waives demand, protest, notice of protest and
notice of default or dishonor, notice of payment and nonpayment, release,
compromise, settlement, extension or renewal of any commercial paper,
instrument, account, General Intangible, document or guaranty at any time held
by Greyrock on which Borrower is or may in any way be liable, and notice of any
action taken by Greyrock, unless expressly required by this Agreement.
9.9 Amendment. The terms and provisions of this Agreement may not be waived
or amended, except in a writing executed by Borrower and a duly authorized
officer of Greyrock.
9.10 Time of Essence. Time is of the essence in the performance by Borrower
of each and every obligation under this Agreement.
9.11 Attorneys Fees and Costs. Borrower shall reimburse Greyrock for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by Greyrock, pursuant to,
or in connection with, or relating to this Agreement (whether or not a lawsuit
is filed), including, but not limited to, any reasonable attorneys' fees and
costs Greyrock incurs in order to do the following: prepare and negotiate this
Agreement and the documents relating to this Agreement; obtain legal advice in
connection with this Agreement or Borrower; enforce, or seek to enforce, any of
its rights; prosecute actions against, or defend actions by, Account Debtors;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or
-9-
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Greyrock Capital Loan and Security Agreement
- --------------------------------------------------------------------------------
prosecute any probate claim, bankruptcy claim, third-party claim, or other
claim; examine, audit, copy, and inspect any of the Collateral or any of
Borrower's books and records; protect, obtain possession of, lease, dispose of,
or otherwise enforce Greyrock's security interest in, the Collateral; and
otherwise represent Greyrock in any litigation relating to Borrower. If either
Greyrock or Borrower files any lawsuit against the other predicated on a breach
of this Agreement, the prevailing party in such action shall be entitled to
recover its reasonable costs and attorneys' fees, including (but not limited to)
reasonable attorneys' fees and costs incurred in the enforcement of, execution
upon or defense of any order, decree, award or judgment. All attorneys' fees and
costs to which Greyrock may be entitled pursuant to this Paragraph shall
immediately become part of Borrower's Obligations, shall be due on demand, and
shall bear interest at a rate equal to the highest interest rate applicable to
any of the Obligations.
9.12 Benefit of Agreement. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of Borrower and Greyrock; provided, however,
that Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of Greyrock, and any prohibited assignment
shall be void. No consent by Greyrock to any assignment shall release Borrower
from its liability for the Obligations.
9.13 Joint and Several Liability. If Borrower consists of more than one
Person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.
9.14 Limitation of Actions. Any claim or cause of action by Borrower against
Greyrock, its directors, officers, employees, agents, accountants or attorneys,
based upon, arising from, or relating to this Loan Agreement, or any other
present or future document or agreement, or any other transaction contemplated
hereby or thereby or relating hereto or thereto, or any other matter, cause or
thing whatsoever, occurred, done, omitted or suffered to be done by Greyrock,
its directors, officers, employees, agents, accountants or attorneys*, shall be
barred unless asserted by Borrower by the commencement of an action or
proceeding in a court of competent jurisdiction by the filing of a complaint
within one year after the first act, occurrence or omission upon which such
claim or cause of action, or any part thereof, is based, and the service of a
summons and complaint on an officer of Greyrock, or on any other person
authorized to accept service on behalf of Greyrock, within thirty (30) days
thereafter. Borrower agrees that such one-year period is a reasonable and
sufficient time for Borrower to investigate and act upon any such claim or cause
of action. The one-year period provided herein shall not be waived, tolled, or
extended except by the written consent of Greyrock in its sole discretion. This
provision shall survive any termination of this Loan Agreement or any other
present or future agreement.
*in connection herewith or therewith
9.15 Paragraph Headings; Construction. Paragraph headings are only used in
this Agreement for convenience. Borrower and Greyrock acknowledge that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. The term
"including", whenever used in this Agreement, shall mean "including (but not
limited to)". This Agreement has been fully reviewed and negotiated between the
parties and no uncertainty or ambiguity in any term or provision of this
Agreement shall be construed strictly against Greyrock or Borrower under any
rule of construction or otherwise.
9.16 Governing Law; Jurisdiction; Venue. This Agreement and all acts and
transactions hereunder and all rights and obligations of Greyrock and Borrower
shall be governed by the laws of the State of California. As a material part of
the consideration to Greyrock to enter into this Agreement, Borrower (i) agrees
that all actions and proceedings relating directly or indirectly to this
Agreement shall, at Greyrock's option, be litigated in courts located within
California, and that the exclusive venue therefor shall be Los Angeles County;
(ii) consents to the jurisdiction and venue of any such court and consents to
service of process in any such action or proceeding by personal delivery or any
other method permitted by law; and (iii) waives any and all rights Borrower may
have to object to the jurisdiction of any such court, or to transfer or change
the venue of any such action or proceeding.
9.17 Mutual Waiver of Jury Trial. BORROWER AND GREYROCK EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN GREYROCK AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF GREYROCK OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH GREYROCK OR
BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE.
Borrower:
P-COM, INC.
By /s/ Robert E. Collins
-------------------------------
Vice President
Greyrock:
GREYROCK CAPITAL,
a Division of Banc of America Commercial
Finance Corporation
By /s/ Lisa Nagano
--------------------------------
Title Senior Vice President
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Version -2
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[LOGO OF GREYROCK CAPITAL]
Schedule to
Loan and Security Agreement
Borrower: P-Com, Inc.
Address: 3175 S. Winchester Blvd.
Campbell, California 95008
Date: January 14, 2000
This Schedule is an integral part of the Loan and Security Agreement between
Greyrock Capital, a Division of Banc of America Commercial Finance Corporation
(Greyrock) and the above-borrower (Borrower) of even date.
================================================================================
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed $12,000,000 at any one time
outstanding.
The Loans will initially be made as a term loan (the
"Term Loan"), in one disbursement. The principal amount
of the Term Loan will be payable on termination of this
Agreement, except as otherwise provided herein. The
Term Loan may be pre-paid, in whole or in part, without
premium or penalty; provided that if the Term Loan is
pre-paid in whole or in part prior to the exercise of
the Greyrock Option provided for in Section 7(c) below,
then Greyrock may retain the Warrants, regardless of
which Greyrock Option is selected.
Amounts of the Term Loan that are prepaid may not be
reborrowed.
The Term Loan may be converted to a revolving
Receivable Facility as provided in Section 7(c) below.
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2. INTEREST.
Interest Rate (Section 1.2):
A rate equal to the "Prime Rate" plus 2% per annum,
calculated on the basis of a 360-day year for the
actual number of days elapsed, provided that the
interest rate in effect in each month shall not be less
than 8% per annum, regardless of the amount of the
Obligations outstanding. The interest rate applicable
to all Loans shall be adjusted monthly as of the first
day of each month, and the interest to be charged for
each month shall be based on the highest "Prime Rate"
in effect during said month. "Prime Rate" means the
announced "Prime
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Greyrock Capital Schedule to Loan and Security Agreement
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Rate" or the substitute therefor of the Bank of America
N.A. (or its successor) whether or not that rate is the
lowest interest rate charged by said bank. If the Prime
Rate, as defined, is unavailable, "Prime Rate" shall
mean the highest of the prime rates published in the
Wall Street Journal on the first business day of the
month, as the base rate on corporate loans at large
U.S. money center commercial banks.
================================================================================
3. FEES (Section 1.3/Section 6.2):
Loan Fee: $120,000, payable concurrently herewith.
Termination Fee: None.
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
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4. MATURITY DATE
(Section 6.1): January 31, 2001, subject to automatic renewal as
provided in Section 6.1 above, and early termination as
provided in Section 6.2 above.
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5. REPORTING.
(Section 5.2):
Borrower shall provide Greyrock with the following:
1. Annual financial statements, as soon as available,
and in any event within 90 days following the end
of Borrower's fiscal year, certified by independent
certified public accountants acceptable to
Greyrock.
2. Quarterly unaudited financial statements, as soon
as available, and in any event within 45 days after
the end of each fiscal quarter of Borrower.
3. Monthly unaudited financial statements, as soon as
available, and in any event within 30 days after
the end of each month.
================================================================================
6. BORROWER INFORMATION:
Prior Names of
Borrower
(Section 3.2): None
Prior Trade
Names of Borrower
(Section 3.2): None
Existing Trade
Names of Borrower
(Section 3.2): None
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Greyrock Capital Schedule to Loan and Security Agreement
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Other Locations and
Addresses (Section 3.3): See Exhibit A hereto
Material Adverse
Litigation (Section 3.10): None
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7. ADDITIONAL PROVISIONS:
(a) Conditions. The making of the initial Loan and subsequent Loans
hereunder is subject to the following additional conditions precedent:
(1) Additional Equity Investment Borrower shall have received
$43,000,000 in cash proceeds from the issuance by Borrower of its
equity securities, within two Business Days after the date hereof
and concurrently with or prior to the initial Loan hereunder, and
Borrower shall provide evidence of the same to Greyrock,
reasonably satisfactory to Greyrock.
(2) Cash Collateral. Borrower shall provide to Greyrock cash
collateral in the amount of $6,000,000 (the "Cash Collateral")
which shall constitute "Collateral" for all purposes of this
Agreement. The Cash Collateral may, in the discretion of
Greyrock, be provided by Greyrock withholding said sum from the
proceeds of the Loans made pursuant hereto. The Cash Collateral
need not be maintained in a separate account. The Cash Collateral
shall bear interest at a rate equal to the Prime Rate minus 3%
per annum, computed on the basis of a 360-day year. Provided no
Event of Default or event which with notice or lapse of time
would constitute an Event of Default has occurred and is
continuing, accrued interest on the Cash Collateral shall be paid
to Borrower monthly, or, in the discretion of Greyrock, applied
to the outstanding Loans and other Obligations.
