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Exhibit 10.1
AMENDMENT
TO
SECURITIES PURCHASE AGREEMENT
AMENDMENT TO SECURITIES PURCHASE AGREEMENT (this "AMENDMENT") dated as of
May 11, 2001, among AirNet Communications Corporation, a Delaware corporation
(the "COMPANY"), and Tandem PCS Investments, L.P., Mellon Ventures, L.P. and SCP
Private Equity Partners II, L.P. (collectively, the "PURCHASERS").
WHEREAS, the common stock of the Company is listed on, and is governed by
the rules of, the Nasdaq Stock Market, Inc. ("NASDAQ");
WHEREAS, the Company and the Purchasers wish to amend Exhibit A, the Form
of Certificate of Designation, to the Securities Purchase Agreement among the
Company and the Purchasers dated as of April 2, 2001 (the "AGREEMENT"), to
address comments received from Nasdaq relating to Rule 4351 of the Nasdaq
Marketplace Rules; and
WHEREAS, the Company intends to use its best efforts to amend the
Certificate of Incorporation to provide that the holders of Series B Preferred
Stock will be entitled to elect two of the Company's nine directors;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Amendment, the parties agree as follows:
1. Exhibit A to the Agreement shall be amended and restated as set forth in
Exhibit 1 to this Amendment.
2. Section 6.13 of the Agreement shall be amended by adding the following
sentence to the end of said Section 6.13:
"The Company shall use its best efforts to amend the Certificate of
Incorporation to provide that the holders of Series B Preferred Stock will
be entitled to elect two of the Company's nine directors."
3. Except as modified by this Amendment, the Agreement shall remain in full
force and effect.
4. Capitalized terms used but not otherwise defined in this Amendment shall
have the meanings given to such terms in the Agreement.
5. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
COMPANY:
AIRNET COMMUNICATIONS CORPORATION
By: /s/ R. Xxx Xxxxxxx, Xx.
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Name: R. Xxx Xxxxxxx, Xx.
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Title: President & CEO
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PURCHASERS:
TANDEM PCS INVESTMENTS, L.P.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: Vice President
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By: /s/ Xxxx X. XxXxxxxx
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Name: Xxxx X. XxXxxxxx
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Title: Vice President and Secretary
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MELLON VENTURES, L.P.
By: MVMA, L.P., its General Partner
By: MVMA, Inc., its General Partner
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Associate
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SCP PRIVATE EQUITY PARTNERS II. L.P.
By:SCP PRIVATE EQUITY II GENERAL
PARTNER, L.P.
By:SCP PRIVATE EQUITY II GENERAL
PARTNER, LLC, its Manager
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Manager
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EXHIBIT 1
FORM OF CERTIFICATE OF DESIGNATION
(SEE APPENDIX C)
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SECURITIES PURCHASE AGREEMENT
AMONG
AIRNET COMMUNICATIONS CORPORATION
AND
THE SEVERAL PURCHASERS NAMED IN SCHEDULE 2.1
Dated as of April 2, 2001
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TABLE OF CONTENTS
List of Exhibits........................................................... iii
List of Schedules.......................................................... iii
ARTICLE I Definitions..................................................... 1
ARTICLE II Sale and Purchase of Purchased Securities...................... 3
Section 2.1. Sale and Purchase of Purchased Securities................... 3
Section 2.2. Closings.................................................... 4
Section 2.3. Use of Proceeds............................................. 4
Section 2.4. Consummation of Transactions................................ 4
ARTICLE III Representations and Warranties of the Company................. 5
Section 3.1 Organization and Qualification.............................. 5
Section 3.2 Authorization; Enforcement.................................. 5
Section 3.3 Intentionally Omitted....................................... 5
Section 3.4 Capitalization.............................................. 5
Section 3.5 Issuance of Shares.......................................... 6
Section 3.6 No Conflicts................................................ 6
Section 3.7 SEC Documents, Financial Statements......................... 7
Section 3.8 Absence of Certain Changes.................................. 7
Section 3.9 Absence of Litigation....................................... 7
Section 3.10 Intellectual Property....................................... 8
Section 3.11 Foreign Corrupt Practices................................... 8
Section 3.12 Disclosure.................................................. 8
Section 3.13 Acknowledgment Regarding Purchasers' Purchase of the 8
Purchased Securities........................................
Section 3.14 Listing..................................................... 9
Section 3.15 Form S-3 Eligibility........................................ 9
Section 3.16 No General Solicitation..................................... 9
Section 3.17 No Integrated Offering...................................... 9
Section 3.18 No Brokers.................................................. 9
Section 3.19 Securities Laws............................................. 9
Section 3.20 Title....................................................... 9
Section 3.21 Tax Status.................................................. 9
Section 3.22 Environmental Matters....................................... 10
Section 3.23 Insurance................................................... 10
Section 3.24 Compliance with Laws........................................ 10
Section 3.25 Interested Party Transactions............................... 10
ARTICLE IV Purchasers' Representations.................................... 11
Section 4.1. Investment Intent........................................... 11
Section 4.2. Authorization............................................... 11
Section 4.3. Enforceability.............................................. 11
Section 4.4. Exemption................................................... 11
Section 4.5. Experience.................................................. 11
Section 4.6. Restrictions on Resale...................................... 11
Section 4.7 Legends..................................................... 12
ARTICLE V Conditions to the Purchaser's Obligations to Purchase at the
Closing.................................................................. 12
Section 5.1. Related Agreements.......................................... 12
Section 5.2. Charter Documents; Good Standing Certificates............... 13
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Section 5.3. Proof of Corporate Action................................... 13
Section 5.4. Incumbency Certificate...................................... 13
Section 5.5. Legal Opinion............................................... 13
Section 5.6. Legality; Governmental and Other Authorizations............. 13
Section 5.7. Payment of Certain Fees and Disbursements................... 13
Section 5.8. Delivery of Purchased Securities............................ 13
Section 5.9. General..................................................... 13
Section 5.10. Shareholder Approval........................................ 13
Section 5.11. Minimum Offering............................................ 13
Section 5.12 Filing of Certificate of Designation........................ 14
Section 5.13 Auditors Report............................................. 14
Section 5.14 Information Rights.......................................... 14
ARTICLE VI Covenants...................................................... 14
Section 6.1 Form D; Blue Sky Laws....................................... 14
Section 6.2 Reporting Status............................................ 14
Section 6.3 Use of Proceeds............................................. 14
Section 6.4 Expenses.................................................... 14
Section 6.5 Financial Information....................................... 14
Section 6.6 Reservation of Shares....................................... 14
Section 6.7 Listing..................................................... 15
Section 6.8 Corporate Existence......................................... 15
Section 6.9 No Integrated Offerings..................................... 15
Section 6.10 Legal Compliance............................................ 15
Section 6.11 Registration on Form S-3.................................... 15
Section 6.12 Conduct of Business......................................... 15
Section 6.13. Board Seats................................................. 16
Section 6.14. Subsequent Offering......................................... 16
ARTICLE VII Transfer Agent Instructions................................... 16
ARTICLE VIII Conditions to the Company's Obligations...................... 16
Section 8.1. Related Agreements.......................................... 16
Section 8.2. Representations and Warranties; Satisfaction of Conditions; 17
Officer's Certificate.......................................
Section 8.3. Legality; Governmental and Other Authorizations............. 17
ARTICLE IX Subsequent Holders of Purchased Securities..................... 17
ARTICLE X Indemnity....................................................... 17
Section 10.1. Indemnification............................................. 17
Section 10.2. Transaction Costs........................................... 17
Section 10.3. Procedures.................................................. 18
Section 10.4. Survival of Obligations..................................... 18
ARTICLE XI Notices........................................................ 18
ARTICLE XII Termination; Survival......................................... 19
Section 12.1. Termination................................................. 19
Section 12.2. Effect of Termination....................................... 20
Section 12.3. Survival.................................................... 20
ARTICLE XIII Amendments and Waivers....................................... 20
ARTICLE XIV Choice of Law; Submission to Jurisdiction and Waiver of Jury
Trial.................................................................... 20
Section 14.1. Governing Law............................................... 20
Section 14.2. Equitable Remedies.......................................... 20
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ARTICLE XV Confidentiality; Right to Publicize............................ 21
ARTICLE XVI Entire Agreement; Counterparts; Section Headings.............. 21
LIST OF EXHIBITS
EXHIBIT A Form of Certificate of Designation
EXHIBIT B Registration Rights Agreement and form of Counterpart
Signature Pages
EXHIBIT C Form of Warrant
EXHIBIT D Form of Company Counsel Opinion
EXHIBIT E Form of Escrow Agreement
EXHIBIT F Form of Management Rights Letter/SCP
EXHIBIT G Form of Investor Rights Letter/Tandem
EXHIBIT H Form of Investor Rights Letter/Mellon
LIST OF SCHEDULES
Schedule 2.1 Purchased Securities
Schedule 3.4 Capitalization
Schedule 3.9 Litigation
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "AGREEMENT") dated as of April 2,
2001 among AirNet Communications Corporation, a Delaware corporation (the
"COMPANY"), and The Several Purchasers Named In Schedule 2.1, as amended and
supplemented from time to time (each a "PURCHASER" and collectively, the
"PURCHASERS").
WHEREAS, the Company wishes to issue and sell to the Purchasers shares of
the Company's authorized but unissued Series B Convertible Preferred Stock,
$0.01 par value per share (the "PREFERRED SHARES") and warrants to purchase
shares of the Company's authorized but unissued Common Stock, $0.001 par value
per share (the "WARRANTS" and, together with the Preferred Shares, collectively
the "PURCHASED SECURITIES"); and
WHEREAS, the Purchasers, severally and not jointly, wish to purchase the
Purchased Securities on the terms and subject to the conditions set forth in
this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement the following terms shall have the
meanings set forth in this Article I:
"AFFILIATE" means, as applied to the Company or any other specified
Person, any Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Company (or other
specified Person). For purposes of this definition, "CONTROL" (including
the terms "CONTROLLING" and "CONTROLLED") means the power to direct or
cause the direction of the management and policies of a Person, directly or
indirectly, whether through the ownership of securities or partnership or
other ownership interests, by contract or otherwise. Notwithstanding the
foregoing, no Purchaser shall be considered an "AFFILIATE" of the Company
under this Agreement.
"BLUE SKY FILINGS" has the meaning specified in SECTION 3.5 of this
Agreement.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a legal
holiday in Miami, Florida or any other day on which commercial banks in
such State are authorized by law or government decree to close.
"CAPITAL SECURITIES" means, as to any Person that is a corporation,
the authorized shares of such Person's capital stock, including all classes
of common, preferred, voting and nonvoting capital stock, and, as to any
Person that is not a corporation or an individual, the ownership shares in
such Person, including, without limitation, the right to share in profits
and losses, the right to receive distributions of cash and property, and
the right to receive allocations of items of income, gain, loss, deduction
and credit and similar items from such Person, whether or not such shares
include voting or similar rights entitling the holder thereof to exercise
control over such Person.
"CERTIFICATE OF DESIGNATION" means the Series B Convertible Preferred
Stock Certificate of Designation, as filed with the Delaware Secretary of
State on or before the Closing Date, in the form of EXHIBIT A hereto.
"CHARTER" means, as to a corporation, the articles or certificate of
incorporation, as to a general or limited partnership, the joint venture or
partnership agreement or articles or other organizational document, as to a
limited liability company, the operating or limited liability company
agreement or articles or certificate of formation, and as to any other
Person other than an individual, any statute, articles or other
organizational document, each as from time to time amended or modified.
"CLOSING" has the meaning specified in SECTION 2.2 of this Agreement.
"CLOSING DATE" has the meaning specified in SECTION 2.2 of this
Agreement.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMON STOCK" has the meaning specified in SECTION 3.4 of this
Agreement.
"COMPANY" has the meaning specified in the introduction to this
Agreement.
"CONSENTS" means all consents and approvals of Governmental
Authorities or other third parties necessary to authorize, approve or
permit the Person indicated to consummate the transactions contemplated
hereby.
"CONVERTIBLE SECURITIES" means securities, obligations, rights,
agreements or arrangements that are exercisable for, convertible into or
exchangeable for shares of Common Stock. The term includes the Purchased
Securities, and any options, warrants or other rights to subscribe for or
purchase Common Stock or to subscribe for or purchase other Capital
Securities or obligations that are, directly or indirectly, convertible
into or exchangeable for Common Stock.
"DAMAGES" has the meaning specified in SECTION 8.1 of this Agreement.
"ESCROW AGREEMENT" means the Closing Escrow Agreement dated as of the
date hereof among the Company, the Purchasers and SunTrust Bank, as Escrow
Agent, in the form of EXHIBIT E hereto.
"GOVERNMENTAL AUTHORITY" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government (foreign, federal,
local or otherwise) and shall include any international regulatory or trade
body or organization.
