EX-10.91
COMMON STOCK PIPES PURCHASE AGREEMENT
THIS COMMON STOCK PIPES PURCHASE AGREEMENT (the "Agreement") is made
as of July 25, 2001, 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:
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
Investor and each Investor shall purchase from the Company, on the date of the
Closing (as defined in Section 1.2 below), at $0.79 per share (the "Share
Price"), 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 $0.79
(the "Shares"). The Investors acknowledge that this transaction and its pricing
are before, and do not reflect, the Company's proposed reverse stock split. The
parties acknowledge that the public market trading price of Common Stock is
below $0.79. The parties further acknowledge that the Investors' decision to
purchase at the Share Price is based upon the pro forma calculation of Adjusted
Net Tangible Book Value ("NTBV") per share shown on Exhibit N ("Exhibit N") to
the Disclosure Schedule. The parties agree that pro forma NTBV per share will be
recalculated (the "Revised NTBV") using the same formula as shown on Exhibit N
but using the information contained in the unaudited June 30, 2001 balance sheet
in P-COM's Form 10-Q (including any amendments thereto or restatements thereof
before March 31, 2002) for the period ending June 30, 2001; for purposes of such
recalculation, the $19,338,000 figure for discounted Convertible Subordinated
Notes shown on Exhibit N shall remain unchanged and Revised NTBV shall be
rounded up to the next highest cent. The number of shares issued to the
Investors pursuant to this Agreement shall thereafter be corrected as follows:
(A) if the Revised NTBV per share is less than the Share Price, P-COM shall
promptly issue to each Investor that number of shares of Common Stock equal to
the difference between (i) the number of shares issued to the Investor pursuant
to this Agreement at Closing and (ii) the 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 Revised NTBV per share; (B) if the Revised NTBV per
share is greater than the Share Price, each Investor shall promptly return to
P-COM that number of shares of Common Stock equal to the difference between (i)
the number of shares issued to the Investor pursuant to this Agreement at
Closing and (ii) the 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 Revised NTBV per share. The term "Shares" as used in
this Agreement includes any additional shares of Common Stock issued to the
Investors by reason of the foregoing recalculation. P-COM warrants that the
unaudited June 30, 2001 balance sheet in its Form 10-Q for the period ending
June 30, 2001 (including any amendments thereto or restatements thereof) will be
accurate and complete in all material respects and will fairly present the
financial condition of the Company as of June 30, 2001 and be prepared in
accordance with GAAP, consistently applied, except that it may not be
accompanied by all footnotes required by GAAP and will be subject to normal
year-end audit adjustments.
1.2 Closing. The purchase and sale of the Shares shall take place at
9:00 a.m. Pacific Daylight Time on July 31, 2001, at the offices of Xxxxxxx,
Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, 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 by each Investor of the quantity of funds indicated adjacent to such
Investor's name on Schedule A by wire transfer to the Company.
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 (excluding RT Masts Ltd.) as listed in
its most recent Annual Report on Form 10-K for the year ended December 31, 2000
(the "Annual Report") filed with the Securities and Exchange Commission (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
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
consists of:
(a) Preferred Stock. 2,000,000 shares of Preferred Stock, $.0001
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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
July 25, 2001.
(b) Common Stock. 145,000,000 shares of Common Stock, $.0001 par
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value, of which 80,740,176 shares were issued and outstanding as of July 25,
2001.
(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, 2000, the Company has not issued any
shares of Common Stock or Preferred Stock except in connection with the exercise
of outstanding options. 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
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,
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 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, 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. Assuming the truth and accuracy of the representations
made by the Investors, the offer, sale and issuance of the Common Stock 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.
2.6 No Conflict. 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 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
report on Form 10-Q for the quarter ended March 31, 2001 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 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
Schedule or in the SEC Reports, between March 31, 2001 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.
In addition, no person or entity from which, as at June 30, 2001, the
Company had accounts receivable with a net carrying value of at least $1,000,000
was at June 30, 2001 or is now in bankruptcy proceedings as a result of filing a
voluntary bankruptcy petition or having an involuntary bankruptcy petition filed
against him/it.
2.9 Government Consent, etc. No consent, approval or authorization of
or designation, declaration or filing with any governmental authority or any
other person or entity on the part of the Company is required in connection with
the valid execution and delivery of this Agreement, or the offer, sale or
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
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
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. The Company
represents, warrants and covenants that to the best of its knowledge no officer
or employee of any Investor shall 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
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
malfeasance of which a director or executive officer of the Company is the
subject (excluding minor offenses). The Company is not a plaintiff in any
material proceedings (other than others' bankruptcy proceedings) except a
lawsuit for approximately $1,500,000 filed against Technosystem and Banca di
Roma.
2.14 Investment Company. The Company represents and warrants that it
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 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
(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
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 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
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
(although the Company has covenanted in Section 4.1 to file for and use its best
efforts to obtain such registration, by certain specified dates). 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.
4. Covenants.
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4.1 Registration of Shares
(a) The Company shall, before April 12, 2002, prepare and file
with the SEC a registration statement on Form S-3 under the Securities Act
covering the resale of the Shares by any Investor (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 by April 25, 2002. 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 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 to be listed on any 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 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.
(d) During the effectiveness of the Registration Statement, the
Company shall promptly notify the Investors of the happening of any event or
other 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 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 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 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.
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a. 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.
b. 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 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.
c. 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,
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.
d. 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 parties
in connection with the losses suffered, as well as any other relevant equitable
considerations.
