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EXHIBIT 2.1
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of February
26, 2001, by and among FASTCOMM COMMUNICATIONS CORPORATION, a corporation
organized under the laws of the Commonwealth of Virginia (the "COMPANY"), and
each of the purchasers (the "PURCHASERS") set forth on the execution pages
hereof (the "EXECUTION PAGES").
WHEREAS:
. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").
. The Company desires to sell, and the Purchasers collectively desire
to purchase, upon the terms and conditions stated in this Agreement, 850 units
(the "UNITS"), each Unit consisting of (i) a Prepaid Common Stock Purchase
Warrant, in the form attached hereto as Exhibit A (the "PREPAID WARRANTS"),
which entitles the holder thereof to acquire such number of shares of the
Company's common stock, par value $.01 per share (the "COMMON STOCK"), as is
equal to One Thousand Dollars ($1,000) divided by the Exercise Price set forth
in the Prepaid Warrants, and (ii) additional warrants, in the forms attached
hereto as Exhibit B and Exhibit C to acquire shares of Common Stock
(collectively, the "INCENTIVE WARRANTS"). The shares of Common Stock issuable
upon exercise of or otherwise pursuant to the Prepaid Warrants and the Incentive
Warrants are referred to herein as the "WARRANT SHARES." The Prepaid Warrants
and the Incentive Warrants are collectively referred to herein as the "WARRANTS"
and each of them may individually be referred to herein as a "WARRANT." The
Warrant and the Warrant Shares are collectively referred to herein as the
"SECURITIES" and each of them may individually be referred to herein as a
"SECURITY."
. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form attached hereto as Exhibit D (the "REGISTRATION RIGHTS AGREEMENT"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.
NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:
. PURCHASE AND SALE OF XXXXX.
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. Xxxxxxxx of Units. The issuance, sale and purchase of the Units
shall take place in a closing (the "CLOSING"). The purchase price (the "PURCHASE
PRICE") per Unit shall be equal to One Thousand Dollars ($1,000.00). Each
Purchaser's obligation to purchase Units hereunder is distinct and separate from
each other Purchaser's obligation to purchase Units and no Purchaser shall be
required to purchase hereunder more than the number of Units set forth on such
Purchaser's Execution Page hereto notwithstanding any failure by any other
Purchaser to purchase Units hereunder. On the date of the Closing, subject to
the satisfaction (or waiver) of the conditions set forth in Section 6(a) and
Section 7(a) below, the Company shall issue and sell to each Purchaser, and each
Purchaser severally agrees to purchase from the Company, such number of Units as
is set forth on such Purchaser's Execution Page as being purchasable by such
Purchaser at the Closing.
. Form of Payment. At the Closing hereunder, each Purchaser shall pay
the aggregate Purchase Price for the Units being purchased by such Purchaser at
such closing hereunder by wire transfer to the Company, in accordance with the
Company's written wiring instructions attached hereto as Schedule 1(b), against
delivery of the duly executed Prepaid Warrants and Incentive Warrants being
purchased by such Purchaser at such closing hereunder and the Company shall
deliver such Prepaid Warrants and Incentive Warrants against delivery of such
aggregate Purchase Price.
. Closing Date. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Section 6 and Section 7 below, the date and time
of the issuance and sale of the Units pursuant to this Agreement shall be 12:00
noon, New York City time, on February 27, 2001, or such other time as may be
mutually agreed upon by the Company and the Purchasers purchasing Units. The
Closing shall occur at the offices of Klehr, Harrison, Xxxxxx, Xxxxxxxxx &
Xxxxxx, LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000. The
parties may attend such Closing in person or may exchange the necessary
documents by facsimile and overnight courier in accordance with Section 8(b)
hereof.
. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser severally represents and warrants to the Company as
follows:
. Investment Purpose. Purchaser is purchasing the Units for
Purchaser's own account for investment purposes only and not with a present view
towards the public sale or distribution thereof, except pursuant to sales that
are exempt from the registration requirements of the Securities Act and/or sales
registered under the Securities Act. Purchaser understands that Purchaser must
bear the economic risk of this investment indefinitely, unless the Securities
are registered pursuant to the Securities Act and any applicable state
securities or blue sky laws or an exemption from such registration is available,
and that the Company has no present intention of registering the resale of any
such Securities other than as contemplated by the Registration Rights Agreement.
Notwithstanding anything in this Section 2(a) to the contrary, by making the
representations herein, the Purchaser does not agree to hold the Securities for
any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from the registration requirements under the
Securities Act.
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. Accredited Investor Status. Purchaser is an "ACCREDITED INVESTOR" as
that term is defined in Rule 501(a) of Regulation D.
. Reliance on Exemptions. Purchaser understands that the Units are
being offered and sold to Purchaser in reliance upon specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of, and Purchaser's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of Purchaser to acquire the
Units.
. Information. Purchaser and its counsel, if any, have been furnished
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been
specifically requested by Purchaser or its counsel (excluding the SEC Documents
(as defined in Section 3(f) hereof)). Purchaser and its counsel have been
afforded the opportunity to ask questions of the Company and have received what
Purchaser believes to be satisfactory answers to any such inquiries. Neither
such inquiries nor any other investigation conducted by Purchaser or its counsel
or any of its representatives shall modify, amend or affect Purchaser's right to
rely on the Company's representations and warranties contained in Section 3
below. Purchaser understands that Purchaser's investment in the Securities
involves a high degree of risk.