(b) Warrants. The Borrower shall provide Greyrock with three-year warrants
to purchase 200,000 shares of common stock of the Borrower, on the
terms set forth in the Warrant to Purchase Stock and related documents
being executed concurrently with this Agreement, at $5.71 per share
(the "Warrants"). The Warrants shall contain such terms and provisions
as Borrower and Greyrock shall agree, and the Warrant shall be issued
in the form of two separate Warrants, one issued to Greyrock with
respect to 120,000 shares, and one issued to Greyrock's participant,
Silicon Valley Bank ("Silicon"), with respect to the remaining 80,000
shares.. In addition, concurrently, Borrower and Greyrock and Silicon
Valley Bank shall enter into an Anti-Dilution Agreement and
Registration Rights Agreement in such form as Borrower and Greyrock
shall agree. The Warrants shall be deemed fully earned on the date
hereof, shall be in addition to all interest and other fees, and shall
be non-refundable, except as provided in Section 7(c) below, provided
that, in the event this Agreement is terminated for any reason prior
to the exercise of the Greyrock Option, Greyrock and Silicon shall
have the right to retain the Warrants. Greyrock represents that it is
acquiring the Warrant for its own account and not with a view to the
distribution thereof. Greyrock further represents that it is an
accredited investor within the meaning of Rule 501(a) promulgated
under the Securities Act of 1933 (the "Securities Act"). Greyrock
understands that the Warrant has not been registered under the
Securities Act or any state securities laws. Greyrock understands
further that the Warrant will be acquired for investment and may not
be sold, pledged or otherwise transferred without an effective
registration statement thereof under the Securities Act and any
applicable state securities laws or pursuant to Rule 144 or an opinion
of counsel reasonably satisfactory to the Company and its counsel that
such registration is not required.
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Greyrock Capital Schedule to Loan and Security Agreement
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(c) Option to Convert to Receivable Facility.
(1) Initial Review. During the 60-day period commencing on the
date hereof, Greyrock shall have the right to complete its
audits and investigations with respect to the Borrower and
its business, in order to enable Greyrock to decide whether
to convert the Loan facility to a Receivable Facility as
provided below. The Borrower shall cooperate in said audits
and investigations and shall provide such information and
documentation in connection therewith as Greyrock shall
reasonably request.
(2) Option to Convert to Receivable Facility. Within 60 days
after the date hereof, Greyrock shall have the option (the
"Greyrock Option") of doing either of the following: (i)
releasing the Cash Collateral to Borrower and converting the
Loans to an account receivable loan facility (the
"Receivable Facility") as provided below (the "Receivable
Facility Option"); or (ii) retaining the Cash Collateral as
Collateral and releasing its and Silicon's interest in the
Warrants (the "Warrant Release Option"). Greyrock shall
exercise said option by giving written notice to the
Borrower within said 60-day period as to whether Greyrock
elects the Receivable Facility Option or the Warrant Release
Option. If Greyrock fails to give such written notice,
Greyrock shall be deemed to have exercised the Warrant
Release Option. The date on which Greyrock gives written
notice to Borrower as to which option it selects is referred
to herein as the Option Effective Date.
(3) Warrant Release Option. If Greyrock elects the Warrant
Release Option, Greyrock shall, upon written request of
Borrower, execute and deliver, and cause Silicon to execute
and deliver, such documents as Borrower shall reasonably
specify in order to release their interest in the Warrants.
(4) Receivable Facility Option. If Greyrock elects the
Receivable Facility Option, then the following shall occur:
(A) Release of Cash Collateral. Greyrock shall, within said
60-day period, release the Cash Collateral by wiring
the same to such account as the Borrower shall specify
in written instructions to Greyrock.
(B) Credit Limit. Effective on the Option Effective Date,
the Credit Limit shall be modified to be the following:
The lesser of (i) $12,000,000 or (ii) 85% of the amount
of Borrower's Eligible Receivables (as defined in
Exhibit A hereto). In the event, on the Option
Effective Date, the total Obligations exceed the Credit
Limit, Borrower shall pay the excess to Greyrock
immediately, without notice or demand, and without
limiting the foregoing, Greyrock may, in its discretion
apply the Cash Collateral to any such excess and
release the remaining Cash Collateral to Borrower as
provided in Section 7(c)(4)(A) above.
(C) Receivable Provisions. Effective on the Option
Effective Date and thereafter, the provisions of
Exhibit A hereto shall be effective.
(5) Legal Opinion Post-Closing. Within 20 days after the date
hereof, Borrower shall provide to Greyrock an opinion of
Borrower's counsel with respect to the due execution and
delivery of this Agreement and the
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Greyrock Capital Schedule to Loan and Security Agreement
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related documents and agreements, the due incorporation,
valid existence and good-standing of Borrower, its corporate
power and authority to enter into and perform its
obligations under this Agreement and the related documents
and agreements, and such other matters as Greyrock shall
reasonably request.
(6) Subsidiary Guarantees Post-Closing. Within 60 days after the
date hereof (and in any event if Greyrock exercises the
Receivable Facility Option, within 10 days after the Option
Effective Date), Borrower shall cause each of its U.S.
subsidiaries to execute and deliver to Greyrock (i)
Continuing Guarantees with respect to the Obligations, on
Greyrock's standard form, (ii) Security Agreements granting
Greyrock a first-priority security interest in all of their
assets (subject to "Permitted Liens" defined in the same
manner as under this Agreement), on substantially the same
terms as the provisions of this Agreement, (iii) all such
documents relating thereto as Greyrock shall reasonably
request, including without limitation UCC-1 financing
statements, intellectual property filings, and certified
resolutions.
(7) Other Provisions Not Limited. Nothing in this Section 7 or
in the other provisions of this Schedule is intended to
limit in any way any of the other provisions of this
Agreement.
Borrower: Greyrock:
P-COM, INC. GREYROCK CAPITAL,
a Division of Banc of America Commercial
Corporation
By Robert E. Collins
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Vice President By Lisa Nagano
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Title Senior Vice President
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Version-2
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<PAGE>
Exhibit A to Loan and Security Agreement
Receivable Facility Provisions
1. RECEIVABLES.
1.1 Representations Relating to Receivables. Borrower represents and
warrants to Greyrock as follows: Each Eligible Receivable shall, on the date
each Loan is requested and made, represent an undisputed, bona fide, existing,
unconditional obligation of the Account Debtor on such Receivable created by the
sale, delivery, and acceptance of goods or the rendition of services, in the
ordinary course of Borrower's business.
1.2 Representations Relating to Documents and Legal Compliance. Borrower
represents and warrants to Greyrock as follows: All statements made and all
unpaid balances appearing in all invoices, instruments and other documents
evidencing the Eligible Receivables are and shall be true and correct and all
such invoices, instruments and other documents and all of Borrower's books and
records are and shall be genuine and in all respects what they purport to be,
and all signatories and endorsers have the capacity to contract. All sales and
other transactions underlying or giving rise to each Eligible Receivable shall
comply with all applicable laws and governmental rules and regulations in all
material respects. All signatures and indorsements on all documents,
instruments, and agreements relating to all Eligible Receivables are and shall
be genuine, and all such documents, instruments and agreements are and shall be
legally enforceable in accordance with their terms.
1.3 Schedules and Documents relating to Receivables. Borrower shall deliver
to Greyrock transaction reports and loan requests, schedules and assignments of
all Receivables, and schedules of collections, all on Greyrock's standard forms;
provided, however, that Borrower's failure to execute and deliver the same shall
not affect or limit Greyrock's security interest and other rights in all of
Borrower's Receivables, nor shall Greyrock's failure to advance or lend against
a specific Receivable affect or limit Greyrock's security interest and other
rights therein. Together with each such schedule and assignment, or later if
requested by Greyrock, Borrower shall furnish Greyrock with copies (or, at
Greyrock's request, originals) of all contracts, orders, invoices, and other
similar documents, and all original shipping instructions, delivery receipts,
bills of lading, and other evidence of delivery, for any goods the sale or
disposition of which gave rise to such Receivables, and Borrower warrants the
genuineness of all of the foregoing. Borrower shall also furnish to Greyrock an
aged accounts receivable trial balance in such form and at such intervals as
Greyrock shall reasonably request. In addition, Borrower shall deliver to
Greyrock the originals of all instruments, chattel paper, security agreements,
guarantees and other documents and property evidencing or securing any
Receivables, immediately upon receipt thereof and in the same form as received,
with all necessary indorsements.
1.4 Collection of Receivables. Borrower shall have the right to collect all
Receivables, unless and until a Default or an Event of Default has occurred.
Borrower shall hold all payments on, and proceeds of, Receivables in trust for
Greyrock, and Borrower shall deliver all such payments and proceeds to Greyrock,
within one Business Day after receipt of the same, in their original form, duly
endorsed, to be applied to the Obligations in such order as Greyrock shall
determine.
1.5 Disputes. Borrower shall notify Greyrock promptly of all disputes or
claims relating to Eligible Receivables on the regular reports to Greyrock.
Borrower shall not forgive, or settle any Receivable for less than payment in
full, or agree to do any of the foregoing, except that Borrower may do so,
provided that: (i) Borrower does so in good faith, in a commercially reasonable
manner, in the ordinary course of business, and in arm's length transactions,
which are reported to Greyrock on the regular reports provided to Greyrock; (ii)
no Default or Event of Default has occurred and is continuing; and (iii) taking
into account all such settlements and forgiveness, the total outstanding Loans
and other Obligations will not exceed the Credit Limit.
1.6 Verification. Greyrock may, from time to time, at reasonable times and
in a reasonable manner, verify directly with the respective Account Debtors the
validity, amount and other matters relating to the Receivables, by means of
mail, telephone or otherwise, either in the name of Borrower or Greyrock or such
other name as Greyrock may choose, and Greyrock or its designee may, at any
time, notify Account Debtors that it has a security interest in the Receivables.