"INDEMNITEE" has the meaning specified in SECTION 8.1 hereof.
"LAW" means applicable common law and any statute, ordinance, code or
other law, rule, permit, permit condition, regulation, order, decree,
technical or other standard, requirement or procedure enacted, adopted,
promulgated, applied or followed by any Governmental Authority.
"LICENSE" means a license, permit, certificate of authority, waiver,
approval, certificate of public convenience and necessity, registration or
other authorization, consent or clearance to transact an activity or
operate a business, or to use an asset or process, in each case issued or
granted by a Governmental Authority.
"LIEN" means (a) any encumbrance, mortgage, pledge, lien, charge or
other security interest of any kind upon any property or assets of any
character, or upon the income or profits therefrom; (b) any acquisition of
or agreement to have an option to acquire any property or assets upon
conditional sale or other title retention agreement, device or arrangement
(including a capitalized lease); or (c) any sale, assignment, pledge or
other transfer for security of any accounts, general intangibles or chattel
paper, with or without recourse.
"MATERIAL ADVERSE EFFECT" means (a) an adverse effect on the validity
or enforceability of this Agreement or any of the Related Agreements in any
material respect, (b) a material adverse effect on the condition (financial
or other), business, results of operations, ability to conduct business,
properties or prospects of the indicated Person (and its subsidiaries, if
any), or (c) an impairment of the ability of the indicated Person (and its
subsidiaries, if any) to fulfill its obligations under this Agreement or
any of the Related Agreements in any material respect.
"PERSON" means an individual, partnership, limited liability company,
corporation, association, trust, joint venture, unincorporated
organization, and any government, governmental department or agency or
political subdivision thereof.
"PREFERRED SHARES" has the meaning specified in the Recitals to this
Agreement.
"PURCHASED SECURITIES" has the meaning specified in the Recitals to
this Agreement.
"PURCHASERS" has the meaning specified in the introduction to this
Agreement.
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"REGISTRATION RIGHTS AGREEMENT" means the existing Second Amended and
Restated Agreement Among Series E, Series F and Series G Preferred
Stockholders and Senior Registration Rights Agreement dated as of September
7, 1999 among the Company and the Persons named therein, and the
counterpart signature pages to be signed by the Company and the Purchasers,
each in the form of EXHIBIT B hereto.
"RELATED AGREEMENTS" means the Warrants, the Registration Rights
Agreement and the Certificate of Designation.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Securities
and Exchange Commission thereunder, all as the same shall be in effect at
the time.
"SECURITIES AND EXCHANGE COMMISSION" includes any governmental body or
agency succeeding to the functions thereof.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"TAXES" or "TAX" means (a) all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits taxes, or other taxes of any kind
whatsoever, together with any interest and any penalties, additions to tax
or additional amounts imposed by any taxing authority (domestic or foreign)
upon the Company with respect to all periods or portions thereof ending on
or before the date hereof and/or (b) any liability of the Company for the
payment of any amounts of the type described in the immediately preceding
clause (a) as a result of being a member of an affiliated or combined
group.
"TRANSACTION COSTS" means any and all costs, fees and expenses
incurred by the Company or any of the Purchasers in connection with the
transactions contemplated herein, including reasonable hourly fees and
disbursements of attorneys and accountants for the Purchasers.
"WARRANTS" has the meaning specified in the Recitals to this
Agreement, which shall be issued in the form of EXHIBIT C hereto.
When a reference is made in this Agreement to an Article or a Section, such
reference shall be to an Article or a Section of this Agreement unless otherwise
indicated. Unless the context otherwise requires, the terms defined hereunder
shall have the meanings therein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms defined
herein. Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The use of a gender herein shall be deemed to include the neuter,
masculine and feminine genders whenever necessary or appropriate. Whenever the
word "herein" or "hereof" is used in this Agreement, it shall be deemed to refer
to this Agreement and not to a particular Section of this Agreement unless
expressly stated otherwise.
ARTICLE II
SALE AND PURCHASE OF PURCHASED SECURITIES
SECTION 2.1. Sale and Purchase of Purchased Securities. Subject to all of
the terms and conditions hereof and in reliance on the representations and
warranties set forth herein, including, without limitation, the satisfaction by
the Company of the conditions set forth in Article VI hereof, the Company agrees
to issue and sell to each Purchaser and each Purchaser, severally, and not
jointly, agrees to purchase from the Company, (x) at a price of $31.40 per
share, that number of Preferred Shares set forth opposite the name of such
Purchaser on SCHEDULE 2.1 hereto, each Preferred Share convertible, initially,
into ten (10) shares of Common Stock at an initial conversion price of $3.14 per
share, and (y) Warrants to purchase, at an exercise price of $3.14 per share,
that number of shares of Common Stock set forth opposite the name of such
Purchaser on SCHEDULE 2.1 for a price of $100.00 in the aggregate (which price
will be reported by such Purchaser as the
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purchase price for such Warrants for federal, state and local tax purposes). The
sale of the Purchased Securities, as set forth opposite the name of each
Purchaser on SCHEDULE 2.1 hereto to each Purchaser at the Closing shall
constitute a separate sale hereunder.
SECTION 2.2. Escrow; Closing.
(a) The aggregate purchase price payable by each Purchaser shall be
deposited by such Purchaser on the date of this Agreement into an escrow account
("ESCROW ACCOUNT") maintained under the Escrow Agreement; provided, however,
that the obligation of SCP Private Equity Partners II, L.P. and Tandem PCS
Investments, L.P. (each as one of the Purchasers) to fund up to five million
dollars ($5,000,000) of its portion of the Escrow Account may be deferred for a
period of up to eleven (11) Business Days after the date hereof. The aggregate
amount of funds deposited by the Purchasers into the Escrow Account (the
"ESCROWED FUNDS"), shall be held, invested, administered and distributed by the
escrow agent (the "ESCROW AGENT") at the Closing in accordance with the Escrow
Agreement.
(b) The closing of the purchase and sale of the Purchased Securities (the
"CLOSING") will take place at the offices of Xxxxxxx & Xxxxxx, LLP, 000 Xxxxx
Xxxx Xxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx within two (2) Business Days following
the satisfaction (or waiver) of all conditions to the obligations of the parties
hereunder, or at such other place, time or date as the Company and the
Purchasers may agree (the date of the Closing being referred to herein as the
"CLOSING DATE"). At the Closing, the Company will issue, sell and deliver to the
Purchasers, and the Purchasers shall, severally, and not jointly, purchase or
acquire from the Company that number of Preferred Shares and the Warrant to
purchase that number of shares of Common Stock set forth opposite the name of
such Purchaser on SCHEDULE 2.1, against payment of the aggregate purchase price
therefor set forth opposite the name of such Purchaser on SCHEDULE 2.1. Payment
of the aggregate purchase price shall be made by the Escrow Agent to the Company
on behalf of each such Purchaser out of the Escrow Account by wire transfer in
immediately available funds upon written instructions of the Company in
accordance with the terms of the Escrow Agreement. The Purchased Securities will
be issued on the Closing Date, and registered to the applicable Purchaser in the
Company's records, in the amounts designated on SCHEDULE 2.1 hereto.
SECTION 2.3. Use of Proceeds. The proceeds from the sale of the Purchased
Securities hereunder shall be used by the Company to pay Transaction Costs and
for working capital and general corporate purposes, as determined from time to
time by the Company's Board of Directors.
SECTION 2.4. Consummation of Transactions. Each party shall use all
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable and
consistent with applicable law to carry out all of their respective obligations
under this Agreement and to consummate the transactions, which efforts shall
include, without limitation, the following:
(i) The parties shall use all commercially reasonable efforts to cause
the Closing to occur and the transactions to be consummated in accordance
with the terms hereof. Without limiting the generality of the foregoing,
the Company and the Purchasers, respectively, shall obtain all necessary
Consents, including the approval of this Agreement and the transactions by
the Company's shareholders and by all Governmental Authorities, and make
all filings with and to give all notices to third parties which may be
necessary or reasonably required in order for the parties to consummate the
transactions.
(ii) Each party shall furnish to the other party all information
concerning such party and its Affiliates reasonably required for inclusion
in any application or filing to be made by such party or any other party in
connection with the transactions.
(iii) Upon the request of any other party, each party shall forthwith
execute and deliver, or cause to be executed and delivered, such further
instruments of assignment, transfer, conveyance, endorsement, direction or
authorization and other documents as may reasonably be requested by such
party in order to effectuate the purposes of this Agreement.
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(iv) Each Purchaser who is a current stockholder of the Company agrees
to vote its shares of voting stock of the Company to approve the
transactions contemplated by this Agreement in connection with the
Company's contemplated solicitation of shareholder approval pursuant to
SECTION 5.10 hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Purchasers to enter into this Agreement and to
purchase the Purchased Securities, the Company hereby represents and warrants
that as of the Closing:
SECTION 3.1. Organization and Qualification. The Company and each of
its subsidiaries is a corporation duly organized and existing in good
standing under the laws of the jurisdiction in which it is incorporated,
and has the requisite corporate power to own its properties and to carry on
its business as now being conducted. The Company and each of its
subsidiaries is duly qualified as a foreign corporation to do business and
is in good standing in every jurisdiction in which the nature of the
business conducted by it makes such qualification necessary and where the
failure so to qualify would have a Material Adverse Effect with respect to
the Company.
SECTION 3.2. Authorization; Enforcement. (i) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and the Related Agreements, to issue and
sell the Purchased Securities in accordance with the terms hereof, to issue
the shares of Common Stock issuable upon conversion of the Preferred Shares
in accordance with the terms thereof, and to issue the shares of Common
Stock upon exercise of the Warrants in accordance with the terms thereof;
(ii) the execution, delivery and performance of this Agreement and the
Related Agreements by the Company and the consummation by it of the
transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Preferred Shares and the Warrants and the
issuance and reservation for issuance of the shares of Common Stock
issuable upon conversion of the Preferred Shares and upon exercise of the
Warrants) 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 or committee of the Board of Directors is required, and (iii) this
Agreement constitutes, and, upon execution and delivery by the Company of
the Registration Rights Agreement, the Preferred Shares and the Warrants,
such agreements will constitute, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms.
SECTION 3.3. Intentionally Omitted.
SECTION 3.4. 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 Preferred Shares and the Warrants) exercisable or exchangeable
for, or convertible into, any shares of capital stock and the number of
shares to be reserved for issuance upon conversion of the Preferred Shares
and exercise of the Warrants is set forth on SCHEDULE 3.4. All of such
outstanding shares of capital stock have been, or upon issuance, will be,
validly issued, fully paid and non-assessable. No shares of capital stock
of the Company (including the shares of Common Stock issuable upon
conversion of the Preferred Shares and upon exercise of the Warrants) are
subject to preemptive rights or any other similar rights of the
stockholders of the Company or any Liens. Except for the Purchased
Securities (including the shares of Common Stock issuable upon conversion
of the Preferred Shares and upon exercise of the Warrants) and as set forth
on SCHEDULE 3.4, 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 Securities of the Company or any of its subsidiaries, or
arrangements by which the Company or any of its subsidiaries is or may
become bound to issue additional shares of Capital Securities of the
Company or any of its subsidiaries, nor are any such issuances or
arrangements contemplated, and (ii) there are no agreements
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or arrangements under which the Company or any of its subsidiaries is
obligated to register the sale of any of its or their Capital Securities
under the Securities Act (except the Second Amended and Restated
Shareholders' and Registration Rights Agreement dated as of April 16, 1997
and amended as of September 20, 1999, and the Second Amended and Restated
Agreement Among Series E, Series F and Series G Preferred Stockholders and
Senior Registration Rights Agreement dated as of September 7, 1999 and
amended as of September 20, 1999, between the Company and certain of its
shareholders). SCHEDULE 3.4 sets forth all of the Company issued securities
or instruments containing anti-dilution or similar provisions that will be
triggered by, and all of the resulting adjustments that will be made to
such securities and instruments as a result of, the issuance of the
Purchased Securities (including the shares of Common Stock issuable upon
conversion of the Preferred Shares and upon exercise of the Warrants) in
accordance with the terms of this Agreement or any of the Related
Agreements. 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 instruments and
agreements governing securities convertible into or exercisable or
exchangeable for capital stock of the Company.
SECTION 3.5. Issuance of Shares. The shares of Common Stock issuable
upon conversion of the Preferred Shares and upon exercise of the Warrants
are duly authorized and reserved for issuance, and, upon conversion of the
Preferred Shares and exercise of the Warrants in accordance with the terms
thereof, will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances and will not be subject to
preemptive rights, rights of first refusal or other similar rights of
stockholders of the Company and will not impose personal liability upon the
holder thereof.