(g) The Company shall cooperate with the Investors to facilitate
the timely preparation and delivery of certificates representing the 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 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 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 an
Investor 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 Xxxxxxx, Xxxxxxx & Xxxxxxxx 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 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, 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 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.
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 owned
by them.
(b) Provide a transfer agent and registrar for all Common Stock
registered pursuant hereunder and a CUSIP number for all such Common Stock, in
each case not later than the effective date of such registration.
5. Conditions of the Investors' Obligations at Closing. The obligations of
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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 2
shall be true in all material respects as of the date of this Agreement and 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 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.
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 and 5.7 have been
satisfied.
5.4 Opinion of Counsel. There shall have been delivered to each Investor an
opinion of Xxxxxxx, Phleger & Xxxxxxxx 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.
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.
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.
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.
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 (except as provided in Section 1.1 above) such
representations and warranties need only be accurate as of the date of such
execution and delivery and as of the date of the Closing.
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. In any litigation arising from the transactions contemplated by this
Agreement, the prevailing party shall be entitled to recover its reasonable
attorney fees and expenses for the litigation.
7.9 Finders' Fees. The Company will hold the Investors harmless from all
finders' or brokers' fees in connection with the sale of the Shares to the
Investors.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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/ Xxxxx X. Xxxxxxx
--------------------------------
Title: President and CEO
-----------------------------
Address: 0000 X. Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
INVESTORS:
XXXXXX McBAINE INTERNATIONAL, a
Cayman Islands corporation
By: /s/ Xxxxxx X. Xxxxx-Xxxxxx
--------------------------------
Title:
-----------------------------
Address: c/o Gruber McBaine Investment
Advisors
00 Xxxxxx Xxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
LAGUNITAS PARTNERS, L.P.
By: /s/ Xxxxxx X. Xxxxx-Xxxxxx
--------------------------------
Title:
-----------------------------
Address: c/o Gruber McBaine Investment
Advisors
00 Xxxxxx Xxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
[SIGNATURE PAGE TO COMMON STOCK PIPES PURCHASE AGREEMENT]
SCHEDULE A
Investor Address Investment Shares
-------- ------- ---------- ------
Xxxxxx XxXxxxx International, a c/o Gruber McBaine Investment $ 750,000 949,367
Cayman Islands corporation Advisors
00 Xxxxxx Xxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
Lagunitas Partners, L.P. c/o Gruber XxXxxxx Investment $2,250,000 2,848,101
Advisors
00 Xxxxxx Xxxxx, Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxx
---------- ---------
$3,000,000 3,797,468
Schedule A
EXHIBIT A
July 31, 2001
To the Investors listed on
Schedule A to the Common
Stock PIPES Purchase Agreement dated July 25, 2001
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 3,797,468 shares
of its common stock, par value $.0001 per share, pursuant to the Common Stock
PIPES Purchase Agreement dated July 25, 2001 (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; and (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.
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 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 delivered in connection therewith, 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
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.
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.
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, (a) principles requiring the consideration of the
impracticability or impossibility of performance of the Company's obligations at
the time of the attempted enforcement of such obligations, and (b) 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 or the Exon-Xxxxxx Amendment.
(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 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 the effect of Sections 1203 and 1102(3) of
the California Uniform Commercial Code or any other California law, federal law
or equitable principle, providing for an obligation of good faith in the
performance or enforcement of contracts and prohibiting disclaimer of such
obligation.
(H) Our opinions in paragraphs 4 and 5 above are limited to laws and
regulations normally applicable to transactions of the type contemplated in the
Stock Purchase Agreement and do not extend to licenses, permits and approvals
necessary for the conduct of the Company's business. In addition and without
limiting the previous sentence, we express no opinion herein with respect to the
effect of any land use, safety, hazardous material, environmental or similar
law, or any local or regional law. Further, we express no opinion as to the
effect of or compliance with any state or federal laws or regulations applicable
to the transactions contemplated by the Stock Purchase Agreement because of the
nature of the business of any party thereto other than the Company. Also, we
express no opinion with respect to any patent, copyright, trademark or other
intellectual property matter, or as to the statutes, regulations, treaties or
common laws of any nation, state or jurisdiction with regard thereto.
(I) In connection with our opinion in paragraph 4 relating to the material
agreements specifically identified in the SEC Reports, we have not reviewed, and
express no opinion on, (i) financial covenants or similar provisions requiring
financial calculations or determinations to ascertain whether there is any such
conflict or (ii) provisions relating to the occurrence of a "material adverse
event" or words of similar import. In 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. Moreover, to the extent
that any of the material agreements specifically identified in the SEC Reports
are governed by the laws of any jurisdiction other than the State of California
our opinion relating to those agreements is based solely upon the plain meaning
of their language without regard to interpretation or construction that might be
indicated by the laws governing those agreements.
(J) We express no opinion as to your compliance with any Federal or state
law relating to your legal or regulatory status or the nature of your business.
(K) 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.
(L) 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.
(M) 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,
XXXXXXX, XXXXXXX & XXXXXXXX LLP
EXHIBIT B
_____________, 2002
To the Investors listed on
Schedule A to the Common
Stock PIPES Purchase Agreement dated July 25, 2001
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 July 25, 2001 (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-3 (File No. 333-____________)
initially filed by the Company with the SEC on ____________, 2002, 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
_____________, 2002; Amendment No. 2 to such Registration Statement filed with
the SEC on _____________, 2002; and oral advice on ______________, 2002, 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 _____________,
2002.
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 _________ , 2002 and (b) oral
advice received on ___________, 2002 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:
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,
XXXXXXX, PHLEGER & XXXXXXXX LLP