Exhibit A- Page 1
<PAGE>
1.7 No Liability. Greyrock shall not under any circumstances be responsible
or liable for any shortage or discrepancy in, damage to, or loss or destruction
of, any goods, the sale or other disposition of which gives rise to a
Receivable, or for any error, act, omission, or delay of any kind occurring in
the settlement, failure to settle, collection or failure to collect any
Receivable, or for settling any Receivable in good faith for less than the full
amount thereof, nor shall Greyrock be deemed to be responsible for any of
Borrower's obligations under any contract or agreement giving rise to a
Receivable. Nothing herein shall, however, relieve Greyrock from liability for
its own gross negligence or willful misconduct.
1.8 Definition. As used in this Agreement, "Eligible Receivables" means
unconditional Receivables arising in the ordinary course of Borrower's business
from the completed sale of goods or rendition of services, which Greyrock, in
its good-faith business judgment, shall deem eligible for borrowing, based on
such considerations as Greyrock may from time to time deem appropriate, notice
of which Greyrock shall give to Borrower.
1.9 Reporting. In addition to the reports provided elsewhere in this
Agreement, Borrower shall provide to Greyrock the following: (i) Monthly
Receivable agings, aged by invoice date, within 10 Business Days after the end
of each month, and (ii) Monthly accounts payable agings, aged by invoice date,
and outstanding or held check registers within 10 Business Days after the end of
each month.
Exhibit A - Page 2
<PAGE>
EXHIBIT 10.62
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
_________________________
WARRANT TO PURCHASE STOCK
Warrant to Purchase 120,000 Issue Date: January 14, 2000
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Shares of the Common Expiration Date: January 31, 2005
Stock of P-Com, Inc. Initial Exercise Price: $5.71 per share
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other
good and valuable consideration, GREYROCK CAPITAL, a Division of Banc of America
Commercial Finance Corporation ("Holder") is entitled to purchase the number of
fully paid and non-assessable shares of the class of securities (the "Shares")
of the corporation (the "Company") at the initial exercise price per Share (the
"Warrant Price") all as set forth above and as adjusted pursuant to Article 2 of
this Warrant, subject to the provisions and upon the terms and conditions set
forth in this Warrant.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company. Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall be
determined pursuant Section 1.4.
1.3 [Reserved]
1.4 Fair Market Value. If the Shares are traded in a public market, the
fair market value of the Shares shall be mean average closing price of the
Shares (or the closing price of the Company's stock into which the Shares are
convertible) reported with respect to the ten business days immediately before
Holder delivers its Notice of Exercise to the Company. If the Shares are not
traded in a public market, the Board of Directors of the Company shall determine
fair market value in its reasonable good faith judgment. The foregoing
notwithstanding, if Holder advises the Board of Directors in writing that Holder
disagrees with such determination, then the Company and Holder shall promptly
agree upon a reputable investment banking firm to undertake such valuation. If
the valuation of such investment banking firm is greater than that determined by
the Board of Directors, then all fees and expenses of such investment banking
firm shall be paid by the Company. In all other circumstances, such fees and
expenses shall be paid by Holder.
1.5 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.6 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.7 Repurchase on Sale, Merger or Consolidation of the Company.
1.7.1. "Acquisition". For the purpose of this Warrant, "Acquisition"
means any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.
1.7.2. Assumption of Warrant. If upon the closing of any Acquisition the
successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
1.7.3. Nonassumption. If upon the closing of any Acquisition the
successor entity does not assume the obligations of this Warrant and Holder has
not otherwise exercised this Warrant in full, then the unexercised portion of
this Warrant shall be deemed to have been automatically converted pursuant to
Section 1.2 and thereafter Holder shall participate in the acquisition on the
same terms as other holders of the same class of securities of the Company.
1.7.4. [Reserved]
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Warrant to Purchase Stock
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ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any
reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable upon exercise or
conversion of this Warrant, Holder shall be entitled to receive, upon exercise
or conversion of this Warrant, the number and kind of securities and property
that Holder would have received for the Shares if this Warrant had been
exercised immediately before such reclassification, exchange, substitution, or
other event. Such an event shall include any automatic conversion of the
outstanding or issuable securities of the Company of the same class or series as
the Shares to common stock pursuant to the terms of the Company's Articles of
Incorporation upon the closing of a registered public offering of the Company's
common stock. The Company or its successor shall promptly issue to Holder a new
Warrant for such new securities or other property. The new Warrant shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Section 2.2
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
2.4 Adjustments for Diluting Issuances. The Warrant Price and the number
of Shares issuable upon exercise of this Warrant or, if the Shares are Preferred
Stock, the number of shares of common stock issuable upon conversion of the
Shares, shall be subject to adjustment, from time to time in the manner set
forth on Exhibit A in the event of diluting issuances.
2.5 No Impairment. The Company shall not, by amendment of its Certificate
of Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Article 2 and
in taking all such action as may be reasonably necessary or appropriate to
protect Holder's rights under this Article against impairment. If the Company
takes any action affecting the Shares or its common stock other than as
described above that adversely affects Holder's rights under this Warrant, the
Warrant Price shall be adjusted downward and the number of Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Warrant Price of this Warrant is unchanged.
2.6 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder amount computed by
multiplying the fractional interest by the fair market value of a full Share.
2.7 Certificate as to Adjustments. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this
Warrant is not greater than the fair market value of the Shares as of the date
of this Warrant.
(b) All Shares which may be issued upon the exercise of the purchase
right represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 Notice of Certain Events. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of its common stock any
additional shares of stock of any class or series or other rights; (c) to effect
any reclassification or recapitalization of common stock; (d) to merge or
consolidate with or into any other corporation, or sell, lease, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up; or (e) offer holders of registration rights the opportunity to participate
in an underwritten public offering of the company's common stock for cash, then,
in connection with each such event, the Company shall give Holder (1) at least
20 days prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on
which the holders of common stock will be entitled thereto) or for determining
rights to vote, if any, in respect of the matters referred to in (c) and (d)
above; (2) in the case of the matters referred to in (c) and (d) above at least
20 days prior written notice of the date when the same will take place (and
specifying the date on which the holders of common stock will be entitled to
exchange their common stock for securities or other
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Warrant to Purchase Stock
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property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant and/or
any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of recognized standing and
(c) within forty-five (45) days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
3.4 Registration Under Securities Act of 1933, as amended. The Company
agrees that the Shares or, if the Shares are convertible into common stock of
the Company, such common stock, shall be subject to the registration rights set
forth on Exhibit B, if attached.
ARTICLE 4. MISCELLANEOUS.
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4.1 Term: Notice of Expiration. This Warrant is exercisable, in whole or
in part, at any time and from time to time on or before the Expiration Date set
forth above.
4.2 Legends. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, if reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holders notice of
proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.2 and 4.3,
Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) by giving the Company notice of the
portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).
Subject to the following proviso, the Holder shall have no right to transfer to
any Person or exercise all or any part of this Warrant at any time prior to the
exercise (if any) of the Receivables Facility Option (as defined in the Loan and
Security Agreement dated January 14, 2000 between the Company and Greyrock
Capital, a Division of Banc of America Commercial Finance Corporation (as
amended from time to time referred to herein as the "Loan Agreement"), provided
--------
that the above restrictions regarding the transfer and exercise of this Warrant
shall no longer be effective if the Loan Agreement is terminated prior to the
exercise of the Greyrock Option (as defined in the Loan Agreement). Further,
unless the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company.
4.4A Holder Agreements. The Holder, by its acceptance hereof, represents
and agrees as follows:
(1) Holder represents that it is acquiring this Warrant for its own
account and not with a view to the distribution thereof. Holder further
represents that it is an accredited investor within the meaning of Rule 501(a)
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
(2) Holder understands that the Warrant has not been registered under the
Securities Act or any state securities laws. Holder understands further that the
Warrant will be acquired for investment and may not be sold, pledged or
otherwise transferred without an effective registration statement thereof under
the Securities Act and any applicable state securities laws or pursuant to Rule
144 or an opinion of counsel reasonably satisfactory to the Company and its
counsel that such registration is not required.
(3) Holder agrees that Holder's rights in this Warrant are subject to
being released as provided in Section 7(c) of the Schedule to the Loan
Agreement.
4.5 Notices. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
-3-
<PAGE>
Warrant to Purchase Stock
-----------------------------------------------------------------------------
4.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
P-COM, INC.
By /s/ Karl F. Meyer
---------------------------------------
Vice President, Corporate Controller
-4-
<PAGE>
Warrant to Purchase Stock
------------------------------------------------------------------------------
APPENDIX 1
NOTICE OF EXERCISE
- ------------------
1. The undersigned hereby elects to purchase ____________ shares of the
Common/Series ____ Preferred [strike one] Stock of __________ pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to _______ of the Shares covered by the
Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in the
name of the undersigned or in such other name as is specified below:
__________________________
(NAME)
__________________________
__________________________
(ADDRESS)
3. The undersigned represents it is acquiring the shares solely for its own
account and not as a nominee for any other party and not with a view toward the
resale or distribution thereof except in compliance with applicable securities
laws.
_____________________________________
(Signature)
_____________________________________
(Date)
-5-
<PAGE>
Warrant to Purchase Stock
-----------------------------------------------------------------------------
EXHIBIT A
ANTI-DILUTION PROVISIONS
Per Anti-Dilution Agreement of even date.
-6-
<PAGE>
Warrant to Purchase Stock
-------------------------------------------------------------------------------
EXHIBIT B
REGISTRATION RIGHTS
Per Registration Rights Agreement of even date.
-7-
<PAGE>
EXHIBIT 10.63
[LOGO OF GREYROCK CAPITAL]
Registration Rights Agreement
Issuer: P-COM, INC.