SECTION 3.6. No Conflicts. The execution, delivery and performance
of this Agreement and the Related Agreements by the Company, and the
consummation by the Company of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and reservation for
issuance, as applicable, of the Preferred Shares, the Warrants, the shares
of Common Stock issuable upon conversion of the Preferred Shares and the
shares of Common Stock issuable upon exercise of the Warrants 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 that with notice
or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment (including, without limitation, the
triggering of any anti-dilution provisions), acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of
its subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including United States federal and
state securities laws and regulations and rules or regulations of any
self-regulatory organizations to which either the Company or its securities
are subject) applicable to the Company or any of its subsidiaries or by
which any property or asset of the Company or any of its subsidiaries is
bound or affected (except, with respect to clause (ii), for such conflicts,
defaults, terminations, amendments, accelerations, cancellations and
violations that would not, individually or in the aggregate, have a
Material Adverse Effect with respect to the Company). Neither the Company
nor any of its subsidiaries is in violation of its Certificate of
Incorporation, By-laws or other organizational documents and neither the
Company nor any of its subsidiaries is in default (and no event has
occurred which, with notice or lapse of time or both, would put the Company
or any of its subsidiaries in default) under, nor has there occurred any
event giving others (with notice or lapse of time or both) any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its subsidiaries is
a party, except for actual or possible violations, defaults or rights that
would not, individually or in the aggregate, have a Material Adverse Effect
with respect to the Company. The businesses of the Company and its
subsidiaries are not being conducted, and shall not be conducted so long as
the Purchasers own any of the Purchased Securities (including the shares of
Common Stock issuable upon conversion of the Preferred Shares and upon
exercise of the Warrants), 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 with respect to the Company. 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
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or governmental agency or any regulatory or self regulatory agency or other
third party in order for it to execute, deliver or perform any of its
obligations under this Agreement or any of the Related Agreements, in each
case in accordance with the terms hereof or thereof. The Company is not in
violation of the listing requirements of the NASDAQ National Market
("NASDAQ") and does not reasonably anticipate that the Common Stock will be
delisted by NASDAQ for the foreseeable future.
SECTION 3.7. SEC Documents, Financial Statements. Since December 6,
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
Sections 13, 14 and 15(d) of the Securities Exchange Act (all of the
foregoing filed prior to the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents incorporated
by reference therein, being hereinafter referred to herein as the "SEC
DOCUMENTS"). As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the Securities Exchange Act
or the Securities Act, as the case may be, and the rules and regulations of
the Securities and Exchange Commission ("SEC") promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings made prior to the date
hereof). As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC applicable with respect thereto. Such financial
statements have been prepared in accordance with U.S. generally accepted
accounting principles ("GAAP"), consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material
respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to immaterial year-end audit
adjustments). Except as set forth in the financial statements of the
Company included in the SEC Documents filed prior to the date hereof, the
Company has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to the
date of such financial statements and (ii) obligations under contracts,
leases and commitments incurred in the ordinary course of business and not
required under GAAP to be reflected in such financial statements, which
liabilities and obligations referred to in clauses (i) and (ii),
individually or in the aggregate, are not material to the financial
condition or operating results of the Company.
SECTION 3.8. Absence of Certain Changes. Since November 14, 2000,
there has been no material adverse change and no material adverse
development in the business, properties, operations, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, except as disclosed in the draft filing on Form 10-K
("DRAFT 10-K") for the year ended December 31, 2000, in the SEC Documents
filed on or before the date hereof or in this Agreement and the Schedules
hereto.
SECTION 3.9. Absence of Litigation. Except as disclosed in the SEC
Documents filed on or before the date hereof, the Draft 10-K, or in this
Agreement and in SCHEDULE 3.9 hereto, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body, including, without
limitation, the Securities and Exchange Commission or NASDAQ, pending or,
to the knowledge of the Company or any of its subsidiaries, threatened
against or affecting the Company, any of its subsidiaries, or any of their
respective directors or officers in their capacities as such. To the best
knowledge of the Company, 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
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conducted with results unfavorable to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse
Effect with respect to the Company.
SECTION 3.10. Intellectual Property. To the best knowledge of the
Company, each of the Company and its subsidiaries owns or is licensed to
use all patents, patent applications, trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses,
permits, inventions, discoveries, processes, scientific, technical,
engineering and marketing data, object and source codes, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) and other
similar rights and proprietary knowledge necessary for the conduct of its
business as now being conducted (collectively, "INTANGIBLES"). To the best
knowledge of the Company, neither the Company nor any subsidiary of the
Company infringes or is in conflict with any right of any other person with
respect to any Intangibles which, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect with
respect to the Company. Neither the Company nor any of its subsidiaries has
received written notice of any pending conflict with or infringement upon
such third party Intangibles. Neither the Company nor any of its
subsidiaries has entered into any consent agreement, indemnification
agreement, forbearance to xxx or settlement agreement with respect to the
validity of the Company's or its subsidiaries' ownership or right to use
its Intangibles and there is no reasonable basis for any such claim to be
successful. To the best knowledge of the Company, 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, except for any registration or application, the loss of
which would not individually or in the aggregate have a Material Adverse
Effect on the Company. The Company and its subsidiaries have complied, in
all material respects, with their respective contractual obligations
relating to the protection of the Intangibles used pursuant to licenses. To
the best knowledge of the Company, no person is infringing on or violating
the Intangibles owned or used by the Company or its subsidiaries.
SECTION 3.11. Foreign Corrupt Practices. Neither the Company, nor
any of its subsidiaries, nor any director, officer, agent, employee or
other person acting on behalf of the Company or any subsidiary 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.
SECTION 3.12. Disclosure. All information relating to or concerning
the Company set forth in this Agreement or provided to the Purchaser
pursuant to SECTION 4.5 hereof or otherwise in connection with the
transactions contemplated hereby is true and correct in all material
respects and the Company has not omitted to state any material fact
necessary in order to make the statements made herein or therein, in light
of the circumstances under which they were made, not misleading. Except for
confidential information disclosed to the Purchasers, no event or
circumstance has occurred or exists with respect to the Company or its
subsidiaries or their respective businesses, properties, prospects,
operations or financial conditions, which has not been publicly disclosed
but, under applicable law, rule or regulation, would be required to be
disclosed by the Company in a registration statement filed on the date
hereof by the Company under the Securities Act with respect to a primary
issuance of the Company's securities.
SECTION 3.13. Acknowledgment Regarding Purchasers' Purchase of the
Purchased Securities. The Company acknowledges and agrees that no Purchaser
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 each
Purchaser is "arms-length" and any statement made by any Purchaser or any
of its representatives or agents in connection with this Agreement and the
transactions contemplated hereby is merely incidental to such Purchaser's
purchase of the Purchased Securities and has not been relied upon by the
Company, its officers or directors in any
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way. The Company further acknowledges that the Company's decision to enter
into this Agreement has been based solely on an independent evaluation by
the Company and its representatives.
SECTION 3.14. Listing. Prior to the Closing Date, the Company will
secure the listing of the shares of Common Stock issuable upon conversion
of the Preferred Shares and upon exercise of the Warrants upon each
national securities exchange or automated quotation system upon which
shares of Common Stock are currently listed (subject to official notice of
issuance).
SECTION 3.15. Form S-3 Eligibility. The Company is 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 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), other than notice
requirements set forth in the Company's Registration Rights Agreements. The
Company has no basis to believe that its past or present independent public
auditors will withhold their consent to the inclusion, or incorporation by
reference, of their audit opinion concerning the Company's financial
statements which are included in the registration statement required to be
filed pursuant to the Registration Rights Agreement.
SECTION 3.16. No General Solicitation. Neither the Company nor any
distributor participating on the Company's behalf in the transactions
contemplated hereby (if any) nor any person acting for the Company, or any
such distributor, has conducted any "general solicitation," as such term is
defined in Regulation D, with respect to any of the Purchased Securities
being offered hereby.
SECTION 3.17. No Integrated Offering. Neither the Company, nor any
of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would
require registration of the Purchased Securities being offered hereby under
the Securities Act or cause this offering of Purchased Securities to be
integrated with any prior offering of securities of the Company for
purposes of the Securities Act, the result of such integration which would
require registration under the Securities Act, or any applicable
stockholder approval provisions, including, without limitation, Rule
4350(i) of the NASD or any similar rule.
SECTION 3.18. No Brokers. The Company has taken no action that 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.
SECTION 3.19. Securities Laws. The offer, issuance and sale of the
Purchased Securities (including shares of Common Stock issuable upon
conversion of the Preferred Shares and upon exercise of the Warrants), in
each case without registration, will not violate the Securities Act, or any
applicable state securities or "blue sky" laws.
SECTION 3.20. Title. The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
merchantable title to all personal property owned by them that is material
to the business of the Company and its subsidiaries, in each case free and
clear of all Liens, except 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 and its subsidiaries.
Any real property and facilities held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
SECTION 3.21. Tax Status. Except as set forth in the SEC Documents,
the Company and each of its subsidiaries has made or filed all foreign,
U.S. 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 and each of its subsidiaries 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
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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. 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. None of the Company's tax returns is presently being audited
by any taxing authority.
SECTION 3.22. Environmental Matters. There is no environmental
litigation or other environmental proceeding pending or threatened by any
governmental regulatory authority or others with respect to the current or
any former business of the Company or any partnership or joint venture
currently or at any time affiliated with the Company. To the best knowledge
of the Company, no state of facts exists as to environmental matters or
Hazardous Substances (as defined below) that involves the reasonable
likelihood of a material capital expenditure by the Company or that may
otherwise have a Material Adverse Effect with respect to the Company. To
the best knowledge of the Company, no Hazardous Substances have been
treated, stored or disposed of, or otherwise deposited, in or on the
properties owned or leased by the Company or by any partnership or joint
venture currently or at any time affiliated with the Company in violation
of any applicable environmental laws, during the time the Company has owned
or leased such properties. The environmental compliance programs of the
Company comply in all respects with all environmental laws, whether
federal, state or local, currently in effect. As used herein, "HAZARDOUS
SUBSTANCES" means any substance, waste, contaminant, pollutant or material
that has been determined by any governmental authority to be capable of
posing a risk of injury to health, safety, property or the environment.
SECTION 3.23. Insurance. The Company has in force fire, casualty,
product liability and other insurance policies, with extended coverage,
sufficient in amount to allow it to replace any of its material properties
or assets which might be damaged or destroyed or sufficient to cover
liabilities to which the Company may reasonably become subject, and such
types and amounts of other insurance with respect to its business and
properties, on both a per occurrence and an aggregate basis, as are
customarily carried by persons engaged in the same or similar business as
the Company. No default or event has occurred that could give rise to a
default under any such policy.
SECTION 3.24. Compliance With Laws. The Company and its subsidiaries
have complied with, are not in violation of, and have not received any
notices of violation with respect to, any federal, state or local statute,
law or regulation (including, without limitation, the Occupational Safety
and Health Act and the Americans with Disabilities Act) with respect to the
conduct of its business, or the ownership or operation of its business,
except for failures to comply, violations or notices of violations which,
individually or in the aggregate, do not have and are not reasonably likely
to have a Material Adverse Effect with respect to the Company. Neither
Company nor any of its subsidiaries has received any written notice of any
actual, alleged or potential obligation on the part of Company or any of
its subsidiaries to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature relating to the business of Company
or any of its subsidiaries or their respective assets in connection with
any violation or alleged violation of applicable law (including, without
limitation, the Occupational Safety and Health Act and the Americans with
Disabilities Act), except any violation or alleged violation that does not
have, and is not reasonably likely to have, a Material Adverse Effect with
respect to the Company.
SECTION 3.25. Interested Party Transactions. Except for transactions
described in the Company's SEC Documents, the Draft 10-K and its most
recent Annual Report on Form 10-K filed on or prior to the date hereof, and
except for the transactions contemplated by this Agreement, no event has
occurred that would be required to be reported as a Certain Relationship or
Related Transaction, pursuant to Item 404 of Regulation S-K promulgated by
the Securities and Exchange Commission.
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ARTICLE IV
PURCHASERS' REPRESENTATIONS
Each of the Purchasers hereby, severally and not jointly, represents and
warrants to the Company that:
SECTION 4.1. Investment Intent. Such Purchaser is (i) an "accredited
investor" as defined in Regulation D of the Securities Act and (ii)
acquiring the Purchased Securities to be purchased by it pursuant to
Article II hereof for investment and not with a view to the distribution
thereof.
SECTION 4.2. Authorization. The execution, delivery and performance
by such Purchaser of this Agreement and of each Related Agreement to which
such Purchaser is a party (a) are within such Purchaser's power and
authority, (b) have been duly authorized by all necessary corporate,
stockholder and other proceedings, as the case may be, and (c) do not and
will not result in the creation of any Lien upon any of such Purchaser's
property or conflict with or result in any breach of any provision of such
Purchaser's Charter or by-laws or any Law, License, agreement or instrument
to which such Purchaser is subject, other than those conflicts or breaches
that are not reasonably expected to have a Material Adverse Effect with
respect to such Purchaser.