. Governmental Review. Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
. Transfer or Resale. Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the sale or resale of the
Securities have not been and are not being registered under the Securities Act
or any state securities laws, and the Securities may not be transferred except
to permitted transferee as provided in Section 8(g) below and unless (a) the
resale of the Securities has been registered thereunder- or (b) Purchaser shall
have delivered to the Company an opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration; or (c) the
Securities are sold under Rule 144 promulgated under the Securities Act (or a
successor rule) ("RULE 144"); or (d) the Securities are sold or transferred to
an affiliate of Purchaser who agrees to sell or otherwise transfer the
Securities only in accordance with the provisions of this Section 2(f) and who
is an Accredited Investor; and (ii) neither the Company nor any other person is
under any obligation to register such Securities under the Securities Act or any
state securities laws (other than pursuant to the Registration Rights
Agreement). Notwithstanding the foregoing or anything else contained herein to
the contrary, the Securities may be pledged as collateral in connection with a
bona fide margin account or other lending arrangement.
. Legends. Purchaser understands that the Prepaid Warrants and
Incentive Warrants and, until such time as the Warrant Shares have been
registered under the Securities
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Act (including registration pursuant to Rule 416 thereunder) as contemplated by
the Registration Rights Agreement or otherwise may be sold by Purchaser under
Rule 144, the certificates for the Warrant Shares may bear a restrictive legend
in substantially the following form:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws of
any state of the United States. The securities represented hereby may
not be offered, sold, transferred or assigned in the absence of an
effective registration statement for the securities under applicable
securities laws unless offered, sold, transferred or assigned under an
available exemption from the registration requirements of those laws.
The legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security upon which it is
stamped, if, unless otherwise required by state securities laws, (a) the sale of
such Security is registered under the Securities Act (including registration
pursuant to Rule 416 thereunder) as contemplated by the Registration Rights
Agreement; (b) such holder provides the Company with an opinion of counsel, in
form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may
be made without registration under the Securities Act; or (c) such holder
provides the Company with reasonable assurances that such Security can be sold
under Rule 144. Purchaser agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, pursuant
to an effective registration statement or under an exemption from the
registration requirements of the Securities Act. In the event the above legend
is removed from any Security and thereafter the effectiveness of a registration
statement covering such Security is suspended or the Company determines that a
supplement or amendment thereto is required by applicable securities laws, then
upon reasonable advance notice to Purchaser the Company may require that the
above legend be placed on any such Security that cannot then be sold pursuant to
an effective registration statement or under Rule 144 and Purchaser shall
cooperate in the replacement of such legend. Such legend shall thereafter be
removed when such Security may again be sold pursuant to an effective
registration statement or under Rule 144.
. Authorization; Enforcement. This Agreement and the Registration
Rights Agreement have been duly and validly authorized, executed and delivered
on behalf of Purchaser and are valid and binding agreements of Purchaser
enforceable in accordance with their terms.
. Residency. Purchaser is a resident of the jurisdiction set forth
under such Purchaser's name on the Execution Page hereto executed by such
Purchaser.
. Acknowledgments Regarding Placement Agent. Purchaser acknowledges
that The Zanett Securities Corporation is acting as placement agent (the
"PLACEMENT AGENT") for the Securities being offered hereby and will be
compensated by the Company for acting in such capacity. Purchaser further
acknowledges that the Placement Agent has acted solely as placement agent in
connection with the offering of the Securities by the Company, that the
information and data provided to Purchaser and referred to in subsection (d)
above or otherwise in connection with the transactions contemplated hereby have
not been subjected to independent verification by the Placement Agent, and that
the Placement Agent makes no representation or
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warranty with respect to the accuracy or completeness of such information, data
or other related disclosure material. Purchaser further acknowledges that in
making its decision to enter into this Agreement and purchase the Securities it
has relied on its own examination of the Company and the terms of, and
consequences of holding, the Securities. Purchaser further acknowledges that the
provisions of this Section 2(j) are for the benefit of, and may be enforced by,
the Placement Agent.
. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser as follows:
. Organization and Qualification. The Company is a corporation duly
organized and existing in good standing under the laws of the jurisdiction in
which it is incorporated, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The Company is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted by it makes
such qualification necessary and where the failure so to qualify would have a
Material Adverse Effect. The Company has no subsidiaries. "MATERIAL ADVERSE
EFFECT" means any material adverse effect on (i) the Securities, (ii) the
ability of the Company to perform its obligations hereunder or under the Prepaid
Warrants, the Incentive Warrants or the Registration Rights Agreement or (iii)
the business, operations, properties, prospects or financial condition of the
Company taken as a whole.