Address: 3175 S. Winchester Blvd.
Campbell, California 95008
Date: January 14, 2000
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the above date by and
between GREYROCK CAPITAL, a Division of Banc of America Commercial Finance
Corporation ("Purchaser"), whose address is 10880 Wilshire Blvd. Suite 1850, Los
Angeles, CA 90024 and the above Company, whose address is set forth above.
RECITALS
A. Concurrently with the execution of this Agreement, the Purchaser is
purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant
to which Purchaser has the right to acquire from the Company the Shares (as
defined in the Warrant).
B. By this Agreement, the Purchaser and the Company desire to set forth the
registration rights of the Shares all as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares (if Common Stock)
or all shares of Common Stock of the Company issuable or issued upon conversion
of the Shares and (ii) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, any stock referred to in (i).
(c) The terms "Holder" or "Holders" means the Purchaser or qualifying
transferees under subsection 1.8 hereof who hold Registrable Securities.
(d) The term "SEC" means the Securities and Exchange Commission.
1.2 Company Registration.
(a) Registration. If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its shareholders, other than with regard to resale registration
statements for the former holders of Series B Preferred Stock of the Company and
other than a registration on Form S-1 or S-8 relating solely to employee stock
option or purchase plans, or a registration on Form S-4 relating solely to an
SEC Rule 145 transaction, or a registration on any other form (other than Form
S-1, S-2, S-3 or S-18, or their successor forms) or any successor to such forms,
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of Registrable
Securities, the Company will:
(i) promptly give to each Holder written notice thereof (which shall include
a list of the jurisdictions in which the Company intends to attempt to qualify
such securities under the applicable blue sky or other state securities laws);
and
(ii) include in such registration (and compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 30 days after receipt of such written notice from the
<PAGE>
Greyrock Capital Registration Rights Agreement
- --------------------------------------------------------------------------------
Company, by any Holder or Holders, except as set forth in subsection 1.2(b)
below.
(b) Underwriting. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to subsection
1.2(a)(i). In such event the right of any Holder to registration pursuant to
this subsection 1.2 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other shareholders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 1.2(b), if the underwriter
determines that marketing factors require a limitation on the number of shares
to be underwritten, the underwriter may (subject to the allocation priority set
forth below) exclude from such registration and underwriting some or all of the
Registrable Securities which would otherwise be underwritten pursuant hereto.
The Company shall so advise all Holders of securities requesting registration,
and the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following manner. The
number of shares that may be included in the registration and underwriting on
behalf of the Purchaser, directors and officers and other Holders shall be
allocated among the Purchaser, directors and officers and other Holders in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities and other securities which they had requested to be included in such
registration at the time of filing the registration statement.
1.3 Expenses of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 1 including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne by
the Company except the Company shall not be required to pay underwriters' fees,
discounts or commissions relating to Registrable Securities or any fees and
disbursements of counsel for any Holder. All other expenses of any registered
offering not otherwise borne by the Company shall be borne pro rata among the
Holders participating in the offering and the Company.
1.4 Registration Procedures. In the case of each registration, qualification
or compliance effected by the Company pursuant to this Registration Rights
Agreement, the Company will keep each Holder participating therein advised in
writing as to the initiation of each registration, qualification and compliance
and as to the completion thereof. Except as otherwise provided in subsection
1.3, at its expense the Company will:
(a) Should a registration statement with respect to such Registrable
Securities become effective, upon the request of the Holders of a majority of
the Registrable Securities registered thereunder, keep such registration
statement effective for up to 120 days.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
states as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states.
(e) In the event of any underwritten public offering, enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
with the managing underwriter of such offering. Each Holder participating in
such underwriting shall also enter into and perform its obligations under such
an agreement.
(f) Notify each Holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act or the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing. Upon such
notification, the Holders agree to cease immediately selling Registrable
Securities until the Company has provided a supplemental prospectus to the
Holders.
1.5 Indemnification.
(a) The Company will indemnify each Holder of Registrable Securities and each
of its officers, directors and partners, and each person controlling such
Holder, with respect to which such registration, qualification or compliance has
been effected pursuant to this Rights Agreement, and each underwriter, if any,
and each person who controls any underwriter of the Registrable Securities held
by or issuable to such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Securities Exchange
Act of 1934, as amended ("Exchange Act"), or any state securities law applicable
to the Company or any rule or regulation promulgated under the
<PAGE>
Greyrock Capital Registration Rights Agreement
- --------------------------------------------------------------------------------
Securities Act, the Exchange Act or any such state law and relating to action or
inaction required of the Company in connection with any such registration,
qualification of compliance, and will reimburse each such Holder, each of its
officers, directors and partners, and each person controlling such Holder, each
such underwriter and each person who controls any such underwriter, within a
reasonable amount of time after incurred for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.5(a) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld); and provided further, that the Company will
not be liable in any such case to the extent that any such claim, loss, damage
or liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by such Holder specifically
for use therein.
(b) Each Holder will, if Registrable Securities held by or issuable to such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, expenses, damages and liabilities (or
actions in respect thereof) arising out of or based on any (i) sales not using
the official prospectus or using representations not in the official prospectus
or (ii) untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, partners, persons or underwriters for any reasonable legal
or any other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity agreement
contained in this subsection 1.5(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld); and provided further, that the total amount for
which any Holder shall be liable under this subsection 1.5(b) shall not in any
event exceed the aggregate proceeds received by such Holder from the sale of
Registrable Securities held by such Holder in such registration.
(c) Each party entitled to indemnification under this subsection 1.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense; and provided further, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in prejudice to the
Indemnifying Party; and provided further, that an Indemnified Party (together
with all other Indemnified Parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
1.6 Information by Holder. Any Holder or Holders of Registrable Securities
included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.7 Rule 144 Reporting. With a view to making available to Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees at all times to:
(a) make and keep public information available, as those terms are understood
and defined in SEC Rule 144, after 90 days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to furnish to such
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as the Holder may reasonably request in complying with
<PAGE>
Greyrock Capital Registration Rights Agreement
- --------------------------------------------------------------------------------
any rule or regulation of the SEC allowing the Holder to sell any such
securities without registration.
1.8 Transfer of Registration Rights. Holders' rights to cause the Company to
register their securities and keep information available, granted to them by the
Company under subsections 1.2 and 1.7 may be assigned to a transferee or
assignee of a Holder's Registrable Securities not sold to the public, provided,
that the Company is given written notice by such Holder at the time of or within
a reasonable time after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned. The Company may prohibit the transfer of
any Holders' rights under this subsection 1.8 to any proposed transferee or
assignee who the Company reasonably believes is a competitor of the Company.
2. General.
2.1 Waivers and Amendments. With the written consent of the record or
beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities. Upon the effectuation of
each such waiver, consent, agreement of amendment or modification, the Company
shall promptly give written notice thereof to the record holders of the
Registrable Securities who have not previously consented thereto in writing.
This Agreement or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, except to
the extent provided in this subsection 2.1.
2.2 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
2.3 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
2.4 Entire Agreement. Except as set forth below, this Agreement and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties with regard to the subjects hereof and
thereof.
2.5 Notices. etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first class mail, postage
prepaid, certified or registered mail, return receipt requested, addressed (a)
if to Holder, at such Holder's address as set forth in the heading to this
Agreement, or at such other address as such Holder shall have furnished to the
Company in writing, or (b) if to the Company, at the Company's address set forth
in the heading to this Agreement, or at such other address as the Company shall
have furnished to the Holder in writing.
2.6 Severability. In case any provision of this Agreement shall be invalid,
illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement or any provision of the other Agreements
shall not in any way be affected or impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
<PAGE>
Greyrock Capital Registration Rights Agreement
- --------------------------------------------------------------------------------
2.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
Company:
P-COM, INC.
By /s/ Karl F. Meyer
----------------------------------------
Vice President, Corporate Controller
Purchaser:
GREYROCK CAPITAL
By /s/ Lisa Nagano
----------------------------------------
Title Senior Vice President
-------------------------------------
<PAGE>
EXHIBIT 10.64
[LOGO OF GREYROCK CAPITAL APPEARS HERE]
Antidilution Agreement
Issuer: P-COM, INC.
Address: 3175 S. Winchester Blvd.
Campbell, California 95008
Date: January 14, 2000
THIS AGREEMENT is entered into as of the above date by and between GREYROCK
CAPITAL, a Division of Banc of America Commercial Finance Corporation
("Purchaser"), whose address is 10880 Wilshire Blvd. Suite 1850, Los Angeles, CA
90024, and the above Company, whose address is set forth above.
RECITALS
A. Concurrently with the execution of this Antidilution Agreement, the
Purchaser is purchasing from the Company a Warrant to Purchase Stock (the
"Warrant") pursuant to which Purchaser has the right to acquire from the Company
the Shares (as defined in the Warrant).
B. By this Antidilution Agreement, the Purchaser and the Company desire to
set forth the adjustment in the number of Shares issuable upon exercise of the
Warrant as a result of a diluting issuance.
C. Capitalized terms used herein shall have the same meaning as set forth in
the Warrant.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. Definitions. As used in this Antidilution Agreement, the following terms
have the following respective meanings:
(a) "Option" means any right, option, or warrant to subscribe for, purchase,
or otherwise acquire common stock or Convertible Securities.
(b) "Convertible Securities" means any evidences of indebtedness, shares of
stock, or other securities directly or indirectly convertible into or
exchangeable for common stock.
(c) "Issue" means to grant, issue, sell, assume, or fix a record date for
determining persons entitled to receive, any security (including Options),
whichever of the foregoing is the first to occur.