SECTION 4.3. Enforceability. This Agreement is and, when executed
and delivered, each Related Agreement to which such Purchaser is a party
will be, legally binding obligations of such Purchaser, enforceable against
it in accordance with the respective terms and provisions hereof and
thereof.
SECTION 4.4. Exemption. Such Purchaser understands that the
Purchased Securities are not, and any Common Stock acquired on conversion,
exercise or otherwise pursuant to the terms thereof at the time of issuance
will not be, registered under the Securities Act on the grounds that the
sale provided for in this Agreement and the issuance of securities
hereunder is exempt from registration under the Securities Act pursuant to
section 4(2) thereof, and that the Company's reliance on such exemption is
predicated on such Purchaser's representations set forth herein.
SECTION 4.5. Experience. Such Purchaser is experienced in evaluating
and investing in technology companies such as the Company, is familiar with
the risks associated with the business and operations of companies that
operate in similar lines of business, has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits
and risks of its investment, and has the ability to bear the economic risks
of its investment, including the potential loss of its investment. Such
Purchaser represents that it has had, during the course of the transaction
and prior to its purchase of the Purchased Securities, the opportunity to
request information from and ask questions of the Company and its officers,
employees and agents concerning the Company, its assets, business and
operations and to receive information and answers to such requests and
questions.
SECTION 4.6. Restrictions on Resale. Such Purchaser understands that
the Purchased Securities (and any Common Stock issued on conversion or
exercise thereof) may not be sold, transferred, or otherwise disposed of
without registration under the Securities Act or an exemption therefrom,
and that in the absence of an effective registration statement covering the
Purchased Securities (or the Common Stock issued on conversion or exercise
thereof) or an available exemption from registration under the Securities
Act, or sold under and in compliance with Rule 144 promulgated under the
Securities Act (or a successor rule) ("RULE 144"), the Purchased Securities
(and any Common Stock issued on conversion or exercise thereof) must be
held indefinitely. Such Purchaser agrees that in no event will it make a
transfer or disposition of any of the Purchased Securities or Common Stock
issued upon conversion or exercise thereof (other than pursuant to an
effective registration statement under the Securities Act), unless and
until (i) such Purchaser shall have notified the Company of the proposed
disposition and (ii) if requested by the Company, such Purchaser shall have
furnished to the Company at the expense of such Purchaser or its
transferee, an opinion of counsel reasonably satisfactory to the Company to
the effect that such transfer may be made without registration under the
Securities Act. Such Purchaser agrees that any certificate or instrument
evidencing the Purchased Securities will contain a legend to such effect.
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SECTION 4.7. Legends. The Purchasers understand that the Purchased
Securities and, until such time as the shares of Common Stock issuable upon
conversion of the Preferred Shares and upon conversion of the Warrants have
been registered under the Securities Act (including registration pursuant
to Rule 416 thereunder) as contemplated by the Registration Rights
Agreement or otherwise may be sold, and are being sold, by the Purchasers
under Rule 144, the certificates for such shares of Common Stock 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 or in any other
jurisdiction. The securities represented hereby may not be offered, sold
or transferred in the absence of an effective registration statement for
the securities under applicable securities laws unless offered, sold or
transferred pursuant to an available exemption from the registration
requirements of those laws; provided the availability of such exemption
is confirmed by an opinion of counsel, acceptable to the Company,
delivered to the Company.
The Company agrees that it shall, immediately prior to the Registration
Statement (as defined in the Registration Rights Agreement) being declared
effective, deliver to its transfer agent an opinion letter of counsel, opining
that at any time the Registration Statement is effective, the transfer agent
shall issue, in connection with the issuance of shares of Common Stock issuable
by the Company upon conversion of the Preferred Shares and upon exercise of the
Warrants, certificates representing such shares of Common Stock without the
restrictive legend above, provided such shares of Common Stock are to be sold
pursuant to the prospectus contained in the Registration Statement. Upon receipt
of such opinion, the Company shall cause the transfer agent to confirm, for the
benefit of the holders, that no further opinion of counsel is required at the
time of transfer in order to issue such shares without such restrictive legend.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of any security upon which it is
stamped, if, unless otherwise required by state securities laws, (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,
acceptable to the Company, 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. 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 written notice to the Purchasers 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 the
Purchasers 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.
ARTICLE V
CONDITIONS TO THE PURCHASERS' OBLIGATIONS TO
PURCHASE AT THE CLOSING
Each Purchaser's obligation to purchase the Purchased Securities at the
Closing, allocated to it as set forth on SCHEDULE 2.1 pursuant to SECTION 2.2 of
this Agreement is subject to compliance by the Company with its agreements and
representations herein contained, and to the satisfaction, on or prior to the
Closing Date, of the following conditions:
SECTION 5.1. Related Agreements. Each of the Related Agreements
shall have been executed and delivered by the Company and the other
Purchasers, as applicable, in a form provided for herein, and each of the
Related Agreements shall be in full force and effect and no term or
condition hereof or thereof shall have been amended, modified or waived
except with the prior written consent of each of the
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Purchasers. All covenants, agreements and conditions contained herein and
in the Related Agreements which are to be performed or complied with on or
prior to the Closing Date shall have been performed or complied with in all
respects.
SECTION 5.2. Charter Documents; Good Standing Certificates. The
Purchasers shall have received from the Company (a) a copy of the Company's
Charter, certified by the Delaware Secretary of State to be true and
complete as of a date no more than five (5) days prior to the Closing Date,
(b) a copy, certified by the Secretary of the Company to be true and
complete as of the Closing Date, of the by-laws thereof; and (c) a
certificate, dated not more than five (5) days prior to the Closing Date,
of the relevant Governmental Authority or other appropriate official of
each state in which the Company is incorporated or qualified to do
business, as to the Company's corporate good standing in such state or
qualification to do business, as the case may be.
SECTION 5.3. Proof of Corporate Action. The Purchasers shall have
received from the Company copies certified by the Secretary or other
appropriate officer thereof to be true and complete as of the Closing Date,
of the records of all corporate action taken to authorize the execution,
delivery and performance of this Agreement and each of the Related
Agreements to which the Company is a party.
SECTION 5.4. Incumbency Certificate. The Purchasers shall have
received from the Company an incumbency certificate, dated the Closing
Date, signed by a duly authorized officer thereof and giving the name and
bearing a specimen signature of each individual who shall be authorized to
sign, in the name and on behalf of the Company, this Agreement and each of
the Related Agreements to which the Company is or is to become a party, and
to give notices and to take other action on behalf of the Company under
each of such documents.
SECTION 5.5. Legal Opinion. The Purchasers shall have received from
Xxxxxxx & Xxxxxx, LLP, counsel to the Company, a legal opinion in the form
attached hereto as EXHIBIT D.
SECTION 5.6. Legality; Governmental and Other Authorizations. The
purchase of the Purchased Securities by the Purchasers shall not be
prohibited by any Law and shall not subject the Purchasers, or any of them,
to any penalty, special tax, or other onerous condition. No preliminary or
permanent injunction or other order, decree or ruling issued by a
Governmental Authority, nor any statute, rule, regulation or executive
order promulgated or enacted by any Governmental Authority, shall be in
effect that would impose material limitations on the ability of any party
to consummate the transactions contemplated herein or prohibit such
consummation. All necessary consents, approvals, licenses, permits, orders
and authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or of or with any other Person, with
respect to any of the transactions contemplated by this Agreement or any of
the Related Agreements, shall have been duly obtained or made and shall be
in full force and effect other than the Blue Sky Filings.
SECTION 5.7. Payment of Certain Fees and Disbursements. Each
Purchaser shall have been reimbursed all Transaction Costs incurred by it
through the Closing Date.
SECTION 5.8. Delivery of Purchased Securities. Each Purchaser shall
have received from the Company certificates evidencing the Preferred Shares
and instruments evidencing the Warrants to be issued and sold to such
Purchaser as of the Closing Date and registered in the name of such
Purchaser.
SECTION 5.9. General. The Purchasers shall have received copies of
all documents, including, without limitation, records of corporate or other
proceedings, the opinion of counsel contemplated in SECTION 5.5 hereof, and
any Consents required to be secured by the Company in connection with the
transactions contemplated herein.
SECTION 5.10. Shareholder Approval. The Company shall have obtained
the approval of its shareholders with respect to the transactions
contemplated hereby as required by the National Association of Securities
Dealers ("NASD").
SECTION 5.11. Minimum Offering. Each of the other Purchasers shall
close concurrently, the transactions contemplated hereunder in accordance
with the terms hereof, resulting in aggregate gross
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proceeds to the Company of at least $30,000,000 on the Closing Date, less
reimbursement to the Purchasers for the Transaction Costs, in accordance
with this Agreement and the terms of the Escrow Agreement.
SECTION 5.12. Filing of Certificate of Designation. The Certificate
of Designation shall have been filed with the Delaware Secretary of State
and shall be in full force and effect.
SECTION 5.13. Auditors Report. The Company shall have received from
Deloitte & Touche, LLP, an unqualified auditors' report for the year ended
December 31, 2000, a copy of which shall have been provided to each
Purchaser.
SECTION 5.14. Information Rights. Each of the management rights
letter between the Company and SCP Private Equity Partners, II, L.P., the
information rights letter between the Company and Tandem PCS Investments,
L.P., and the information rights letter between the Company and Mellon
Ventures, L.P. shall have been duly executed and delivered by the Company
to the respective Purchaser party to such agreement, in a form provided for
in Exhibits F, G and H respectively, and each such agreement shall be in
full force and effect.
ARTICLE VI
COVENANTS
SECTION 6.1. Form D; Blue Sky Laws. The Company shall file with the
Securities and Exchange Commission a Form D with respect to the Purchased
Securities as required under Regulation D and provide a copy thereof to the
Purchasers promptly after such filing. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Purchased 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
Closing Date.
SECTION 6.2. Reporting Status. So long as any Purchaser beneficially owns
any of the Purchased Securities, the Company shall timely file all reports
required to be filed with the Securities and Exchange Commission pursuant to the
Securities Exchange Act, and the Company shall not terminate its status as an
issuer required to file reports under the Securities Exchange Act even if the
Securities Exchange Act or the rules and regulations thereunder would permit
such termination. In addition, the Company shall take all actions necessary to
meet the "registrant eligibility" requirements set forth in the general
instructions to Form S-3 or any successor form thereto, 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.
SECTION 6.3. Use of Proceeds. The Company shall use the proceeds from the
sale of the Purchased Securities to pay Transaction Costs and for working
capital and general corporate purposes.
SECTION 6.4. Expenses. The Company shall pay to each Purchaser at the
Closing, reimbursement for all Transaction Costs incurred by such Purchaser;
provided, however, that Purchasers shall be permitted to deduct all of their
respective Transaction Costs from the Purchase Price payable by such Purchaser
for the Purchased Securities purchased by such Purchaser hereunder (with prior
delivery to the Company of verifiable invoices for such Transaction Costs in
reasonable detail).
SECTION 6.5. Financial Information. The Company shall send (via
electronic transmission or otherwise) the following reports to each Purchaser
until such Purchaser transfers, assigns or sells all of its Purchased
Securities: (i) within ten (10) days after the filing with the Securities and
Exchange Commission, a copy of its Annual Report on Form 10-K, its Quarterly
Reports on Form 10-Q, its proxy statements and any Current Reports on Form 8-K;
and (ii) within one (1) day after release, copies of all press releases issued
by the Company or any of its subsidiaries.
SECTION 6.6. Reservation of Shares. The Company shall at all times have
authorized and reserved for the purpose of issuance a sufficient number of
shares of Common Stock to provide for the full conversion
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of the Preferred Shares and issuance of the shares of Common Stock issuable upon
conversion pursuant to the terms thereof, and the full exercise of the Warrants
and issuance of the shares of Common Stock issuable upon exercise thereof and as
otherwise required by the Preferred Shares and the Warrants.
SECTION 6.7. Listing. The Company shall maintain, so long as any
Purchaser (or any of its affiliates) owns any Purchased Securities, the listing
of all shares of Common Stock issuable upon conversion of the Preferred Shares
and upon exercise of the Warrants on each national securities exchange or
automated quotation system on which shares of Common Stock are currently listed.
The Company will use its best efforts to continue the listing and trading of its
Common Stock on NASDAQ, the New York Stock Exchange ("NYSE") or the American
Stock Exchange ("AMEX") and will comply in all respects with the reporting,
filing and other obligations under the bylaws or rules of the NASD and such
exchanges, as applicable. The Company shall promptly provide to the Purchasers
copies of any notices it receives regarding the continued eligibility of the
Common Stock for trading on the NASDAQ or, if applicable, 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.