. Authorization; Enforcement. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Prepaid Warrants, the Incentive Warrants and the
Registration Rights Agreement, to issue and sell the Units in accordance with
the terms hereof, and to issue the Warrant Shares upon exercise of the Prepaid
Warrants and the Incentive Warrants, as applicable, in accordance with the terms
of such Warrants; (ii) the execution, delivery and performance of this
Agreement, the Prepaid Warrants, the Incentive Warrants and the Registration
Rights Agreement by the Company and the consummation by it of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Prepaid Warrants and the Incentive Warrants and the issuance and reservation
for issuance of the Warrant Shares) have been duly authorized by the Company's
Board of Directors and no further consent or authorization of the Company, its
Board of Directors, any committee of the Board of Directors, or the Company's
stockholders is required (under Rules 4310(c)(25)(H) or 4460(i) promulgated by
the National Association of Securities Dealers ("NASD") or otherwise); (iii)
this Agreement has been duly executed and delivered by the Company; and (iv)
this Agreement constitutes, and, upon execution and delivery by the Company of
the Prepaid Warrants, the Incentive Warrants and the Registration Rights
Agreement, such agreements will constitute, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms.
. Capitalization. The capitalization of the Company as of the date
hereof, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Prepaid Warrants
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and the Incentive Warrants) exercisable or exchangeable for, or convertible
into, any shares of capital stock and the number of shares to be reserved for
issuance upon exercise of the Prepaid Warrants and the Incentive Warrants is set
forth on Schedule 3(c). All of such outstanding shares of capital stock have
been, or upon issuance in accordance with the terms of any such warrants,
options or preferred stock, will be, validly issued, fully paid and
non-assessable. None of the authorized but unissued shares of capital stock of
the Company (including the Warrant Shares) are subject to preemptive rights or
any other similar rights of the stockholders of the Company or any liens or
encumbrances created by the Company. Except for the Securities and as set forth
on Schedule 3(c), as of the date of this Agreement, (i) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exercisable or exchangeable for, any shares of capital stock of the Company, or
arrangements by which the Company is or may become bound to issue additional
shares of capital stock of the Company, and (ii) there are no agreements or
arrangements under which the Company is obligated to register the sale of any of
its or their securities under the Securities Act (except the Registration Rights
Agreement). Except as set forth on Schedule 3(c), there are no securities or
instruments containing antidilution or similar provisions that will be triggered
by the issuance of the Securities in accordance with the terms of this
Agreement, the Prepaid Warrants or the Incentive Warrants. The Company has
furnished to the Purchasers true and correct copies of the Company's Certificate
of Incorporation as in effect on the date hereof ("CERTIFICATE OF
INCORPORATION"), the Company's By-laws as in effect on the date hereof (the
"BY-LAWS"), and all other forms of instruments and agreements governing
securities convertible into or exercisable or exchangeable for capital stock of
the Company.
. Issuance of Warrant Shares. The Warrant Shares are duly authorized
and reserved for issuance, and, upon exercise of the Prepaid Warrants and the
Incentive Warrants, as applicable, in accordance with the terms thereof, will be
validly issued, fully paid and non-assessable, and free from all taxes, liens,
claims and encumbrances and will not be subject to preemptive rights or other
similar rights of stockholders of the Company and will not impose personal
liability upon the holder thereof.
. No Conflicts. The execution, delivery and performance of this
Agreement, the Warrants and the Registration Rights Agreement by the Company and
the consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and reservation for
issuance of the Warrant Shares) will not (i) result in a violation of the
Certificate of Incorporation or By-laws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment
(including, without limitation, the triggering of any anti-dilution provisions),
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party, or result in a violation of any law, rule, regulation,
order, judgment or decree (including U.S. federal and state securities laws and
regulations and rules or regulations of any self- regulatory organizations to
which the Company is subject) applicable to the Company or by which any property
or asset of the Company is bound or affected (except, with respect to clause
(ii), for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate,
have a Material Adverse Effect). The Company is not in violation of its
Certificate of Incorporation, By-laws or
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other organizational documents and the Company is not in default (and no event
has occurred which, with notice or lapse of time or both, would put the Company
in default) under, nor has there occurred any event giving others (with notice
or lapse of time or both) any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, except for actual or possible violations, defaults or rights as would
not, individually or in the aggregate, have a Material Adverse Effect. The
business of the Company is not being conducted, and shall not be conducted so
long as a Purchaser owns any of the Securities, in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations the sanctions for which either singly or in the aggregate would not
have a Material Adverse Effect. Except as specifically contemplated by this
Agreement and the Registration Rights Agreement, the Company is not required to
obtain any consent, approval, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or self
regulatory agency in order for it to execute, deliver or perform any of its
obligations under this Agreement, the Prepaid Warrants, the Incentive Warrants
or the Registration Rights Agreement, in each case in accordance with the terms
hereof or thereof. Except as set forth in Schedule 3(e), the Company is not in
violation of any of the requirements to have its shares of Common Stock eligible
for trading on the Nasdaq Over-the-Counter Bulletin Board (the "BULLETIN BOARD")
and does not reasonably anticipate that the Common Stock will be removed from
trading on the Bulletin Board for the foreseeable future.
. SEC Documents, Financial Statements. Since May 1, 1999, the Company
has timely filed (within applicable extension periods) all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT") (all of the foregoing and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to herein as the
"SEC DOCUMENTS"). As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act or the
Securities Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have been
amended or updated in subsequent filings
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made prior to the date hereof). As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC applicable with respect thereto. Such financial
statements have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP"), consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial statements
or the notes thereto, or (ii) in the case of unaudited interim statements, to
the extent they may not include footnotes or may be condensed or summary
statements) and fairly present in all material respects the consolidated
financial position of the Company as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to immaterial year-end audit adjustments).