(d) "Additional Common Shares" means all common stock (including reissued
shares) issued (or deemed to be issued pursuant to Section 2) after the date of
the Warrant. Additional Common Shares does not include, however, (i) any common
stock issued in a transaction described in Sections 2.1 and 2.2 of the Warrant;
any common stock Issued upon exercise or conversion of any Option or Convertible
Securities outstanding on the date of the Warrant; (ii) the Shares; or (iii)
common stock issued as incentive or in a nonfinancing transaction to employees,
officers, directors, or consultants to the Company or under any Option or
Convertible Security so issued (including all transactions under the employee's
stock purchase plan); or (iv) any common stock issued in connection with (or
under Options or Convertible Securities issued in connection with) vendor or
customer relationships or strategic partnering, provided that the foregoing
--------
shall not include issuances in connection with merger or acquisition
transactions.
2. Deemed Issuance of Additional Common Shares. The shares of common stock
ultimately Issuable upon exercise of an Option (including the shares of common
stock ultimately Issuable upon conversion or exercise of a Convertible Security
Issuable pursuant to an Option) are deemed to be Issued when the Option is
Issued. The shares of common stock ultimately Issuable upon conversion or
exercise of a Convertible Security (other than a Convertible Security Issued
pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible
Security. The maximum amount of common stock Issuable is determined without
regard to any future adjustments permitted under the instrument creating the
Options or Convertible Securities.
<PAGE>
Greyrock Capital Antidilution Agreement
- --------------------------------------------------------------------------------
3. Adjustment of Warrant Price for Diluting Issuances.
3.1 Weighted Average Adjustment. If the Company Issues Additional Common
Shares after the date of the Warrant and the consideration per Additional Common
Share (determined pursuant to Section 9) is less than the Warrant Price in
effect immediately before such Issue, the Warrant Price in effect immediately
before such Issue shall be reduced, concurrently with such Issue, to a price
(calculated to the nearest hundredth of a cent) determined by multiplying the
Warrant Price by a fraction:
(a) the numerator of which is the amount of common stock outstanding
immediately before such Issue plus the amount of common stock that the aggregate
consideration received by the Company for the Additional Common Shares would
purchase at the Warrant Price in effect immediately before such Issue, and
(b) the denominator of which is the amount of common stock outstanding
immediately before such Issue plus the number of such Additional Common Shares.
3.2 Adjustment of Number of Shares. Upon each adjustment of the Warrant
Price, the number of Shares issuable upon exercise of the Warrant shall be
increased to equal the quotient obtained by dividing (a) the product resulting
from multiplying (i) the number of Shares issuable upon exercise of the Warrant
and (ii) the Warrant Price, in each case as in effect immediately before such
adjustment, by (b) the adjusted Warrant Price.
3.3 Securities Deemed Outstanding. For the purpose of this Section 3, all
securities issuable upon exercise of any outstanding Convertible Securities or
Options, warrants, or other rights to acquire securities of the Company shall be
deemed to be outstanding.
4. No Adjustment for Issuances Following Deemed Issuances. No adjustment to
the Warrant Price shall be made upon the exercise of Options or conversion of
Convertible Securities.
5. Adjustment Following Changes in Terms of Options or Convertible
Securities. If the consideration payable to, or the amount of common stock
Issuable by, the Company increases or decreases, respectively, pursuant to the
terms of any outstanding Options or Convertible Securities, the Warrant Price
shall be recomputed to reflect such increase or decrease. The recomputation
shall be made as of the time of the Issuance of the Options or Convertible
Securities. Any changes in the Warrant Price that occurred after such Issuance
because other Additional Common Shares were Issued or deemed Issued shall also
be recomputed.
6. Recomputation Upon Expiration of Options or Convertible Securities. The
Warrant Price computed upon the original Issue of any Options or Convertible
Securities, and any subsequent adjustments based thereon, shall be recomputed
when any Options or rights of conversion under Convertible Securities expire
without having been exercised. In the case of Convertible Securities or Options
for common stock, the Warrant Price shall be recomputed as if the only
Additional Common Shares Issued were the shares of common stock actually Issued
upon the exercise of such securities, if any, and as if the only consideration
received therefor was the consideration actually received upon the Issue,
exercise or conversion of the Options or Convertible Securities. In the case of
Options for Convertible Securities, the Warrant Price shall be recomputed as if
the only Convertible Securities Issued were the Convertible Securities actually
Issued upon the exercise thereof, if any, and as if the only consideration
received therefor was the consideration actually received by the Company
(determined pursuant to Section 9), if any, upon the Issue of the Options for
the Convertible Securities.
7. Limit on Readjustments. No readjustment of the Warrant Price pursuant to
Sections 5 or 6 shall increase the Warrant Price more than the amount of any
decrease made in respect of the Issue of any Options or Convertible Securities.
8. 30 Day Options. In the case of any Options that expire by their terms not
more than 30 days after the date of Issue thereof, no adjustment of the Warrant
Price shall be made until the expiration or exercise of all such Options.
9. Computation of Consideration. The consideration received by the Company
for the Issue of any Additional Common Shares shall be computed as follows:
(a) Cash shall be valued at the amount of cash received by the Corporation,
----
excluding amounts paid or payable for accrued interest or accrued dividends.
(b) Property. Property other than cash shall be computed at the fair market
--------
value thereof at the time of the Issue as determined in good faith by the Board
of Directors of the Company.
(c) Mixed Consideration. The consideration for Additional common Shares
-------------------
Issued together with other property of the Company for consideration that covers
both shall be determined in good faith by the Board of Directors.
(d) Options and Convertible Securities. The consideration per Additional
----------------------------------
Common Share for Options and Convertible Securities shall be determined by
dividing:
(i) the total amount, if any, received or receivable by the Company for the
Issue of the Options or Convertible Securities, plus the minimum amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Company upon exercise of the Options or
conversion of the Convertible Securities, by
(ii) the maximum amount of common stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) ultimately Issuable upon the exercise of
such Options or the conversion of such Convertible Securities.
10. General.
10.1 Governing Law. This Antidilution Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
<PAGE>
Greyrock Capital Antidilution Agreement
- --------------------------------------------------------------------------------
10.2 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
10.3 Entire Agreement. This Antidilution Agreement and the other documents
delivered pursuant and otherwise relating hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. The terms and provisions of this Agreement may not be waived
or amended, except in a writing executed by Company and a duly authorized
officer of Holder.
10.4 Notices. etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first class mail, postage
prepaid, certified or registered mail, return receipt requested, addressed (a)
if to Purchaser at Purchaser's address as set forth in the heading to this
Agreement, or at such other address as Purchaser shall have furnished to the
Company in writing, or (b) if to the Company, at the Company's address set forth
in the heading to this Agreement, or at such other address as the Company shall
have furnished to the Purchaser in writing.
10.5 Severability. In case any provision of this Antidilution Agreement shall
be invalid, illegal, or unenforceable, the validity, legality and enforceability
of the remaining provisions of this Antidilution Agreement shall not in any way
be affected or impaired thereby.
10.6 Titles and Subtitles. The titles of the sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Antidilution Agreement.
10.7 Counterparts. This Antidilution Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
Company:
P-COM, INC.
By /s/ Karl F. Meyer
-------------------------------------
Vice President, Corporate Controller
Purchaser:
GREYROCK CAPITAL
By /s/ Lisa Nagano
-------------------------------
Title Senior Vice President
----------------------------
<PAGE>
EXHIBIT 10.65
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
______________________________________________
WARRANT TO PURCHASE STOCK
Warrant to Purchase 80,000 Issue Date: January 14, 2000
------
Shares of the Common Expiration Date: January 31, 2005
Stock of P-Com, Inc. Initial Exercise Price: $5.71 per share
THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and for other
good and valuable consideration, Silicon Valley Bank ("Holder") is entitled to
purchase the number of fully paid and non-assessable shares of the class of
securities (the "Shares") of the corporation (the "Company") at the initial
exercise price per Share (the "Warrant Price") all as set forth above and as
adjusted pursuant to Article 2 of this Warrant, subject to the provisions and
upon the terms and conditions set forth in this Warrant.
ARTICLE 1. EXERCISE.
1.1 Method of Exercise. Holder may exercise this Warrant by delivering a
duly executed Notice of Exercise in substantially the form attached as Appendix
1 to the principal office of the Company. Unless Holder is exercising the
conversion right set forth in Section 1.2, Holder shall also deliver to the
Company a check for the aggregate Warrant Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall be
determined pursuant Section 1.4.
1.3 [Reserved]
1.4 Fair Market Value. If the Shares are traded in a public market, the
fair market value of the Shares shall be mean average closing price of the
Shares (or the closing price of the Company's stock into which the Shares are
convertible) reported with respect to the ten business days immediately before
Holder delivers its Notice of Exercise to the Company. If the Shares are not
traded in a public market, the Board of Directors of the Company shall determine
fair market value in its reasonable good faith judgment. The foregoing
notwithstanding, if Holder advises the Board of Directors in writing that Holder
disagrees with such determination, then the Company and Holder shall promptly
agree upon a reputable investment banking firm to undertake such valuation. If
the valuation of such investment banking firm is greater than that determined by
the Board of Directors, then all fees and expenses of such investment banking
firm shall be paid by the Company. In all other circumstances, such fees and
expenses shall be paid by Holder.
1.5 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.6 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.7 Repurchase on Sale, Merger or Consolidation of the Company.
1.7.1. "Acquisition". For the purpose of this Warrant, "Acquisition" means
any sale, license, or other disposition of all or substantially all of the
assets of the Company, or any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity after the transaction.
1.7.2. Assumption of Warrant. If upon the closing of any Acquisition the
successor entity assumes the obligations of this Warrant, then this Warrant
shall be exercisable for the same securities, cash, and property as would be
payable for the Shares issuable upon exercise of the unexercised portion of this
Warrant as if such Shares were outstanding on the record date for the
Acquisition and subsequent closing. The Warrant Price shall be adjusted
accordingly.