SECTION 6.8. Corporate Existence. So long as any Purchaser beneficially
owns any Purchased 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 Related Agreements 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 conversion of all
the Preferred Shares and exercise in full of all Warrants outstanding as of the
date of such transaction and (ii) except in the event of a merger, consolidation
of the Company into any other corporation, or the sale or conveyance of all or
substantially all of the assets of the Company where the consideration consists
solely of cash, the surviving or successor entity is a publicly traded
corporation whose common stock is listed for trading on the NASDAQ, NYSE or
AMEX.
SECTION 6.9. No Integrated Offerings. The Company shall not make any
offers or sales of any security (other than the Purchased Securities) under
circumstances that would require registration of the Purchased Securities being
offered or sold hereunder under the Securities Act or cause this offering of the
Purchased 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.
SECTION 6.10. Legal Compliance. The Company shall conduct its business
and the business of its subsidiaries in compliance with all laws, ordinances or
regulations of governmental entities applicable to such businesses, except where
the failure to do so would not have a Material Adverse Effect with respect to
the Company.
SECTION 6.11. Registration on Form S-3. As soon as practical following
the Closing Date and the purchase of the Purchased Securities by the Purchasers,
but in no event later than 45 days following the Closing Date, the Company will
file with the SEC a registration statement on Form S-3 in order to register for
resale the shares of Common Stock issuable upon conversion or exercise of the
Purchased Securities and will take all commercially reasonable efforts to effect
such registration as soon as practicable thereafter. The Purchasers acknowledge
that the Company's filing of such registration statement will require prior
notice to existing stockholders who are parties to registration rights
agreements with the Company and that such stockholders may exercise their
"piggyback" registration rights to participate and include shares of Common
Stock they hold in such registration statement. The terms and conditions under
which such registration will be effected shall be as set forth in the
Registration Rights Agreement, except to the extent such terms and conditions
are inconsistent with the provisions of this Section 6.11.
SECTION 6.12. Conduct of Business. From the date of this Agreement to the
Closing, the Company shall conduct its business, operations and activities only
in the ordinary course of business and consistent with past practice, and shall
cause all transactions relating thereto to be effected only in the ordinary
course of business.
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SECTION 6.13. Board Seats. The Company shall use its best efforts,
between the signing of this Agreement and the Closing Date, to obtain the
written approval of the Nasdaq Stock Market or its Staff, under Rule 4351 of the
NASD or such other rules as may apply, for an amendment to the Certificate of
Designation providing for the right of the holders of the Preferred Shares to
elect two (2) members of the Company's Board of Directors ("DIRECTORS") so long
as there is outstanding any of the Preferred Shares originally issued on the
Closing Date, one of which shall be designated by SCP Private Equity Partners,
II, L.P. so long as it holds any of such Preferred Shares and one of which shall
be designated by Tandem PCS Investments, L.P. so long as it holds any of such
Preferred Shares, and if such approval is obtained, the Certificate of
Designation shall be so amended by the Company before its filing with the
Delaware Secretary of State.
SECTION 6.14. Subsequent Offering. The Company agrees that without the
prior written consent of each of the Purchasers, it will not issue additional
shares of the Series B Convertible Preferred Stock at a price per share less
than $31.40 or on terms more favorable to the purchasers of such additional
shares than the terms contemplated hereby and by the Certificate of Designation.
ARTICLE VII
TRANSFER AGENT INSTRUCTIONS
(a) The Company shall instruct its transfer agent to issue certificates,
registered in the name of the Purchasers or their nominee, for the shares of
Common Stock issuable upon conversion of the Preferred Shares and upon exercise
of the Warrants in such amounts as specified from time to time by the Purchasers
to the Company upon conversion of or otherwise pursuant to the Preferred Shares
or upon exercise of the Warrants, as applicable.
(b) The Company warrants that no instruction other than such instructions
referred to in this Article VII, and stop transfer instructions to give effect
to SECTION 4.7 hereof in the case of the transfer of the shares of Common Stock
issuable upon conversion of the Preferred Shares or upon exercise of the
Warrants prior to registration of such shares of Common Stock under the
Securities Act or without an exemption therefrom, will be given by the Company
to its transfer agent and that such 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 and permitted
under applicable securities laws. Nothing in this Article VII shall affect in
any way the Purchasers' obligations and agreement set forth in SECTION 4.7
hereof to resell such securities pursuant to an effective registration statement
or under an exemption from the registration requirements of applicable
securities law.
(c) If any Purchaser provides the Company and the transfer agent with an
opinion of counsel reasonably satisfactory to the Company, which opinion of
counsel shall be in form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect that the shares of Common Stock
issuable upon conversion of the Preferred Shares or upon exercise of the
Warrants to be sold or transferred may be sold or transferred pursuant to an
exemption from registration, the Company shall permit the transfer and, in the
case of shares of Common Stock issuable upon conversion of the Preferred Shares
or upon exercise of the Warrants, promptly instruct its transfer agent to issue
one or more certificates in such name and in such denominations as specified by
such Purchaser.
ARTICLE VIII
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The Company's obligation to sell and issue the Purchased Securities
pursuant to this Agreement is subject to compliance by the Purchasers with the
agreements herein contained, and to the satisfaction on or prior to the Closing
Date, of the following conditions:
SECTION 8.1. Related Agreements. Each of the Related Agreements to
which each Purchaser is a party shall have been executed by such Purchaser.
All covenants, agreements and conditions
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contained in such Related Agreements which are to be performed or complied
with by the Purchasers on or prior to the Closing Date shall have been
performed or complied with by the Purchasers in all material respects.
SECTION 8.2. Representations and Warranties; Satisfaction of
Conditions; Officer's Certificate. The representations and warranties of
the Purchasers contained herein shall be true and correct in all respects
on and as of the Closing Date with the same force and effect as though made
on and as of the Closing Date. The Company shall have received on the
Closing Date a certificate to such effect signed by an authorized officer
of each Purchaser.
SECTION 8.3. Legality; Governmental and Other Authorizations. The
issuance and sale of the Purchased Securities by the Company shall not be
prohibited by any Law and shall not subject the Company to any penalty,
special tax, or other onerous condition. No preliminary or permanent
injunction or other order, decree or ruling issued by a Governmental
Authority, nor any statute, rule, regulation or executive order promulgated
or enacted by any Governmental Authority, shall be in effect that would
impose material limitations on the ability of any party to consummate the
transactions contemplated hereby or prohibit such consummation. All
necessary consents, approvals, licenses, permits, orders and authorizations
of, or registrations, declarations and filings with, any governmental or
administrative agency or of or with any other Person, with respect to any
of the transactions contemplated by this Agreement or any of the Related
Agreements, shall have been duly obtained or made and shall be in full
force and effect other than the Blue Sky Filings.
ARTICLE IX
SUBSEQUENT HOLDERS OF PURCHASED SECURITIES
Whether or not any express assignment has been made in this Agreement, the
provisions of this Agreement that are for the benefit of the Purchasers as the
holders of any Purchased Securities are also for the benefit of, and enforceable
by, all subsequent holders of such Purchased Securities, and the provisions of
this Agreement that subject the Purchasers to obligations as the holders of any
Purchased Securities also shall subject all subsequent holders of Purchased
Securities.
ARTICLE X
INDEMNITY
SECTION 10.1. Indemnification. Notwithstanding any disclosures made in
the Schedules hereto, the Company hereby agrees to indemnify, exonerate and hold
the Purchasers and their (if applicable) general and limited partners, members
and managers, or shareholders and their respective shareholders, officers,
directors, employees and agents (each an "INDEMNITEE") free and harmless from
and against any and all actions, causes of action, or suits (the "CLAIMS"),
losses, liabilities, damages and expenses, including, without limitation,
reasonable attorneys' fees and disbursements (collectively, "DAMAGES") arising
from a breach of any representation, warranty, covenant or agreement of the
Company contained in or made pursuant to this Agreement or any of the Related
Agreements, and (b) any Claims brought against them by third parties ("THIRD
PARTY CLAIMS") to the extent any such Third Party Claim is incurred by any
Indemnitee as a result of or relating to (i) any transaction by the Company
financed or to be financed in whole or in part, directly or indirectly, with
proceeds from the sale of any of the Purchased Securities, and (ii) the
execution, delivery, performance or enforcement of this Agreement, the Related
Agreements or any other agreement contemplated hereby or thereby (including,
without limitation, any failure by the Company to comply with any of its
covenants or any material breach of its representations and warranties in this
Agreement, the Related Agreements or any other agreement contemplated hereby or
thereby), excluding, however, any such Damages caused directly by the actions of
the Indemnitee in violation of its obligations under such agreements.
SECTION 10.2. Transaction Costs. The Company hereby agrees to indemnify
each Purchaser against and agrees that it will hold each Purchaser harmless from
any claim, demand or liability for any
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Transaction Costs incurred by the Company or such Purchaser in connection with
the transactions contemplated by this Agreement or the Related Agreements.
SECTION 10.3. Procedures.
(a) In the event of any Third Party Claim for indemnification under the
terms of SECTION 10.1 or 10.2, Indemnitee shall give prompt written notice of
such Third Party Claim to the Company which may assume the defense thereof,
provided that any delay or failure to so notify the Company shall relieve the
Company of its obligations hereunder only to the extent, if at all, that it is
materially prejudiced by reason of such delay or failure. The Indemnitee shall
have the right to approve any counsel selected by the Company and to approve the
terms of any proposed settlement, such approval not to be unreasonably delayed
or withheld (unless, in the case of approval of a proposed settlement, such
settlement provides only, as to the Indemnitee, the payment of money damages
actually paid by the Company and a complete release of the Indemnitee in respect
of the Third Party Claim in question). Notwithstanding any of the foregoing to
the contrary, the provisions of this ARTICLE X shall not be construed so as to
provide for the indemnification of any Indemnitee for any liability to the
extent (but only to the extent) that such indemnification would be in violation
of applicable law or that such liability may not be waived, modified or limited
under applicable law, but shall be construed so as to effectuate the provisions
of this ARTICLE X to the fullest extent permitted by law.
(b) In the event that the Company undertakes the defense of any Third Party
Claim, the Company will keep the Indemnitee advised as to all material
developments in connection with such Third Party Claim, including, but not
limited to, promptly furnishing the Indemnitee with copies of all material
documents filed or served in connection therewith.
(c) In the event that the Company fails to assume the defense of any Third
Party Claim within ten Business Days after receiving written notice thereof, the
Indemnitee shall have the right, subject to the Company's right to assume the
defense pursuant to the provisions of this ARTICLE X, to undertake the defense,
compromise or settlement of such Third Party Claim for the account of the
Company. Unless and until the Indemnitee assumes the defense of any Third Party
Claim, the Company shall advance to the Indemnitee any of its reasonable
attorneys' fees and other costs and expenses incurred in connection with the
defense of any such action or proceeding. In addition, if the Indemnitee has
notified the Company of its determination that such Third Party Claim may
reasonably create a conflict between the positions of the Indemnitee and the
Company, then separate counsel shall be entitled to participate in and conduct
such defense and the Company shall be liable for any reasonable legal or other
expenses incurred by the Indemnitee in connection with such defense. Each
Indemnitee shall agree in writing prior to any such advancement that, in the
event he or it receives any such advance, such Indemnitee shall reimburse the
Company for such fees, costs and expenses to the extent that it shall be
determined that he or it was not entitled to indemnification under this ARTICLE
X.
(d) In no event shall Company be required to pay in connection with any
Third Party Claim for more than one firm of counsel (and local counsel) to the
Purchasers, their Affiliates, directors, shareholders, officers, employees,
agents and/or the legal representatives of any of them.
SECTION 10.4. Survival of Obligations. The obligations of the Company and
the Purchasers under this ARTICLE X shall survive the Closing Date and the
termination of this Agreement.
ARTICLE XI
NOTICES
All demands, notices, requests, consents and other communications required
or permitted under this Agreement, any Related Agreement or the Purchased
Securities shall be in writing and shall be personally delivered or sent by
facsimile machine (with a confirmation copy sent by one of the other methods
authorized in this Section), commercial (including FedEx) or U.S. Postal Service
overnight delivery service, or,
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deposited with the U.S. Postal Service mailed first class, registered or
certified mail, postage prepaid, as set forth below:
If to the Company, addressed to:
AirNet Communications Corporation
0000 Xxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
Xxx Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
If to any Purchaser, to such Purchaser's address as set forth on SCHEDULE
2.1 hereto.
Notices shall be deemed given upon the earlier to occur of (i) receipt by
the party to whom such notice is directed; (ii) if sent by facsimile machine, on
the day (other than a Saturday, Sunday or legal holiday in the jurisdiction to
which such notice is directed) such notice is sent if sent (as evidenced by the
facsimile confirmed receipt) prior to 5:00 p.m. Eastern Standard Time and, if
sent after 5:00 p.m. Eastern Standard Time, on the day (other than a Saturday,
Sunday or legal holiday in the jurisdiction to which such notice is directed)
after which such notice is sent; (iii) on the first business day (other than a
Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) following the day the same is deposited with the commercial carrier if
sent by commercial overnight delivery service; or (iv) the fifth day (other than
a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) following deposit thereof with the U.S. Postal Service as aforesaid.