Except as set forth in the financial statements of the Company included in the
SEC Documents filed prior to the date hereof or on Schedule 3(f) hereto, the
Company has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to the date of such
financial statements, (ii) liabilities not required by GAAP to be disclosed on a
balance sheet prepared in accordance with GAAP, and (iii) obligations under
contracts and commitments incurred in the ordinary course of business and not
required under GAAP to be reflected in such financial statements, which
liabilities and obligations referred to in clauses (i), (ii) and (iii),
individually or in the aggregate, are not material to the financial condition or
operating results of the Company.
. Absence of Certain Changes. Since May 1, 1999, there has been no
material adverse change and no material adverse development in the business,
properties, operations, prospects, financial condition or results of operations
of the Company, taken as a whole, except as disclosed in Schedule 3(g) or in the
SEC Documents filed prior to the date hereof.
. Absence of Litigation. Except as disclosed in the SEC Documents
filed prior to the date hereof, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of their respective
directors or officers in their capacities as such, which could reasonably be
expected to have a Material Adverse Effect. To the Company's knowledge, there
are no facts which, if known by a potential claimant or governmental authority,
could give rise to a claim or proceeding which, if asserted or conducted with
results unfavorable to the Company could reasonably be expected to have a
Material Adverse Effect.
. Intellectual Property. The Company owns or is licensed to use all
patents, patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, permits, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "INTANGIBLES") necessary for the conduct of
its business as now being conducted and as described in the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 2000. To the best of the
Company's knowledge, the Company does not infringe or is in conflict with any
right of any other person with respect to any Intangibles which, individually or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect. The Company
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has not received written notice of any pending conflict with or infringement
upon such third party Intangibles, which alleged pending conflict or alleged
infringement, if adversely determined, would result in a Material Adverse
Effect. Except as disclosed in the SEC Documents, the termination of the
Company's ownership of, or right to use, any single Intangible would not result
in a Material Adverse Effect on the Company. The Company has not entered into
any consent agreement, indemnification agreement, forbearance to xxx or
settlement agreement with respect to the validity of the Company's ownership or
right to use its Intangibles and, to the best knowledge of the Company, there is
no reasonable basis for any such claim to be successful. The Intangibles are
valid and enforceable and no registration relating thereto has lapsed, expired
or been abandoned or canceled or is the subject of cancellation or other
adversarial proceedings, and all applications therefor are pending and in good
standing. The Company has complied, in all material respects, with its
contractual obligations relating to the protection of the Intangibles used
pursuant to licenses. To the best knowledge of the Company, no person is
infringing on or violating the Intangibles owned or used by the Company.
. Foreign Corrupt Practices. Neither the Company, nor any director,
officer, agent, employee or other person acting on behalf of the Company has, in
the course of his actions for, or on behalf of, the Company, used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
. Disclosure. All information relating to or concerning the Company
set forth in this Agreement or provided to the Purchasers in writing or orally
by senior management of the Company pursuant to Section 2(d) hereof and
otherwise in connection with the transactions contemplated hereby is true and
correct in all material respects and the Company has not omitted to state any
material fact necessary in order to make the statements made herein or therein,
in light of the circumstances under which they were made, not misleading. No
event or circumstance known to the Company has occurred or exists with respect
to the Company or its business, properties, prospects, operations or financial
conditions, which has not been publicly disclosed but, under applicable law,
rule or regulation, would be required to be disclosed by the Company in a
registration statement filed on the date hereof by the Company under the
Securities Act with respect to the primary issuance of the Company's securities.
. Acknowledgment Regarding Purchasers' Purchase of the Units. The
Company acknowledges and agrees that none of the Purchasers or the Placement
Agent is acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement or the transactions
contemplated hereby, the relationship between the Company and the Purchasers and
the Placement Agent is "arms-length" and any statement made by any Purchaser or
the Placement Agent or any of their respective representatives or agents in
connection with this Agreement and the transactions contemplated hereby is not
advice or a recommendation and is merely incidental to such Purchaser's purchase
of Securities or such Placement Agent's role as a placement agent and has not
been relied upon by the Company, its officers or directors in any way. The
Company and each Purchasers further acknowledge that
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the Company's and each Purchaser's decision to enter into this Agreement has
been based solely on an independent evaluation by the Company and each
Purchaser, as the case may be, and their representatives.
. Form S-3 Eligibility. The Company is currently eligible to register
the resale of its Common Stock on a registration statement on Form S-3 under the
Securities Act. There exist no facts or circumstances known to the Company, that
would prohibit or delay the preparation and filing of a registration statement
on Form S-3 with respect to the Registrable Securities (as defined in the
Registration Rights Agreement).
. No General Solicitation. Neither the Company nor any person acting
for the Company, or any such distributor, has conducted any "general
solicitation," as such term is defined in Regulation D, with respect to any of
the Securities being offered hereby.
. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause this offering of
Securities to be integrated with any prior offering of securities of the Company
for purposes of the Securities Act or for purposes of any applicable stockholder
approval provisions, and, for purposes of the Securities Act, neither the
Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would require
registration of the Securities being offered hereby under the Securities Act.
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No Brokers. The Company has taken no action which would give rise to
any claim by any person for brokerage commissions, finder's fees or similar
payments by any Purchaser relating to this Agreement or the transactions
contemplated hereby, except for dealings with The Zanett Securities Corporation,
whose commissions and fees will be paid by the Company.