1.7.3. Nonassumption. If upon the closing of any Acquisition the successor
entity does not assume the obligations of this Warrant and Holder has not
otherwise exercised this Warrant in full, then the unexercised portion of this
Warrant shall be deemed to have been automatically converted pursuant to Section
1.2 and thereafter Holder shall participate in the acquisition on the same terms
as other holders of the same class of securities of the Company.
1.7.4. [Reserved]
-1-
<PAGE>
Warrant to Purchase Stock
- --------------------------------------------------------------------------------
ARTICLE 2. ADJUSTMENTS TO THE SHARES.
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on its common stock (or the Shares if the Shares are securities other
than common stock) payable in common stock, or other securities, subdivides the
outstanding common stock into a greater amount of common stock, or, if the
Shares are securities other than common stock, subdivides the Shares in a
transaction that increases the amount of common stock into which the Shares are
convertible, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend or subdivision occurred.
2.2 Reclassification, Exchange or Substitution. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon exercise or conversion of this
Warrant, Holder shall be entitled to receive, upon exercise or conversion of
this Warrant, the number and kind of securities and property that Holder would
have received for the Shares if this Warrant had been exercised immediately
before such reclassification, exchange, substitution, or other event. Such an
event shall include any automatic conversion of the outstanding or issuable
securities of the Company of the same class or series as the Shares to common
stock pursuant to the terms of the Company's Articles of Incorporation upon the
closing of a registered public offering of the Company's common stock. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Warrant Price and to the number of securities or property issuable upon exercise
of the new Warrant. The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Shares are
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares, the Warrant Price shall be proportionately increased.
2.4 Adjustments for Diluting Issuances. The Warrant Price and the number
of Shares issuable upon exercise of this Warrant or, if the Shares are Preferred
Stock, the number of shares of common stock issuable upon conversion of the
Shares, shall be subject to adjustment, from time to time in the manner set
forth on Exhibit A in the event of diluting issuances.
2.5 No Impairment. The Company shall not, by amendment of its Certificate
of Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Article 2 and
in taking all such action as may be reasonably necessary or appropriate to
protect Holder's rights under this Article against impairment. If the Company
takes any action affecting the Shares or its common stock other than as
described above that adversely affects Holder's rights under this Warrant, the
Warrant Price shall be adjusted downward and the number of Shares issuable upon
exercise of this Warrant shall be adjusted upward in such a manner that the
aggregate Warrant Price of this Warrant is unchanged.
2.6 Fractional Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be issued
shall be rounded down to the nearest whole Share. If a fractional share interest
arises upon any exercise or conversion of the Warrant, the Company shall
eliminate such fractional share interest by paying Holder amount computed by
multiplying the fractional interest by the fair market value of a full Share.
2.7 Certificate as to Adjustments. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
(a) The initial Warrant Price referenced on the first page of this Warrant
is not greater than the fair market value of the Shares as of the date of this
Warrant.
(b) All Shares which may be issued upon the exercise of the purchase right
represented by this Warrant, and all securities, if any, issuable upon
conversion of the Shares, shall, upon issuance, be duly authorized, validly
issued, fully paid and non-assessable, and free of any liens and encumbrances
except for restrictions on transfer provided for herein or under applicable
federal and state securities laws.
3.2 Notice of Certain Events. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of its common stock any
additional shares of stock of any class or series or other rights; (c) to effect
any reclassification or recapitalization of common stock; (d) to merge or
consolidate with or into any other corporation, or sell, lease, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up; or (e) offer holders of registration rights the opportunity to participate
in an underwritten public offering of the company's common stock for cash, then,
in connection with each such event, the Company shall give Holder (1) at least
20 days prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on
which the holders of common stock will be entitled thereto) or for determining
rights to vote, if any, in respect of the matters referred to in (c) and (d)
above; (2) in the case of the matters referred to in (c) and (d) above at least
20 days prior written notice of the date when the same will take place (and
specifying the date on which the holders of common stock will be entitled to
exchange their common stock for securities or other
-2-
<PAGE>
Warrant to Purchase Stock
- --------------------------------------------------------------------------------
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant and/or
any of the Shares, the Company shall deliver to the Holder (a) promptly after
mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days after the end of each
fiscal year of the Company, the annual audited financial statements of the
Company certified by independent public accountants of recognized standing and
(c) within forty-five (45) days after the end of each of the first three
quarters of each fiscal year, the Company's quarterly, unaudited financial
statements.
3.4 Registration Under Securities Act of 1933, as amended. The Company
agrees that the Shares or, if the Shares are convertible into common stock of
the Company, such common stock, shall be subject to the registration rights set
forth on Exhibit B, if attached.
ARTICLE 4. MISCELLANEOUS.
-------------
4.1 Term: Notice of Expiration. This Warrant is exercisable, in whole or
in part, at any time and from time to time on or before the Expiration Date set
forth above.
4.2 Legends. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
Shares issuable upon exercise of this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company, if reasonably
requested by the Company). The Company shall not require Holder to provide an
opinion of counsel if the transfer is to an affiliate of Holder or if there is
no material question as to the availability of current information as referenced
in Rule 144(c), Holder represents that it has complied with Rule 144(d) and (e)
in reasonable detail, the selling broker represents that it has complied with
Rule 144(f), and the Company is provided with a copy of Holders notice of
proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.2 and
4.3, Holder may transfer all or part of this Warrant or the Shares issuable upon
exercise of this Warrant (or the securities issuable, directly or indirectly,
upon conversion of the Shares, if any) by giving the Company notice of the
portion of the Warrant being transferred setting forth the name, address and
taxpayer identification number of the transferee and surrendering this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).
Subject to the following proviso, the Holder shall have no right to transfer to
any Person or exercise all or any part of this Warrant at any time prior to the
exercise (if any) of the Receivables Facility Option (as defined in the Loan and
Security Agreement dated January 14, 2000 between the Company and Greyrock
Capital, a Division of Banc of America Commercial Finance Corporation (as
amended from time to time referred to herein as the "Loan Agreement"), provided
--------
that the above restrictions regarding the transfer and exercise of this Warrant
shall no longer be effective if the Loan Agreement is terminated prior to the
exercise of the Greyrock Option (as defined in the Loan Agreement). Further,
unless the Company is filing financial information with the SEC pursuant to the
Securities Exchange Act of 1934, the Company shall have the right to refuse to
transfer any portion of this Warrant to any person who directly competes with
the Company. Notwithstanding anything to the contrary herein, Holder may
transfer all or portion of this Warrant to Silicon Valley Bancshares at any time
provided that such entity is an "affiliate" (as defined in Rule 405 under the
- --------
Act) of the Holder, provided, further, Company shall not require an opinion of
-------- -------
counsel in connection therewith, provided, further, that any such transfer shall
-------- -------
nonetheless be subject to the release provisions set forth in section 7(c) of
the Loan Agreement.
4.4A Holder Agreements. The Holder, by its acceptance hereof, represents
and agrees as follows:
(1) Holder represents that it is acquiring this Warrant for its own
account and not with a view to the distribution thereof. Holder further
represents that it is an accredited investor within the meaning of Rule 501(a)
promulgated under the Securities Act of 1933, as amended (the "Securities Act").
(2) Holder understands that the Warrant has not been registered under
the Securities Act or any state securities laws. Holder understands further that
the Warrant will be acquired for investment and may not be sold, pledged or
otherwise transferred without an effective registration statement thereof under
the Securities Act and any applicable state securities laws or pursuant to Rule
144 or an opinion of counsel reasonably satisfactory to the Company and its
counsel that such registration is not required.
(3) Holder agrees that Holder's rights in this Warrant are subject to
being released as provided in Section 7(c) of the Schedule to the Loan
Agreement.
4.5 Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such holder from time
to time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which
-3-
<PAGE>
Warrant to Purchase Stock
- --------------------------------------------------------------------------------
enforcement of such change, waiver, discharge or termination is sought.
4.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant, the party prevailing in
such dispute shall be entitled to collect from the other party all costs
incurred in such dispute, including reasonable attorneys' fees.
4.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.
P-COM, INC.
By /s/ Karl F. Meyer
--------------------------------------
Vice President, Corporate Controller
-4-
<PAGE>
Warrant to Purchase Stock
- --------------------------------------------------------------------------------
APPENDIX 1
NOTICE OF EXERCISE
------------------
1. The undersigned hereby elects to purchase ____________ shares of the
Common/Series ____ Preferred [strike one] Stock of __________ pursuant to the
terms of the attached Warrant, and tenders herewith payment of the purchase
price of such shares in full.
1. The undersigned hereby elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant. This
conversion is exercised with respect to _______ of the Shares covered by the
Warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:
__________________________
(NAME)
__________________________
__________________________
(ADDRESS)
3. The undersigned represents it is acquiring the shares solely for its
own account and not as a nominee for any other party and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
_____________________________________
(Signature)
_____________________________________
(Date)
-5-
<PAGE>
Warrant to Purchase Stock
- --------------------------------------------------------------------------------
EXHIBIT A
ANTI-DILUTION PROVISIONS
Per Anti-Dilution Agreement of even date.
-6-
<PAGE>
Warrant to Purchase Stock
- --------------------------------------------------------------------------------
EXHIBIT B
REGISTRATION RIGHTS
Per Registration Rights Agreement of even date.
-7-
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 10.66
Registration Rights Agreement
Issuer: P-COM, INC.
Address: 3175 S. Winchester Blvd.
Campbell, California 95008
Date: January 14, 2000
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the above date by and
between SILICON VALLEY BANK ("Purchaser"), whose address is 3003 Tasman Drive,
Santa Clara, California 95054 and the above Company, whose address is set forth
above.