Each party, by notice duly given in accordance therewith may specify a different
address for the giving of any notice hereunder.
ARTICLE XII
TERMINATION; SURVIVAL
SECTION 12.1. Termination. In addition to any other rights of termination
set forth herein, this Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, without further obligation of any party
(except as set forth herein), at any time prior to the Closing Date:
(a) by mutual written consent of the parties;
(b) by the Company or the Purchasers upon written notice to the other,
if the consummation of the transactions shall not have occurred by June 30,
2001;
(c) by the Company, upon written notice to the Purchasers on or before
the 30th day following the date of this Agreement; or
(d) by (x) any Purchaser (provided that such Purchaser is not
otherwise in breach of this Agreement) if (i) the Company has breached a
material representation, warranty, covenant or agreement set forth herein,
(ii) such breach would entitle the Purchasers not to consummate the
transactions at the Closing and (iii) the Company fails to cure such breach
within ten (10) days of written notice thereof from any Purchaser and (y)
the Company as to any Purchaser (provided that the Company is not otherwise
in breach of this Agreement) if (i) such Purchaser has breached a material
representation, warranty, covenant or agreement set forth herein, (ii) such
breach would entitle the Company not to
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consummate the transactions at the Closing and (iii) such Purchaser fails
to cure such breach within ten (10) days of written notice thereof from the
Company.
SECTION 12.2. Effect of Termination. In the event of a termination of
this Agreement, neither party hereto shall have any liability or further
obligation to the other party, except as set forth in paragraph (a), (b) or (c)
below, and except that nothing herein will relieve any party from liability for
any breach by such party of this Agreement.
(a) In the event of a termination by the Company of this Agreement pursuant
to SECTION 12.1, all provisions of this Agreement shall terminate, except
ARTICLES X, XI, XII, XIV and XV.
(b) Except in the event of a termination by the Company pursuant to SECTION
12.1(D), all costs and expenses incurred by the Purchasers in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
Company.
(c) In the event of a termination of this Agreement by the Company pursuant
to SECTION 12.1(B) or SECTION 12.1(C), Company shall reimburse each Purchaser
for all Transaction Costs incurred by such Purchaser to the date of termination
and shall issue to the Purchasers (pro rata based on their commitments
hereunder) Warrants to purchase an aggregate of 300,000 shares of Common Stock
at an exercise price per share equal to $3.14, such Warrants to be substantially
in the form of EXHIBIT B hereto.
SECTION 12.3. Survival. All covenants, agreements, representations and
warranties made herein or in any other document referred to herein or delivered
to any party pursuant hereto shall be deemed to have been relied on by each such
party, notwithstanding any investigation made by such party or on its behalf.
All representations and warranties made herein or in any of the Related
Agreements shall survive the execution and delivery of this Agreement and of the
Purchased Securities for three (3) years from the Closing Date.
ARTICLE XIII
AMENDMENTS AND WAIVERS
This Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively and either for a specified period of time or
indefinitely) only with the written consent of the Company and each of the
Purchasers. Any amendment or waiver effected in accordance with this ARTICLE
XIII shall be binding upon the Company and each holder (or permitted transferee)
of any Purchased Securities sold pursuant to this Agreement (whether or not such
holder (or permitted transferee) has consented to such amendment or waiver).
ARTICLE XIV
CHOICE OF LAW; SUBMISSION TO JURISDICTION
AND WAIVER OF JURY TRIAL
SECTION 14.1. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF FLORIDA
(WITHOUT GIVING EFFECT TO ANY CONFLICTS OR CHOICE OF LAWS PROVISIONS THAT WOULD
CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER
JURISDICTION).
SECTION 14.2. Equitable Remedies. The parties hereto agree that
irreparable harm would occur in the event that any of the agreements and
provisions of this Agreement were not performed fully by the parties hereto in
accordance with their specific terms or conditions or were otherwise breached,
and that money damages are an inadequate remedy for breach of this Agreement
because of the difficulty of ascertaining and quantifying the amount of damage
that will be suffered by the parties hereto in the event that this Agreement is
not performed in accordance with its terms or conditions or is otherwise
breached. It is accordingly hereby agreed that the parties hereto shall be
entitled to an injunction or injunctions to restrain, enjoin and prevent
breaches of this Agreement by the other parties and to enforce specifically such
terms and provisions of this
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Agreement in any court of the United States or any state having jurisdiction,
such remedy being in addition to and not in lieu of, any other rights and
remedies to which the other parties are entitled to at law or in equity.
ARTICLE XV
CONFIDENTIALITY; RIGHT TO PUBLICIZE
(a) Each Purchaser, on behalf of itself and its Affiliates, agrees that it
will maintain the confidentiality of all non-public information disclosed to it
by the Company or obtained as a result of negotiating or entering into this
Agreement and the Related Agreement and will not, without the prior written
consent of the Company, use such information other than in connection with the
transactions contemplated hereby, provided, however, that the foregoing
confidentiality obligations do not apply to information that (i) was or becomes
available to the public through no action by such Purchaser, (ii) was or becomes
available to such Purchaser on a non-confidential basis or (iii) in the
reasonable opinion of legal counsel, must be disclosed pursuant to Law or the
requirements of any national securities exchange; provided further, however,
that in the case of (iii) above where disclosure is sought pursuant to subpoena,
litigation discovery request or other similar legal process, such Purchaser
shall submit the proposed disclosure to the Company, who shall have an
opportunity, at its expense, to contest such disclosure, move for a protective
order or otherwise attempt to narrow the scope thereof to the extent permitted
under Law.
(b) Each of the parties hereto hereby agrees that it will not, except as
required by law, issue a press release or make any public statement regarding
the transactions contemplated hereby without the prior approval of the Company
and the Purchasers; provided, however, that following the Closing but only after
the final closing by the Company of the sale of any other shares of Series B
Convertible Preferred Stock and warrants to purchase shares of Common Stock, the
Purchasers will have the right to publicize their investment in the Company as
contemplated hereby by means of a tombstone advertisement or other customary
advertisement in newspapers and other periodicals which advertisement shall be
reasonably acceptable to the Company and customary disclosures to its limited
partners. The Company will announce and disclose to the public and in applicable
SEC filings the material terms of this Agreement and the Related Agreements
promptly following execution of this Agreement and will have the right to inform
actual or prospective customers and lenders of such investment from and after
the date of this Agreement.
ARTICLE XVI
ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS
(a) This Agreement, the Related Agreements and the other writings referred
to herein or delivered pursuant hereto which form a part hereof contain the
entire understanding of the parties hereto with respect to its subject matter.
This Agreement supersedes all prior agreements and understandings (whether oral
or written) between the parties with respect to its subject matter.
(b) This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(c) There are no third party beneficiaries of this Agreement.
(d) In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
(e) The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.
(f) Counterparts of this Agreement (or applicable signature pages hereof)
that are manually signed and delivered by facility transmission shall be deemed
to constitute signed original counterparts hereof and shall bind the parties
signing and delivering in such manner.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
AIRNET COMMUNICATIONS CORPORATION
By: /s/ R. Xxx Xxxxxxxx, Xx.
------------------------------------
Name: R. Xxx Xxxxxxxx, Xx.
----------------------------------
Title: President and Chief Executive
Officer
-----------------------------------
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SECURITIES PURCHASE AGREEMENT
The undersigned hereby (a) agrees to purchase the Purchased Securities of
AirNet Communications Corporation (the "COMPANY") listed opposite its name on
the SCHEDULE 2.1 attached hereto, subject to the terms and conditions of the
Agreement; (b) acknowledges that the certificate(s) evidencing the Preferred
Shares and Warrants being issued hereunder (and the certificate(s) evidencing
the Common Stock issuable upon conversion or exercise thereof) may bear a legend
consistent with the provisions of SECTION 4.7; (c) acknowledges that
representations made by the undersigned in ARTICLE IV of this Agreement will be
relied upon by the Company in connection with the offer, sale and delivery of
the Purchased Securities by the Company to the undersigned; and (d) authorizes
this signature page to be attached as a counterpart signature page to the
Agreement as of the date hereof.
PURCHASER:
TANDEM PCS INVESTMENTS, L.P.
By:/s/ Xxxxxx Xxxxxxxx
------------------------------------
Name:Xxxxxx Xxxxxxxx
----------------------------------
Title:Vice President
-----------------------------------
By: /s/ Xxxx X. XxXxxxxx
------------------------------------
Name:Xxxx X. XxXxxxxx
----------------------------------
Title:Director
-----------------------------------
[PURCHASER SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
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SECURITIES PURCHASE AGREEMENT
The undersigned hereby (a) agrees to purchase the Purchased Securities of
AirNet Communications Corporation (the "COMPANY") listed opposite its name on
the SCHEDULE 2.1 attached hereto, subject to the terms and conditions of the
Agreement; (b) acknowledges that the certificate(s) evidencing the Preferred
Shares and Warrants being issued hereunder (and the certificate(s) evidencing
the Common Stock issuable upon conversion or exercise thereof) may bear a legend
consistent with the provisions of SECTION 4.7; (c) acknowledges that
representations made by the undersigned in ARTICLE IV of this Agreement will be
relied upon by the Company in connection with the offer, sale and delivery of
the Purchased Securities by the Company to the undersigned; and (d) authorizes
this signature page to be attached as a counterpart signature page to the
Agreement as of the date hereof.
PURCHASER:
MELLON VENTURES, L.P.
By: MVMA, L.P., its General Partner
------------------------------------
By:MVMA, Inc., its General Partner
------------------------------------
By:/s/ Xxxxxx X. Xxxxx
------------------------------------
Name:Xxxxxx X. Xxxxx
----------------------------------
Title:Associate
-----------------------------------
[PURCHASER SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]
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Exhibit A
AIRNET COMMUNICATIONS CORPORATION
SERIES B CONVERTIBLE PREFERRED STOCK
CERTIFICATE OF DESIGNATION
------------------------
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
------------------------
AirNet Communications Corporation (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, does hereby certify that pursuant to the authority vested in the Board
of Directors of the Corporation by its Certificate of Incorporation, as amended,
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, said Board of Directors, adopted the following resolution
at a meeting duly called and held on April 2, 2001, which resolution remains in
full force and effect as of the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation (the "Board of Directors") by its Certificate of
Incorporation, as amended (hereinafter referred to as the "Certificate of
Incorporation"), the Board of Directors does hereby create, authorize and
provide for the issuance of Series B Convertible Preferred Stock, par value $.01
per share, consisting of 3,184,713 shares, having the following designations,
preferences and relative and other special rights, qualifications, limitations
and restrictions:
1. DESIGNATION AND AMOUNT. The designation of such series is "SERIES
B CONVERTIBLE PREFERRED STOCK" (hereinafter in this Certificate of
Designation called the "SERIES B PREFERRED STOCK") and the number of shares
constituting such series shall be 3,184,713, which number may be decreased
(but not increased) by the Board of Directors without a vote of
stockholders; provided, however, that such number may not be decreased
below the number of then currently outstanding shares of Series B Preferred
Stock, plus shares issuable upon the exercise of any then outstanding
options, warrants or rights to acquire Series B Preferred Stock, including
dividends payable pursuant to the terms of the Series B Preferred Stock.
All capitalized terms used in this Certificate of Designation and not
otherwise defined shall have the meaning given to such terms in Section 13
hereof.
2. DIVIDENDS. (a) The Holders of shares of the Series B Preferred
Stock, in preference to the holders of all Junior Capital Stock and on a
pari passu basis with holders of Parity Capital Stock, will be entitled to
receive, when, as and if dividends are declared by the Board of Directors,
out of funds of the Corporation legally available therefor, cumulative
dividends as provided in this Section 2. Dividends on each outstanding
share of Series B Preferred Stock shall be payable in cash, or at the
option of the Corporation, in such number of shares of Series B Preferred
Stock as is set forth in Section 2(d) below, and accrue (whether or not
earned or declared) at the rate of 8% per annum on the sum of (i) the
Purchase Price and (ii) all accumulated and unpaid dividends accrued
thereon from the date of issuance thereof (the "SERIES B DIVIDENDS"). Such
dividends will be calculated and accrued on a quarterly basis on the last
day of each fiscal quarter of the Corporation in respect of the prior three
month period prorated on a daily basis for partial periods.
(b) If the Corporation at any time pays less than the total amount of
Series B Dividends then accrued with respect to the Series B Preferred
Stock, such payment shall be distributed ratably among the Holders based
upon the aggregate accrued but unpaid Series B Dividends on the Series B
Preferred Stock held by each such Holder.