. Acknowledgment of Dilution. The number of Warrant Shares issuable
upon exercise of the Prepaid Warrants may increase in certain circumstances,
including the circumstance wherein the trading price of the Common Stock
declines. The Company's executive officers have studied and fully understand the
nature of the Securities being sold hereunder. The Company acknowledges that its
obligation to issue Warrant Shares upon exercise of the Prepaid Warrants in
accordance with the terms thereof is absolute and unconditional, regardless of
the dilution that such issuance may have on the ownership interests of other
stockholders. Taking the foregoing into account, the Company's Board of
Directors has determined in its good faith business judgment that the issuance
of the Prepaid Warrants hereunder and the consummation of the other transactions
contemplated hereby are in the best interests of the Company and its
stockholders.
. Title. The Company has good and marketable title in fee simple to
all real property and good and marketable title to all personal property owned
by it which is material to the business of the Company, in each case free and
clear of all liens, encumbrances and defects except such as
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are described in the Company's most recent 10-K filing or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company. Any
real property and facilities held under lease by the Company are held by it
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed to be
made of such real property and facilities by the Company.
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. Tax Status. Except as set forth on Schedule 3(s) and except to the
extent that the failure to do so would not have a Material Adverse Effect, the
Company has made or filed all foreign, federal, state and local income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject (unless and only to the extent that the Company has set
aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) and has paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. Except as set forth on Schedule 3(s), there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim. The Company has not executed a waiver with respect to any statute of
limitations relating to the assessment or collection of any federal, state or
local tax. Except as set forth on Schedule 3(s), none of the Company's tax
returns is presently being audited by any taxing authority.
. Environmental Laws. To the best of the Company's knowledge, the
Company (i) is in compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("ENVIRONMENTAL LAWS"), except where noncompliance with such
Environmental Laws would not constitute a Material Adverse Effect, (ii) has
received all permits, licenses or other approvals required of it under
applicable Environmental Laws which are legally required and material to the
conduct its business and (iii) is in compliance with all terms and conditions of
any such permit, license or approval. To the best of the Company's knowledge, no
contaminant, pollutant or toxic or hazardous waste has been generated, used,
treated, stored or disposed of at, or transported to or from, or released into
the air, soil, surface or ground waters by the Company at, on or under any real
property while such real property has been owned, leased, operated or used by
the Company which would constitute or give rise to a Material Adverse Effect.
The Company is not currently involved in and no person or entity has taken any
action or threatened or proposed to involve the Company in any environmental
clean-up or remediation or sought to expose the Company to contribution or
liability for such remediation.
. Regulatory Permits. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities which are material to the conduct of its business, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.
. No Other Agreements. The Company has not, directly or indirectly,
made any agreements with any Purchasers relating to the terms or conditions of
the transactions contemplated by this Agreement, the Registration Rights
Agreement, and the Warrants except as set forth in such documents.
. COVENANTS.
14
. Best Efforts. The parties shall use their best efforts timely to
satisfy each of the conditions described in Section 6 and Section 7 of this
Agreement.
. Form D: Blue Sky Laws. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof to each Purchaser promptly after such filing. The Company shall, on or
within ten days of the date of the Closing, take such action as the Company
shall reasonably determine is necessary to qualify the Securities for sale to
the Purchasers pursuant to this Agreement under applicable securities or "blue
sky" laws of the states of the United States or obtain exemption therefrom, and
shall provide evidence of any such action so taken to the Purchasers on or prior
to the date of the Closing.
. Reporting Status. So long as any Purchaser beneficially owns any of
the Securities, the Company shall timely file all reports required to be filed
with the SEC pursuant to the Exchange Act, and the Company shall not terminate
its status as an issuer required to file reports under the Exchange Act even if
the Exchange Act or the rules and regulations thereunder would permit such
termination. In addition, the Company shall take all actions necessary to
continue to be eligible to register the resale of its Common Stock on a
registration statement on Form S-3 under the Securities Act.
. Use of Proceeds. The Company shall use the proceeds from the sale of
the Securities for working capital and product development purposes.
. Expenses. Except as otherwise provided herein and in Section 5 of
the Registration Rights Agreement, each party hereto shall be responsible for
its own expenses incurred in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the other agreements
to be executed in connection herewith.
. Financial Information. The Company agrees to send to each Purchaser
until such Purchaser transfers, assigns or sells all of its Securities within
one (1) day after release, copies of all press releases issued by the Company
via e-mail in accordance with such Purchaser's instructions.
. Reservation of Shares. The Company shall at all times have
authorized and reserved for the purpose of issuance the number of shares of
Common Stock set forth in the Prepaid Warrants and the Incentive Warrants to
provide for the full exercise of the Prepaid Warrants and the Incentive Warrants
and the issuance of the Warrant Shares in connection therewith, subject to and
as otherwise required by the Prepaid Warrants and the Incentive Warrants.