RECITALS
A. Concurrently with the execution of this Agreement, the Purchaser is
purchasing from the Company a Warrant to Purchase Stock (the "Warrant") pursuant
to which Purchaser has the right to acquire from the Company the Shares (as
defined in the Warrant).
B. By this Agreement, the Purchaser and the Company desire to set forth
the registration rights of the Shares all as provided herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of effectiveness of such
registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares (if Common
Stock) or all shares of Common Stock of the Company issuable or issued upon
conversion of the Shares and (ii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, any stock referred to in (i).
(c) The terms "Holder" or "Holders" means the Purchaser or qualifying
transferees under subsection 1.8 hereof who hold Registrable Securities.
(d) The term "SEC" means the Securities and Exchange Commission.
1.2 Company Registration.
(a) Registration. If at any time or from time to time, the Company shall
determine to register any of its securities, for its own account or the account
of any of its shareholders, other than with regard to resale registration
statements for the former holders of Series B Preferred Stock of the Company and
other than a registration on Form S-1 or S-8 relating solely to employee stock
option or purchase plans, or a registration on Form S-4 relating solely to an
SEC Rule 145 transaction, or a registration on any other form (other than
Form S-1, S-2, S-3 or S-18, or their successor forms) or any successor to such
forms, which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities, the Company will:
(i) promptly give to each Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state securities
laws); and
(ii) include in such registration (and compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 30 days after receipt of such written notice from the
Company, by any Holder or Holders, except as set forth in subsection 1.2(b)
below.
(b) Underwriting. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to subsection
1.2(a)(i). In such event the right of any Holder to registration pursuant to
this subsection 1.2 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other shareholders distributing their
<PAGE>
Silicon Valley Bank Registration Rights Agreement
- --------------------------------------------------------------------------------
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
1.2(b), if the underwriter determines that marketing factors require a
limitation on the number of shares to be underwritten, the underwriter may
(subject to the allocation priority set forth below) exclude from such
registration and underwriting some or all of the Registrable Securities which
would otherwise be underwritten pursuant hereto. The Company shall so advise all
Holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated in the following manner. The number of shares that may be
included in the registration and underwriting on behalf of the Purchaser,
directors and officers and other Holders shall be allocated among the Purchaser,
directors and officers and other Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities and other
securities which they had requested to be included in such registration at the
time of filing the registration statement.
1.3 Expenses of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 1 including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne by
the Company except the Company shall not be required to pay underwriters' fees,
discounts or commissions relating to Registrable Securities or any fees and
disbursements of counsel for any Holder. All other expenses of any registered
offering not otherwise borne by the Company shall be borne pro rata among the
Holders participating in the offering and the Company.
1.4 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. Except as
otherwise provided in subsection 1.3, at its expense the Company will:
(a) Should a registration statement with respect to such Registrable
Securities become effective, upon the request of the Holders of a majority of
the Registrable Securities registered thereunder, keep such registration
statement effective for up to 120 days.
(b) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
states as shall be reasonably requested by the Holders, provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such states.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing. Upon such notification, the Holders agree to cease immediately selling
Registrable Securities until the Company has provided a supplemental prospectus
to the Holders.
1.5 Indemnification.
(a) The Company will indemnify each Holder of Registrable Securities and
each of its officers, directors and partners, and each person controlling such
Holder, with respect to which such registration, qualification or compliance has
been effected pursuant to this Rights Agreement, and each underwriter, if any,
and each person who controls any underwriter of the Registrable Securities held
by or issuable to such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Securities Exchange
Act of 1934, as amended ("Exchange Act"), or any state securities law applicable
to the Company or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any such state law and relating to action or inaction
required of the Company in connection with any such registration, qualification
of compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, within a
reasonable amount of time after incurred for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 1.5(a) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability, or action
if such settlement is effected without the consent of
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Silicon Valley Bank Registration Rights Agreement
- --------------------------------------------------------------------------------
the Company (which consent shall not be unreasonably withheld); and provided
further, that the Company will not be liable in any such case to the extent that
any such claim, loss, damage or liability arises out of or is based on any
untrue statement or omission based upon written information furnished to the
Company by such Holder specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or issuable to
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, expenses, damages and liabilities (or
actions in respect thereof) arising out of or based on any (i) sales not using
the official prospectus or using representations not in the official prospectus
or (ii) untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, such Holders, such
directors, officers, partners, persons or underwriters for any reasonable legal
or any other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity agreement
contained in this subsection 1.5(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld); and provided further, that the total amount for
which any Holder shall be liable under this subsection 1.5(b) shall not in any
event exceed the aggregate proceeds received by such Holder from the sale of
Registrable Securities held by such Holder in such registration.
(c) Each party entitled to indemnification under this subsection 1.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense; and provided further, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in prejudice to the
Indemnifying Party; and provided further, that an Indemnified Party (together
with all other Indemnified Parties which may be represented without conflict by
one counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
1.6 Information by Holder. Any Holder or Holders of Registrable Securities
included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.7 Rule 144 Reporting. With a view to making available to Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees at all times to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, after 90 days after the effective date
of the first registration filed by the Company for an offering of its securities
to the general public;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to furnish to
such Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed by the
Company as the Holder may reasonably request in complying with any rule or
regulation of the SEC allowing the Holder to sell any such securities without
registration.
1.8 Transfer of Registration Rights. Holders' rights to cause the Company
to register their securities and keep information available, granted to them by
the Company under subsections 1.2 and 1.7 may be assigned to a transferee or
assignee of a Holder's Registrable Securities not sold to the public, provided,
that the Company is given written notice by such Holder at the time of or within
a reasonable time after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned. The Company may prohibit the transfer of
any Holders' rights under this subsection 1.8 to any
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Silicon Valley Bank Registration Rights Agreement
- --------------------------------------------------------------------------------
proposed transferee or assignee who the Company reasonably believes is a
competitor of the Company.
2. General.
2.1 Waivers and Amendments. With the written consent of the record or
beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities. Upon the effectuation of
each such waiver, consent, agreement of amendment or modification, the Company
shall promptly give written notice thereof to the record holders of the
Registrable Securities who have not previously consented thereto in writing.
This Agreement or any provision hereof may be changed, waived, discharged or
terminated only by a statement in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought, except to
the extent provided in this subsection 2.1.
2.2 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
2.3 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
2.4 Entire Agreement. Except as set forth below, this Agreement and the
other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
2.5 Notices. etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Holder, at such Holder's address as set forth in the heading
to this Agreement, or at such other address as such Holder shall have furnished
to the Company in writing, or (b) if to the Company, at the Company's address
set forth in the heading to this Agreement, or at such other address as the
Company shall have furnished to the Holder in writing.
2.6 Severability. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreements shall not in any way be affected or impaired thereby.
2.7 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
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Silicon Valley Bank Registration Rights Agreement
- --------------------------------------------------------------------------------
2.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
Company:
P-COM, INC.
By /s/ Karl F. Meyer
-------------------------------------
Vice President, Corporate Controller
Purchaser:
SILICON VALLEY BANK
By /s/ Patrick J. Clemens
------------------------------
Title Vice President
---------------------------
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<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 10.67
Antidilution Agreement
Issuer: P-COM, INC.
Address: 3175 S. Winchester Blvd.
Campbell, California 95008
Date: January 14, 2000
THIS AGREEMENT is entered into as of the above date by and between SILICON
VALLEY BANK ("Purchaser"), whose address is 3003 Tasman Drive, Santa Clara,
California 95054, and the above Company, whose address is set forth above.
RECITALS
A. Concurrently with the execution of this Antidilution Agreement, the
Purchaser is purchasing from the Company a Warrant to Purchase Stock (the
"Warrant") pursuant to which Purchaser has the right to acquire from the Company
the Shares (as defined in the Warrant).
B. By this Antidilution Agreement, the Purchaser and the Company desire
to set forth the adjustment in the number of Shares issuable upon exercise of
the Warrant as a result of a diluting issuance.
C. Capitalized terms used herein shall have the same meaning as set forth
in the Warrant.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. Definitions. As used in this Antidilution Agreement, the following
terms have the following respective meanings:
(a) "Option" means any right, option, or warrant to subscribe for,
purchase, or otherwise acquire common stock or Convertible Securities.
(b) "Convertible Securities" means any evidences of indebtedness, shares
of stock, or other securities directly or indirectly convertible into or
exchangeable for common stock.
(c) "Issue" means to grant, issue, sell, assume, or fix a record date for
determining persons entitled to receive, any security (including Options),
whichever of the foregoing is the first to occur.
(d) "Additional Common Shares" means all common stock (including reissued
shares) issued (or deemed to be issued pursuant to Section 2) after the date of
the Warrant. Additional Common Shares does not include, however, (i) any common
stock issued in a transaction described in Sections 2.1 and 2.2 of the Warrant;
any common stock Issued upon exercise or conversion of any Option or Convertible
Securities outstanding on the date of the Warrant; (ii) the Shares; or (iii)
common stock issued as incentive or in a nonfinancing transaction to employees,
officers, directors, or consultants to the Company or under any Option or
Convertible Security so issued (including all transactions under the employee's
stock purchase plan); or (iv) any common stock issued in connection with (or
under Options or Convertible Securities issued in connection with) vendor or
customer relationships or strategic partnering, provided that the foregoing
--------
shall not include issuances in connection with merger or acquisition
transactions.
2. Deemed Issuance of Additional Common Shares. The shares of common
stock ultimately Issuable upon exercise of an Option (including the shares of
common stock ultimately Issuable upon conversion or exercise of a Convertible
Security Issuable pursuant to an Option) are deemed to be Issued when the Option
is Issued. The shares of common stock ultimately Issuable upon conversion or
exercise of a Convertible Security (other than a Convertible Security Issued
pursuant to an Option) shall be deemed Issued upon Issuance of the Convertible
Security. The maximum amount of common stock Issuable is determined without
regard to any future adjustments permitted under the instrument creating the
Options or Convertible Securities.