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(c) In the event that the Corporation declares or pays any dividends
upon the Common Stock (whether payable in cash, securities or other
property) other than dividends payable solely in shares of Common Stock,
the Corporation shall also declare and pay to the Holders at the same time
that it declares and pays such dividends to the holders of the Common
Stock, the dividends which would have been declared and paid with respect
to the Series B Preferred Stock had all of the outstanding Series B
Preferred Stock been converted in accordance with Section 6(a) immediately
prior to the record date for such dividend, or if no record date is fixed,
the date as of which the record holders of Common Stock entitled to such
dividends are to be determined.
(d) The Corporation may pay the Series B Dividends to each Holder by
the issuance of such number of shares of Series B Preferred Stock as equals
the quotient of (i) the accrued and unpaid Series B Dividends with respect
to the shares of Series B Preferred Stock held such Holder and (ii) the
Purchase Price.
3. LIQUIDATION PREFERENCE. (a) In the event of any (each a
"LIQUIDATION EVENT") liquidation, dissolution or winding up of the affairs
of the Corporation, either voluntarily or involuntarily, each Holder shall
be entitled, after payment of the Corporation's debts and other liabilities
and any preferential amounts due to the holders of Senior Capital Stock, to
be paid in full, before any distribution is made on any Junior Capital
Stock but on a pari passu basis with any distribution on Parity Capital
Stock, an amount (the "LIQUIDATION AMOUNT") with respect to each share of
Series B Preferred Stock held by such Holder equal to the sum of (i) the
product of (x) the Purchase Price and (y) two and (ii) the Series B
Dividends accrued on such share of Series B Preferred Stock. After payment
of the preferences to all holders of preferred stock of the Corporation,
all remaining assets of the Corporation legally available for distribution,
if any, shall be distributed ratably to the holders of the Common Stock,
Series B Preferred Stock (on an as-if converted to Common Stock basis) and
any other Capital Stock of the Corporation entitled to share in such
distribution.
(b) Deemed Liquidation. The Majority Holders may elect in writing by
notice delivered to the Corporation, prior to the closing of a Sale of the
Corporation, to treat a specific proposed Sale of the Corporation (other
than a Qualified Sale of the Corporation) as a Liquidation Event for
purposes of Section 3(a).
(c) Partial Payment. The Corporation shall, not later than 20 days
prior to the earlier of the record date for the taking of a vote of
stockholders with respect to any Liquidation Event or the date set for the
consummation of a Liquidation Event, provide to the Holders such
information concerning the terms of the Liquidation Event and the value of
the assets of the Corporation or such other relevant information as may be
reasonably requested by the Holders. If, upon a Liquidation Event, the net
assets of the Corporation available for payment to the Holders of Series B
Preferred Stock and the holders of Parity Capital Stock are not sufficient
to pay in full the Liquidation Amount to the Holders of Series B Preferred
Stock and the preferential amounts due to the holders of Parity Capital
Stock, the Holders of Series B Preferred Stock and the holders of Parity
Capital Stock shall share equally and ratably in any distribution of assets
of the Corporation in proportion to the full liquidation preference to
which each is entitled.
(d) No Additional Distributions. Holders of Series B Preferred Stock
shall not be entitled to any additional distribution in the event of any
Liquidation Event in excess of the amount set forth in Section 3(a) hereof.
4. VOTING RIGHTS OF SERIES B PREFERRED STOCK. (a) Except as
otherwise required by law or as provided herein, each Holder of Series B
Preferred Stock shall be entitled to vote on all matters and shall be
entitled to that number of votes equal to the number of shares of Common
Stock into which such Holder's shares could be converted pursuant to the
provisions of Section 6(a) hereof on the record date for the determination
of stockholders entitled to vote on such matter or, if no such record date
is established, on the date such vote is taken or any written consent of
stockholders is solicited, provided, however, that, solely for purposes of
determining the number of votes a Holder of Series B Preferred Stock is
entitled to pursuant to this Section 4, the Conversion Price (as defined in
Section 6(d) hereof),
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if then less than $2.8438, shall be deemed to be $2.8438 (the shares deemed
convertible for purposes of such determination shall be hereinafter
referred to as the "Holders' Voting Shares"). Except as otherwise expressly
provided herein or as required by law, the Holders of shares of the Series
B Preferred Stock shall vote together with the holders of shares of the
Corporation's Common Stock as a single class on all matters. The Holders
shall be entitled to notice of all stockholders meetings in accordance with
the Corporation's by-laws and General Corporation Law of the State of
Delaware.
(b) Notwithstanding the above paragraph or any provision to the
contrary contained herein, the Holders of Series B Preferred Stock shall be
entitled, voting together as a separate single class, to nominate, and upon
amendment of the Corporation's Certificate of Incorporation as described
below to elect, two (2) members of the Board of Directors in accordance
with the terms set forth in this Section 4(b) and subject to the
limitations set forth in Section 4(c) below. Until such time as the
Corporation's stockholders have approved an amendment to the Corporation's
Certificate of Incorporation (the "Charter Amendment") providing for the
right of the Holders of Series B Preferred Stock to elect two (2) members
of the Board of Directors and such Charter Amendment is filed with the
Delaware Secretary of State and effective (the "Charter Amendment Effective
Date") and subject to the limitations set forth in Section 4(c) below, the
Holders of Series B Preferred Stock, voting together as a separate single
class, are entitled to designate two (2) nominees for election to the class
of the Board of Directors whose term expires at the Corporation's 2001
Annual Stockholders Meeting ("Class III") and at each subsequent election
of Class III directors prior to the Charter Amendment Effective Date, and
the Board of Directors shall nominate such designees and recommend to the
Corporation's stockholders that such designees be elected as members of
Class III of the Board of Directors.
With respect to the two (2) directors to be designated for nomination
by the Holders of Series B Preferred Stock, one individual shall be
designated by SCP Private Equity Partners II, L.P. ("SCP") so long as SCP
holds any Series B Preferred Stock (the "SCP Designee for Nomination") and
one individual shall be designated by Tandem PCS Investments, L.P.
("Tandem") so long as Tandem holds any Series B Preferred Stock (the
"Tandem Designee for Nomination"). For nominees for election at the
Corporation's 2001 Annual Stockholders Meeting, each of SCP and Tandem
shall notify the Corporation in writing of the identity of its designee no
later than ten (10) days following the date on which they become Holders of
Series B Preferred Stock. For all subsequent elections of Class III
directors, each of SCP and Tandem shall notify the Corporation in writing
of the identity of its designee for nomination to Class III of the Board of
Directors no later than the last date (the "Designee Notice Due Date") on
which shareholder proposals may be submitted for an election year when they
have such a right, which notice shall be conclusive evidence of the consent
of such designee to serve as a director of the Corporation. In the event
either SCP or Tandem fails to provide such notice, the SCP Designee for
Nomination and Tandem Designee for Nomination (or the SCP representative
and Tandem representative in the case of the notice for the Corporation's
2001 Annual Stockholders' Meeting) serving on the Board of Directors on the
Designee Notice Due Date shall be deemed to be renominated. In the event
SCP or Tandem has no designee serving (or otherwise designated to serve in
the event of the resignation, death, removal or inability to serve of a
designee, as provided in the last sentence of this paragraph) on the Board
of Directors on the Designee Notice Due Date, the Board of Directors shall
be entitled to make the nomination for which such notice was required. In
the event either SCP or Tandem fails to hold any Series B Preferred Stock,
the Holders of Series B Preferred Stock, voting together as a separate
single class, shall be entitled to the director nomination rights
previously held by SCP or Tandem, as the case may be. If neither SCP nor
Tandem holds any Series B Preferred Stock, the Holders of Series B
Preferred Stock, voting together as a separate single class, shall be
entitled to the director nomination rights previously held by SCP and
Tandem. The notice shall include all information with respect to such
designee as is required to be included in a proxy statement soliciting
proxies for the election of directors pursuant to Regulation 14A of the
Exchange Act. In the event of any vacancy arising by reason of the
resignation, death, removal (which may include a removal by the Holders of
Series B Preferred Stock, with or without cause, at the written request of
SCP or Tandem, as applicable, as the party designating such director) or
inability to serve of the SCP Designee for Nomination or the Tandem
Designee for Nomination, SCP or Tandem, as applicable, shall notify the
Corporation of its choice to fill such vacancy,
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and the Board of Directors shall appoint such person to fill such vacancy
and serve until the next meeting of the Corporation's stockholders for the
election of Class III directors.
At all times after the Charter Amendment Effective Date and subject to
the limitations set forth in Section 4(c) below, the Holders of Series B
Preferred Stock, voting together as a separate single class, shall be
entitled to elect two (2) members of Class III of the Board of Directors at
each election of Class III directors. With respect to the two (2) directors
to be designated for election by the Holders of Series B Preferred Stock,
one individual shall be designated by SCP so long as SCP holds any Series B
Preferred Stock (the "SCP Designee for Election") and one individual shall
be designated by Tandem so long as Tandem holds any Series B Preferred
Stock (the "Tandem Designee for Election"). Each of SCP and Tandem shall
notify the Corporation in writing of the identity of its designee for
election to Class III of the Board of Directors no later than the Designee
Notice Due Date, which notice shall be conclusive evidence of the consent
of such designee to serve as a director of the Corporation. In the event
either SCP or Tandem fails to provide such notice, the SCP designee and
Tandem designee serving on the Board of Directors on the Designee Notice
Due Date shall be deemed to be the applicable designee. In the event either
SCP or Tandem has no designee serving (or otherwise designated to serve in
the event of the resignation, death, removal or inability to serve of a
designee, as provided in the last sentence of this paragraph) on the Board
of Directors on the Designee Notice Due Date, the Board of Directors shall
be entitled to make the nomination for which such notice was required. In
the event SCP or Tandem fails to hold any Series B Preferred Stock, the
Holders of Series B Preferred Stock, voting together as a separate single
class, shall be entitled to the director election rights previously held by
SCP or Tandem, as the case may be. If neither SCP nor Tandem holds any
Series B Preferred Stock, the Holders of Series B Preferred Stock, voting
together as a separate single class, shall be entitled to the director
election rights previously held by SCP and Tandem. The notice shall include
all information with respect to such designee as is required to be included
in a proxy statement soliciting proxies for the election of directors
pursuant to Regulation 14A of the Exchange Act. In the event of any vacancy
arising by reason of the resignation, death, removal (which may include a
removal by the Holders of Series B Preferred Stock, with or without cause,
at the written request of SCP or Tandem, as applicable, as the party
designating such director) or inability to serve of the SCP Designee for
Election or the Tandem Designee for Election, SCP or Tandem, as applicable
(provided SCP or Tandem, as applicable, then holds Series B Preferred
Stock) shall notify the Corporation of its choice to fill such vacancy, and
the Board of Directors shall appoint such person to fill such vacancy and
serve until the next meeting of the Corporation's stockholders for the
election of Class III directors.
The class voting rights granted to the Holders of Series B Preferred
Stock pursuant to this Section 4(b) shall be in addition to, and not in
lieu of, the voting rights granted to such Holders under Section 4(a)
hereof. Accordingly, the Holders of Series B Preferred Stock shall be
entitled to vote together with the holders of shares of the Corporation's
Common Stock as a single class with respect to the election of those
directors for which the Holders do not have class voting rights.
(c) Notwithstanding the provisions of Section 4(b) above, the class
voting rights to which the Holders of Series B Preferred Stock are entitled
pursuant to such section shall be limited, and in certain cases eliminated,
in the event the Holders of Series B Preferred Stock fail to maintain
certain threshold levels of ownership of the Corporation's voting
securities, as set forth below. In the event the sum of (i) the Holders'
Voting Shares, plus (ii) the shares of Common Stock issued and outstanding
and owned by the Holders (the total of such shares from time to time is
hereinafter referred to as the "Holders' Share Total" and with respect to a
specific Holder, a "Share Total") constitutes less than 15% of the sum of
(i) the Corporation's outstanding shares of Common Stock plus (ii) the
Holders' Voting Shares (the total of such shares is hereinafter referred to
as the "Deemed Outstanding Shares") on a Designee Notice Due Date, the
Holders of Series B Preferred Stock shall be entitled to only one designee
for nomination or election, as the case may be, with respect to such
election. In such case, SCP or Tandem, whichever entity has a higher Share
Total, shall be entitled to make such designation. In the event, SCP and
Tandem have equal Share Totals on a Designee Notice Due Date on which the
Holders are entitled to only one designee, SCP and Tandem shall agree on a
mutually acceptable designee. In the event the
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Holders' Share Total constitutes less than 10% of the Deemed Outstanding
Shares on a Designee Notice Due Date, the Holders of Series B Preferred
Stock shall not be entitled to designate a director for such election and
the Holders shall be entitled to voting rights in accordance with Section
4(a) above with respect to such election.