. Listing. The Company shall promptly secure the listing of the
Warrant Shares upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance) and shall maintain, so long as any Purchaser (or
any of their affiliates) own any Securities, such listing of all Warrant Shares
from time to time issuable upon exercise of the Prepaid Warrants and the
Incentive Warrants. The Company will use all reasonable commercial efforts to
continue the trading of its
15
Common Stock on the Bulletin Board and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the NASD and such exchanges, as applicable. The Company shall promptly provide
to each holder of Prepaid Warrants and/or Incentive Warrants copies of any
notices it receives regarding the continued eligibility of the Common Stock for
trading on any securities exchange or automated quotation system on which
securities of the same class or series issued by the Company are then listed or
quoted, if any.
. Corporate Existence. So long as a Purchaser beneficially owns any
Securities, the Company shall maintain its corporate existence, and in the event
of a merger, consolidation or sale of all or substantially all of the Company's
assets, the Company shall ensure that the surviving or successor entity in such
transaction (i) assumes the Company's obligations hereunder and under the
Prepaid Warrants and Incentive Warrants and the agreements and instruments
entered into in connection herewith regardless of whether or not the Company
would have had a sufficient number of shares of Common Stock authorized and
available for issuance in order to effect the exercise in full of all Prepaid
Warrants and all Incentive Warrants outstanding as of the date of such
transaction and (ii) is a publicly traded corporation whose common stock is
listed for trading on the Bulletin Board, Nasdaq National Market, the New York
Stock Exchange, the American Stock Exchange or Nasdaq Small Cap Market.
Notwithstanding the provision contained in clause (ii) in the immediately
preceding sentence, the Company may enter into a merger, consolidation or sale
of substantially all of its assets with a non-publicly traded entity provided
the consideration received by the Company's stockholders in such transaction is
entirely in cash.
. No Integrated Offerings. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that would
require registration of the Securities being offered or sold hereunder under the
Securities Act or cause this offering of Securities to be integrated with any
other offering of securities by the Company for purposes of any stockholder
approval provision applicable to the Company or its securities.
. Legal Compliance. The Company shall conduct its business in
compliance with all laws, ordinances or regulations of governmental entities
applicable to such businesses, except where the failure to do so would not have
a Material Adverse Effect.
. Filing of Form 8-K. Within fifteen (15) days after the Closing, the
Company shall file a Current Report on Form 8-K or Quarterly Report on Form 10-Q
with the SEC describing the terms of the transactions contemplated by this
Agreement, the Registration Rights Agreement and the Warrants in the form
required by the Exchange Act.
. Short-Selling Restrictions. So long as a Purchaser holds Prepaid
Warrants, such Purchaser and its affiliates as provided below covenants and
agrees that it will conduct all transactions in the Common Stock in compliance
with applicable securities laws, and will not create any daily low trading price
in the Common Stock and will not sell or contract to sell shares of Common Stock
which it does not own at such time, provided, however, a Purchaser may sell
shares of Common Stock which will be issuable upon exercise of Prepaid Warrants
pursuant to a Notice of Exercise (as defined in the Prepaid Warrants) delivered
by such
16
Purchaser not later than twenty- four (24) hours after such Purchaser sells or
contracts to sell such shares of Common Stock, and provided, further, this
Section shall not apply to affiliates of a Purchaser holding less than 5% of the
Units sold pursuant to this Agreement who are not aware of the provisions hereof
or who are not selling or contracting to sell shares of Common Stock other than
in connection with a Notice of Exercise.
. Exercise of Option. The parties hereto acknowledge that the purchase
and sale of the Units hereunder does not represent any exercise by the
Purchasers of the option to purchase up to 3,500 units (the "OPTION") pursuant
to that certain Securities Purchase Agreement, dated as of September 7, 2000, by
and among the Company and the other signatories thereto (the "SECURITIES
PURCHASE AGREEMENT"). The parties further acknowledge that the terms of the
Option are hereby amended by this Agreement to the extent that such terms are
inconsistent with the terms set forth in the Securities Purchase Agreement. As
such, the Units purchasable pursuant to the exercise of the Option are the Units
described in recital Paragraph B hereto; provided, however, the Fixed Exercise
Price of the Prepaid Warrants purchasable under the Option shall be $2.00. In
addition, the parties also acknowledge that the Purchasers may exercise any or
all of the Option, as amended hereby, to purchase 3,500 Units during the Option
Exercise Period. The Option Exercise Period shall mean the period beginning on
the date hereof and ending on that date which is (i) two (2) years after the
date hereof or (ii) three (3) years after the date hereof in the event the
Company does not realize $4,500,000 or more of gross revenues for the fourth
quarter of fiscal year 2001 as reflected in its filing with the SEC.
. TRANSFER AGENT INSTRUCTIONS.
. The Company shall instruct its transfer agent to issue certificates,
registered in the name of each Purchaser or its nominee, for the Warrant Shares
in such amounts as specified from time to time by such Purchaser to the Company
upon exercise of the Prepaid Warrants and the Incentive Warrants, as applicable.
To the extent and during the periods provided in Section 2(f) and 2(g) of this
Agreement, all such certificates shall bear the restrictive legend specified in
Section 2(g) of this Agreement.
. The Company warrants that no instruction other than such
instructions referred to in this Section 5, and stop transfer instructions to
give effect to Section 2(f) hereof in the case of the transfer of the Warrant
Shares prior to registration of the Warrant Shares under the Securities Act or
without an exemption therefrom, will be given by the Company to its transfer
agent and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement
and the Registration Rights Agreement. Nothing in this Section shall affect in
any way each Purchaser's obligations and agreement set forth in Section 2(g)
hereof to resell the Securities pursuant to an effective registration statement
or under an exemption from the registration requirements of applicable
securities law, in accordance with the terms hereof.