3. Adjustment of Warrant Price for Diluting Issuances.
3.1 Weighted Average Adjustment. If the Company Issues Additional Common
Shares after the date of the Warrant and the consideration per Additional Common
Share (determined pursuant to Section 9) is less than the Warrant Price in
effect immediately before such Issue, the Warrant Price in effect immediately
before such Issue shall be reduced, concurrently with such Issue, to a price
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Silicon Valley Bank Antidilution Agreement
- --------------------------------------------------------------------------------
(calculated to the nearest hundredth of a cent) determined by multiplying the
Warrant Price by a fraction:
(a) the numerator of which is the amount of common stock outstanding
immediately before such Issue plus the amount of common stock that the aggregate
consideration received by the Company for the Additional Common Shares would
purchase at the Warrant Price in effect immediately before such Issue, and
(b) the denominator of which is the amount of common stock outstanding
immediately before such Issue plus the number of such Additional Common Shares.
3.2 Adjustment of Number of Shares. Upon each adjustment of the Warrant
Price, the number of Shares issuable upon exercise of the Warrant shall be
increased to equal the quotient obtained by dividing (a) the product resulting
from multiplying (i) the number of Shares issuable upon exercise of the Warrant
and (ii) the Warrant Price, in each case as in effect immediately before such
adjustment, by (b) the adjusted Warrant Price.
3.3 Securities Deemed Outstanding. For the purpose of this Section 3, all
securities issuable upon exercise of any outstanding Convertible Securities or
Options, warrants, or other rights to acquire securities of the Company shall be
deemed to be outstanding.
4. No Adjustment for Issuances Following Deemed Issuances. No adjustment
to the Warrant Price shall be made upon the exercise of Options or conversion of
Convertible Securities.
5. Adjustment Following Changes in Terms of Options or Convertible
Securities. If the consideration payable to, or the amount of common stock
Issuable by, the Company increases or decreases, respectively, pursuant to the
terms of any outstanding Options or Convertible Securities, the Warrant Price
shall be recomputed to reflect such increase or decrease. The recomputation
shall be made as of the time of the Issuance of the Options or Convertible
Securities. Any changes in the Warrant Price that occurred after such Issuance
because other Additional Common Shares were Issued or deemed Issued shall also
be recomputed.
6. Recomputation Upon Expiration of Options or Convertible Securities.
The Warrant Price computed upon the original Issue of any Options or Convertible
Securities, and any subsequent adjustments based thereon, shall be recomputed
when any Options or rights of conversion under Convertible Securities expire
without having been exercised. In the case of Convertible Securities or Options
for common stock, the Warrant Price shall be recomputed as if the only
Additional Common Shares Issued were the shares of common stock actually Issued
upon the exercise of such securities, if any, and as if the only consideration
received therefor was the consideration actually received upon the Issue,
exercise or conversion of the Options or Convertible Securities. In the case of
Options for Convertible Securities, the Warrant Price shall be recomputed as if
the only Convertible Securities Issued were the Convertible Securities actually
Issued upon the exercise thereof, if any, and as if the only consideration
received therefor was the consideration actually received by the Company
(determined pursuant to Section 9), if any, upon the Issue of the Options for
the Convertible Securities.
7. Limit on Readjustments. No readjustment of the Warrant Price pursuant
to Sections 5 or 6 shall increase the Warrant Price more than the amount of any
decrease made in respect of the Issue of any Options or Convertible Securities.
8. 30 Day Options. In the case of any Options that expire by their terms
not more than 30 days after the date of Issue thereof, no adjustment of the
Warrant Price shall be made until the expiration or exercise of all such
Options.
9. Computation of Consideration. The consideration received by the
Company for the Issue of any Additional Common Shares shall be computed as
follows:
(a) Cash shall be valued at the amount of cash received by the
----
Corporation, excluding amounts paid or payable for accrued interest or accrued
dividends.
(b) Property. Property other than cash shall be computed at the fair
--------
market value thereof at the time of the Issue as determined in good faith by the
Board of Directors of the Company.
(c) Mixed Consideration. The consideration for Additional common Shares
-------------------
Issued together with other property of the Company for consideration that covers
both shall be determined in good faith by the Board of Directors.
(d) Options and Convertible Securities. The consideration per Additional
----------------------------------
Common Share for Options and Convertible Securities shall be determined by
dividing:
(i) the total amount, if any, received or receivable by the Company for
the Issue of the Options or Convertible Securities, plus the minimum amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Company upon exercise of the Options or
conversion of the Convertible Securities, by
(ii) the maximum amount of common stock (as set forth in the instruments
relating thereto, without regard to any provision contained therein for a
subsequent adjustment of such number) ultimately Issuable upon the exercise of
such Options or the conversion of such Convertible Securities.
10. General.
10.1 Governing Law. This Antidilution Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
10.2 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
10.3 Entire Agreement. This Antidilution Agreement and the other documents
delivered pursuant and otherwise relating hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. The terms and provisions of
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Silicon Valley Bank Antidilution Agreement
- --------------------------------------------------------------------------------
this Agreement may not be waived or amended, except in a writing executed by
Company and a duly authorized officer of Holder.
10.4 Notices. etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Purchaser at Purchaser's address as set forth in the heading
to this Agreement, or at such other address as Purchaser shall have furnished to
the Company in writing, or (b) if to the Company, at the Company's address set
forth in the heading to this Agreement, or at such other address as the Company
shall have furnished to the Purchaser in writing.
10.5 Severability. In case any provision of this Antidilution Agreement
shall be invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Antidilution Agreement shall
not in any way be affected or impaired thereby.
10.6 Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Antidilution Agreement.
10.7 Counterparts. This Antidilution Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
Company:
P-COM, INC.
By /s/ Karl F. Meyer
--------------------------------------
Vice President, Corporate Controller
Purchaser:
SILICON VALLEY BANK
By /s/ Patrick J. Clemens
------------------------------
Title Vice President
---------------------------
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<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Page 1 of 2
COMPANY CONTACTS:
Bob Collins, Vice President & Chief Financial Officer
(408) 866-3666
P-COM CLOSES AGREEMENT FOR $43 MILLION OF NEW EQUITY AND REFINANCES ITS BANK
LINE OF CREDIT
- --------------------------------------------------------------------------------
CAMPBELL, CA - January 13, 2000- P-Com, Inc. (Nasdaq National Market:
PCMS) announced today that it sold 7,530,642 shares of newly issued common stock
to institutional investors for an aggregate of $43.0 million. The Company
priced the unregistered shares at a 15% discount to the 60-day average of its
closing sale prices for the period ended January 5, 2000, the day before the
purchase agreement was signed and the Board of Directors approved the
transaction. The sale closed today.
Whitman Capital, L.P. and J. & W. Seligman & Co. Incorporated were the
lead investors, acquiring 5,253,940 shares of Common Stock for $30.0 million.
Investors advised by Wellington Management Company, LLP, Gruber McBaine
Investment Advisors and Weber Capital Partners, L.P. invested $5.0 million, $5.0
million, and $3.0 million, respectively.
The Company also announced that the repayment in full of its line of credit
with Union Bank of California, N.A. and Bank of America NT & SA, amounting to
approximately $27 million, by utilizing part of the equity proceeds and entering
into a new loan agreement with Greyrock Capital for $12 million.
"These transactions are key steps in our program to strengthen the balance
sheet and provide needed working capital. The initial successful deployment of
our new point-to-multipoint product to several customers is very encouraging and
these actions will allow the Company to aggressively follow-up these successes,"
said George Roberts, Chairman and CEO, P-Com, Inc. "We are particularly pleased
with the investor group and their in-depth knowledge of the telecommunications
industry."
P-Com, Inc. develops, manufactures, and markets network access systems for
the worldwide wireless telecommunications market. The point-to-point, spread
spectrum, and
--more--
<PAGE>
P-COM, INC. CLOSES AGREEMENT FOR $43 MILLION
- --------------------------------------------------------------------------------
Page 2 of 2
point-to-multipoint radio links provided by P-Com are designed to satisfy the
network requirements of cellular and personal communications services, corporate
communications, public utilities and local governments. In addition, P-Com
provides comprehensive network services including system planning, program
planning and management, path design, and installation.
Statements in this release that are forward looking involve known and
unknown risks and uncertainties, which may cause P-Com's actual results in
future periods to be materially different from any future performance that may
be suggested in this release. Such factors may include, but are not limited to,
fluctuations in customer demand and commitments, both in timing and volume,
introduction of new products, commercial acceptance and viability of new
products and expenses associated therewith, cancellations of orders without
penalties, pricing and competition, reliance upon subcontractors, P-Com's
ability to have available an appropriate amount of production capacity in a
timely manner, the ability of P-Com's customers to finance their purchases of P-
Com's products and/or services, the timing of new technology and product
introductions, the risk of early obsolescence, and the pending stockholder class
action lawsuit. Further, P-Com operates in an industry sector where securities
values are highly volatile and may be influenced by economic and other factors
beyond P-Com's control, such as announcements by competitors and service
providers. Reference is made to the discussion of risk factors detailed in P-
Com's filings with the Securities and Exchange Commission, including its reports
on Form 10-K and 10-Q.
P-Com, Inc. has its world headquarters in Campbell, California, USA and
offices in Florida, New Jersey, Virginia, the UK, Italy, France, Germany, China,
and Singapore. P-Com is an ISO 9001 certified company. For additional
information, contact P-Com at:
P-Com, Inc. . 3175 S. Winchester Boulevard . Campbell, CA 95008 . USA
TEL: (408) 866-3666 . FAX: (408) 866-3655
www.p-com.com
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