. If a Purchaser provides the Company and the transfer agent with an
opinion of counsel, which opinion of counsel shall be in form, substance and
scope customary for opinions of counsel in comparable transactions, to the
effect that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from registration, or a Purchaser provides
17
the Company with reasonable evidence that such Securities may be sold under Rule
144, the Company shall permit the transfer, and, in the case of the Warrant
Shares, promptly instruct its transfer agent to issue one or more certificates
in such name and in such denominations as specified by such Purchaser.
. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The obligation of the Company hereunder to issue and sell the Units to a
Purchaser at the Closing hereunder is subject to the satisfaction, at or before
the Closing, of each of the following conditions thereto, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion. The obligation of the Company to issue and
sell the Units to any Purchaser hereunder is distinct and separate from its
obligation to issue and sell Units to any other Purchaser hereunder and any
failure by one or more Purchasers to fulfill the conditions set forth herein or
to consummate the purchase of Units hereunder will not relieve the Company of
its obligations with respect to any other Purchaser.
() The applicable Purchaser shall have executed the signature page to
this Agreement and the Registration Rights Agreement, and delivered the same to
the Company.
() The applicable Purchaser shall have delivered the Purchase Price for
the Units purchased at the Closing in accordance with Section 1(b) above.
() The representations and warranties of the applicable Purchaser shall
be true and correct as of the date when made and as of the date and time of the
Closing as though made at that time (except for representations and warranties
that speak as of a specific date, which representations and warranties shall be
true and correct as of such date), and the applicable Purchaser shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the applicable Purchaser at or prior to the date of the
Closing.
() No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.
. CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE.
The obligation of each Purchaser hereunder to purchase the Units to be
purchased by it at the Closing is subject to the satisfaction, at or before the
Closing, of each of the following conditions, provided that these conditions are
for such Purchaser's sole benefit and may be waived by such Purchaser at any
time in the Purchaser's sole discretion:
. The Company shall have executed this Agreement and the Registration
Rights Agreement, and delivered the same to such Purchaser or the Placement
Agent, acting on behalf of such Purchaser.
18
. The Company shall have delivered to such Purchaser the duly executed
Prepaid Warrants and Incentive Warrants (each in such denominations as such
Purchaser shall request at the Closing) being so purchased by such Purchaser at
the Closing in accordance with Section 1(b) above.
. The Common Stock shall not have been suspended from trading by the
SEC or NASD.
. The representations and warranties of the Company shall be true and
correct as of the date when made and as of the date of the Closing as though
made at that time (except for representations and warranties that speak as of a
specific date, which representations and warranties shall be true and correct as
of such date) and the Company shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Company at or
prior to the date of the Closing. Such Purchaser shall have received a
certificate, executed by the Chief Executive Officer of the Company, dated as of
the date of the Closing to the foregoing effect and as to such other matters as
may be reasonably requested by such Purchaser.
. No litigation, statute, rule, regulation, executive order, decree,
ruling, injunction, action or proceeding shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which questions the validity of, or challenges or
seeks to prohibit or prohibits the consummation of any of the transactions
contemplated by this Agreement.
. Such Purchaser shall have received an opinion of the Company's
counsel, dated as of the date of the Closing, in form, scope and substance
reasonably satisfactory to the Purchaser and in substantially the form of
Exhibit E attached hereto.
. The Company shall have delivered evidence reasonably satisfactory to
the Purchasers that the Company's transfer agent has agreed to act in accordance
with irrevocable instructions substantially in the form attached hereto as
Exhibit F.
. There shall have been no material adverse changes and no material
adverse developments in the business, properties, operations, prospects,
financial condition or results of operations of the Company, taken as a whole,
since the date hereof.
. The Board of Directors of the Company shall have adopted resolutions
consistent with Section 3(b)(ii) above and in a form reasonably acceptable to
such Purchaser.
. The Company shall have delivered to such Purchaser a certificate
evidencing the incorporation and good standing of the Company in the
Commonwealth of Virginia issued by the Secretary of State of the Commonwealth of
Virginia as of a date within ten (10) days of the Closing.
19
. The Company shall have delivered to such Purchaser a certified copy
of the Certificate of Incorporation as certified by the Secretary of State of
the Commonwealth of Virginia within ten days of the Closing.
. The Company shall have delivered to such Purchaser a secretary's
certificate, dated as of the Closing, as to (i) the resolutions described in
Section 7(i), (ii) the Certificate of Incorporation and (iii) the Bylaws, each
as in effect at the Closing.
. GOVERNING LAW; MISCELLANEOUS.
. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York. The Company and
each Purchaser irrevocably consents to the jurisdiction of the United States
federal courts located in the City of New York in the State of New York in any
suit or proceeding based on or arising under this Agreement and irrevocably
agrees that all claims in respect of such suit or proceeding may be determined
in such courts. The Company and each Purchaser irrevocably waive the defense of
an inconvenient forum to the maintenance of such suit or proceeding. The Company
and each Purchaser further agree that service of process mailed by first class
mail shall be deemed in every respect effective service of process in any such
suit or proceeding. Nothing herein shall affect the right of the Company or any
Purchaser to serve process in any other manner permitted by law. The Company and
each Purchaser agree that a final non- appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.
. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page(s)
to be physically delivered to the other party within five (5) days of the
execution hereof.
. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and supersedes all oral discussions
and prior dealings between the Parties. No provision of this Agreement may be
waived other than by an instrument in writing signed by the
20
party to be charged with enforcement and no provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and each
Purchaser.
. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier or confirmed telecopy, in each case addressed to a party. The addresses
for such communications shall be:
If to the Company:
FastComm Communications Corporation
00000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn.: Xxxxx X. Xxxxxx, President
with a copy simultaneously transmitted by like means to:
Xxxxxxx, Dunaud, Mercadier & Carreras, LLP
000 Xxxxxxxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attn.: Xxxxxx X. Xxxx, Esq.
If to any Purchaser, to such address set forth under such Purchaser's
name on the Execution Page hereto executed by such Purchaser.
Each party shall provide notice to the other parties of any change in
address.
. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Except as
provided herein or therein, neither the Company nor any Purchaser shall assign
this Agreement, the Registration Rights Agreement, the Prepaid Warrants or the
Incentive Warrants or any rights or obligations hereunder or thereunder.
Notwithstanding the foregoing, any Purchaser may assign its rights hereunder to
any of its "affiliates" (as that term is defined under the Exchange Act)
directors, officers, employees or immediate family members thereof who are
Accredited Investors without the consent of the Company (provided such assignees
agree to be bound by all of the terms and conditions hereof) (each, a "permitted
transferee"), or to any other person or entity with the consent of the Company,
which consent shall not be unreasonably withheld. This provision shall not limit
a Purchaser's right to transfer the Securities pursuant to the terms of the
Prepaid Warrants, the Incentive Warrants and this Agreement or to assign such
Purchaser's rights hereunder and/or thereunder to any such transferee.
21
. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person, except for the provisions of Section 2(j) and Section 3(l)
which are for the benefit of, and may be enforced by, the Placement Agent.
. Survival. The representations, warranties, agreements and covenants
of the Company set forth in Sections 3, 4, 5 and 8 hereof shall survive the
Closing hereunder notwithstanding any investigation conducted by or on behalf of
any Purchasers and the representations, warranties, covenants and agreements of
the Purchasers set forth in Section 2 and 8 hereof shall survive the Closing
hereunder notwithstanding any investigation conducted by or on behalf of the
Company. Moreover, none of the representations and warranties made by the
Company herein shall act as a waiver of any rights or remedies a Purchaser may
have under applicable federal or state securities laws. The Company agrees to
indemnify and hold harmless each Purchaser and each of such Purchaser's
officers, directors, employees, partners, members, agents and affiliates for
loss or damage arising as a result of or related to any breach by the Company of
any of its representations or covenants set forth herein, including advancement
of reasonable expenses as they are incurred.
. Publicity. The Company and the three Purchasers purchasing the three
most largest number of Units hereunder shall have the right to review before
issuance any press releases, SEC or NASD filings, or any other public statements
with respect to the transactions contemplated hereby; provided, however, that
the Company shall be entitled, without the prior review of such three
Purchasers, to make any press release or SEC or NASD filings with respect to
such transactions as is required by applicable law and regulations (although
such three Purchasers shall be consulted by the Company in connection with any
such press release and filing prior to its release and shall be provided with a
copy thereof) and such press release shall not name any of the Purchasers.
. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
. Termination. In the event that the Closing shall not have occurred
on or before March 6, 2001, unless the parties agree otherwise, this Agreement
shall terminate at the close of business on such date. Notwithstanding any
termination of this Agreement, any party not in breach of this Agreement shall
preserve all rights and remedies it may have against another party hereto for a
breach of this Agreement prior to or relating to the termination hereof.
. Joint Participation. Each party to this Agreement has participated
in the negotiation of this Agreement, the Prepaid Warrants, the Incentive
Warrants and the Registration Rights Agreement. As such, the language used
herein and therein shall be deemed to be the language chosen by the parties
hereto to express their mutual intent, and no rule of strict construction will
be applied against any party to this Agreement.
22
. Equitable Relief. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to a Purchaser by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations hereunder (including, but not limited to, its obligations pursuant
to Section 5 hereof) may be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement (including,
but not limited to, its obligations pursuant to Section 5 hereof), that a
Purchaser shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and transfer
of the Securities, without the necessity of showing economic loss and without
any bond or other security being required.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
23
IN WITNESS WHEREOF, the undersigned Purchaser and the Company have caused
this Agreement to be duly executed as of the date first above written.
FASTCOMM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
PURCHASER:
THE ZANETT LOMBARDIER MASTER FUND, L.P.
By:
-----------------------------------------
Name:
Title:
RESIDENCE: Cayman Islands
ADDRESS: x/x Xxxxxxx Xxxxxxx (Xxxxxx) Ltd.
Caledonian House, P.O. Box 1100
Georgetown, Grand Cayman
Cayman Islands
with copies of all notices to:
c/o The Zanett Securities Corporation
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
SUBSCRIPTION AMOUNT
Number of Units: 850
Purchase Price ($1,000 per Unit): $850,000