5. RESTRICTED ACTIONS. (a) The affirmative vote of the Majority
Holders, acting by written consent as a separate class or voting separately
as a separate class, shall be necessary to authorize the Corporation or any
Subsidiary of the Corporation to take any of the following actions:
(i) authorize, create, issue, modify the material terms of, or
change the amount of authorized or issued shares of, any Senior Capital
Stock (or any securities convertible into or exchangeable for any Senior
Capital Stock) or Indebtedness that by its terms is convertible or
exchangeable into Senior Capital Stock (or any securities convertible
into or exchangeable for Senior Capital Stock;
(ii) effect (x) any Sale of the Corporation other than a Qualified
Sale of the Corporation or a Qualified Public Offering or (y) any
Reorganization of the Corporation;
(iii) alter the rights, preferences or privileges of the Series B
Preferred Stock;
(iv) increase the authorized number of shares of Series B Preferred
Stock;
(v) redeem, purchase or otherwise acquire any shares of Common
Stock or Preferred Stock (or pay into a sinking fund for such purpose);
provided, however, that this restriction shall not apply to any
redemption specifically permitted pursuant to this Certificate of
Designation or to the repurchase of shares of Common Stock at the
original purchase price from employees, officers, directors or other
persons performing services for the Corporation.
(b) Notwithstanding the foregoing provisions of this Section 5 and
except as otherwise required by law, the creation, authorization or
issuance of any shares of any Junior Capital Stock or Parity Capital Stock,
or the increase or decrease in the amount of authorized Junior Capital
Stock or Parity Capital Stock of any class shall not require the
affirmative vote or consent of the Majority Holders and shall not be deemed
to materially affect adversely the rights, preferences, privileges or
voting rights of shares of Series B Preferred Stock.
(c) In any case in which the Holders of Series B Preferred Stock shall
be entitled to vote (as Holders of Series B Preferred Stock rather than on
an as-if-converted basis) pursuant hereto or pursuant to the General
Corporation Law of the State of Delaware, each Holder of Series B Preferred
Stock entitled to vote with respect to such matters shall be entitled to
one vote for each share of Series B Preferred Stock held.
6. CONVERSION RIGHTS.
(a) Optional Conversion. At any time and from time to time, any Holder
shall have the right, at its option, to convert all or any portion of the
shares of Series B Preferred Stock (including all accrued dividends paid or
payable in shares of Series B Preferred Stock and any fraction of a share)
held by such Holder into such number of shares of fully paid and
nonassessable Common Stock as equals the product of (i) the number of
shares of Series B Preferred Stock to be converted by such Holder and (ii)
the quotient of (x) the Purchase Price and (y) the Conversion Price in
effect on the Conversion Date. Each optional conversion of Series B
Preferred Stock shall be deemed to have been effected as of the close of
business on the effective date of such conversion specified in a written
notice by such Holder to the Corporation (the "CONVERSION DATE"); provided,
however, that the Conversion Date shall not be a date earlier than the date
such notice is so given, and if such notice does not specify a conversion
date, the Conversion Date shall be deemed to be the date such notice is
given to the Corporation. On the Conversion Date, the rights of the holder
of such Series B Preferred Stock as such Holder shall cease and the Person
or Persons in whose name or names any certificate or certificates for
shares of Common Stock are to be issued upon such conversion shall be
deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby. Notwithstanding any other provision
hereof, if a voluntary conversion of Series B Preferred Stock is to be made
in connection with a public offering other
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than a Qualified Public Offering or a Sale of the Corporation other than a
Qualified Sale of the Corporation, such conversion may, at the election of
the Holder, be conditioned upon the consummation of the respective public
offering or Sale of the Corporation, in which case such conversion shall
not be deemed to be effective until the closing of such public offering or
Sale of the Corporation, as the case may be.
(b) Mandatory Conversion. Immediately upon any Mandatory Conversion
Event, all shares of Series B Preferred Stock held by each Holder
(including all accrued dividends paid or payable in shares of Series B
Preferred Stock and any fraction of a share of Series B Preferred Stock)
shall automatically be converted into the number of fully paid and
nonassessable shares of Common Stock of the Corporation as equals the
product of (i) the number of shares of Series B Preferred Stock held by
such Holder and (ii) the quotient of (x) the Purchase Price and (y) the
Conversion Price in effect on the Conversion Date. A "MANDATORY CONVERSION
EVENT" shall mean (A) the closing of a Qualified Public Offering; (B) the
closing of a Qualified Sale of the Corporation or (C) the written election
of the Majority Holders, including each Lead Investor.
(c) Conversion Procedure.
(i) Delivery of Certificates. As soon as practicable after any
conversion of Series B Preferred Stock pursuant to this Section 6, but
in any event within ten (10) business days after the holder has
delivered the certificates or affidavits of loss, if applicable,
evidencing the shares of Series B Preferred Stock converted into shares
of Common Stock in accordance herewith, the Corporation shall deliver to
the converting holder:
(x) a certificate or certificates representing, in the
aggregate, the number of shares of Common Stock issued upon such
conversion in the same name or names as the certificates representing
the converted shares (unless such holder shall have provided written
notice to the Corporation to issue some or all of such converted
shares in another name or names, in which case the Corporation shall
deliver such certificates for such converted shares in such other
name or names provided such holder delivers to the Corporation an
opinion of counsel acceptable to the Corporation specifying that such
issuance of converted shares to other parties is permissible under an
available exemption from the registration requirements of the
Securities Act of 1933, as amended, and the securities laws of any
applicable state) and in such denomination or denominations as the
converting holder shall specify and a check for cash with respect to
any fractional interest in a share of Common Stock; and
(y) with respect to an optional conversion pursuant to Section
6(a) above, a certificate representing any shares of Series B
Preferred Stock that were represented by the certificate or
certificates delivered to the Corporation in connection with such
conversion but that were not converted.
From the Conversion Date and until such time as a holder of shares of
Series B Preferred Stock shall surrender its certificate or certificates
therefor as provided above, such certificates shall be deemed to
represent the shares of Common Stock to which such holder shall be
entitled upon the surrender thereof.
(ii) Fully Paid Shares. The issuance of certificates for shares of
Common Stock upon conversion of Series B Preferred Stock shall be made
without charge to the Holders of such Series B Preferred Stock for any
issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance
of shares of Common Stock. Upon conversion of any shares of Series B
Preferred Stock, the Corporation shall take all such actions as are
necessary in order to insure that the Common Stock so issued upon such
conversion shall be validly issued, fully paid and nonassessable.
(iii) Timely Conversion. The Corporation shall not close its books
against the transfer of Series B Preferred Stock or of Common Stock
issued or issuable upon conversion of Series B Preferred Stock in any
manner that interferes with the timely conversion of Series B Preferred
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Stock. The Corporation shall assist and cooperate with any holder of
shares of Series B Preferred Stock required to make any governmental
filings or obtain any governmental approval prior to or in connection
with any conversion of shares of Series B Preferred Stock hereunder
(including, without limitation, making any filings required to be made
by the Corporation). The Corporation shall take all such actions as may
be necessary to assure that all such shares of Common Stock may be so
issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange upon
which shares of Common Stock may be listed (except for official notice
of issuance which shall be immediately delivered by the Corporation upon
each such issuance).
(iv) Reservation of Common Stock. The Corporation shall at all
times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of issuance upon the
conversion of or otherwise pursuant to the terms of the Series B
Preferred Stock, such number of shares of Common Stock as are issuable
upon the conversion of or otherwise pursuant to the terms of all
outstanding Series B Preferred Stock.
(v) Fractional Shares. No fractional shares of Common Stock or
scrip shall be issued upon conversion of shares of the Series B
Preferred Stock. If more than one share of Series B Preferred Stock
shall be surrendered for conversion at any one time by the same Holder,
the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares
of Series B Preferred Stock so surrendered. Instead of any fractional
shares of Common Stock which would otherwise be issuable upon conversion
of any shares of Series B Preferred Stock, the Corporation shall pay a
cash adjustment in respect of such fractional interest equal to the fair
market value of such fractional interest as determined by the
Corporation's Board of Directors.
(d) Conversion Price. The initial conversion price shall be three and
14/100 dollars ($3.14), which may be adjusted from time to time hereafter
(as so adjusted, the "CONVERSION PRICE"). If and whenever on or after the
original date of issuance of the Series B Preferred Stock the Corporation
issues or sells, or in accordance with Section 6(e) below is deemed to have
issued or sold, any shares of its Common Stock or Convertible Securities
(other than Excluded Securities) for a consideration per share less than
the Conversion Price in effect immediately prior to the time of such issue
or sale, then upon such issue or sale, the Conversion Price in effect
immediately prior to the time of such issue or sale shall be reduced to an
amount equal to the consideration per share applicable to the Common Stock
or Convertible Securities so issued or sold or deemed issued or sold in
accordance with Section 6(e) below.
(e) Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under Section 6(d), the following
shall be applicable:
(i) Issuance of Convertible Securities. If the Corporation in any
manner issues or sells any Convertible Securities, whether or not the
rights to exercise, exchange or convert any such Convertible Securities
are immediately exercisable, and the price per share for which Common
Stock is issuable upon such exercise, conversion or exchange is less
than the Conversion Price in effect immediately prior to the time of
such issue or sale, then the maximum number of shares of Common Stock
issuable upon exercise, conversion or exchange of such Convertible
Securities shall be deemed to be outstanding and to have been issued and
sold by the Corporation at the time of the issuance or sale of such
Convertible Securities for such price per share. For the purposes of
this paragraph, the "PRICE PER SHARE FOR WHICH COMMON STOCK IS ISSUABLE"
shall be determined by dividing (x) the total amount received or
receivable by the Corporation as consideration for the issue or sale of
such Convertible Securities, plus the cumulative minimum aggregate
amount of additional consideration, if any, payable to the Corporation
upon the exercise, conversion or exchange thereof and, if applicable,
the exercise, conversion and exchange of any other Convertible
Securities that such Convertible Securities may be converted into or
exchanged for, by (y) the total maximum number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all such
Convertible Securities. No further adjustment of the Conversion Price
shall be made when Common
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Stock and, if applicable, any other Convertible Securities, are actually
issued upon the exercise, conversion or exchange of such Convertible
Securities.
(ii) Change in Exercise, Price or Conversion Rate. If the
additional consideration payable to the Corporation upon the exercise,
conversion or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for Common Stock, changes at any time, the Conversion Price
in effect at the time of such change shall be readjusted to the
Conversion Price that would have been in effect at such time had such
Convertible Securities that are still outstanding provided for such
changed additional consideration or changed conversion rate, as the case
may be, at the time such Convertible Securities were initially granted,
issued or sold.
(iii) Exceptions for Excluded Securities. Notwithstanding the
foregoing, no adjustments shall be made under this Section 6(e) with
respect to the issuance of any Excluded Securities.
(f) Subdivision or Combination of Common Stock. If the Corporation at
any time subdivides (by any stock split, stock dividend, recapitalization
or otherwise) its outstanding shares of Common Stock into a greater number
of shares, the Conversion Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in the event
the outstanding shares of Common Stock shall be combined (by reverse stock
split or otherwise) into a smaller number of shares, the Conversion Price
in effect immediately prior to such combination shall be proportionately
increased.
(g) Certain Events. If an event not specified in this Section 6
occurs that has substantially the same economic effect on the Series B
Preferred Stock as those specifically enumerated, then this Section 6 shall
be construed liberally, mutatis mutandis, in order to give the Series B
Preferred Stock the intended benefit of the protections provided under this
Section 6. In such event, the Corporation's Board of Directors shall make
an appropriate adjustment in the Conversion Price so as to protect the
rights of the Holders.
(h) Notices.
(i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all Holders, setting
forth in reasonable detail and certifying the calculation of such
adjustment and the facts upon which such adjustment is based.
(ii) The Corporation shall give written notice to all Holders at
least twenty (20) days prior to the date on which the Corporation closes
its books or takes a record (x) with respect to any pro rata
subscription offer to Holders of Common Stock, (y) with respect to any
Liquidation Event or (z) with respect to any other right afforded to any
holder of Common Stock.
(i) Determination of Consideration. For purposes of this Section 6,
consideration received by the Corporation for the issue or sale of
Convertible Securities in the form of property other than cash shall be
computed at the fair value thereof at the time of such issue, as determined
in good faith by the Board of Directors of the Corporation.
7. REDEMPTION.
(a) Unless the following rights are waived or deferred in writing by
the Majority Holders (including each Lead Investor), at any time after May
31, 2006, any Holder may elect to have all shares of Series B Preferred
Stock held by such Holder redeemed by the Corporation (an "OPTIONAL
REDEMPTION"). In any such case, any Holder desiring to exercise its
Optional Redemption right (a "REDEEMING HOLDER") shall notify the
Corporation in writing of its intent to exercise the rights afforded by
this Section 7(a) and specify a date not less than ten (10) nor more than
sixty (60) days from the date of such notice on which all of such Holder's
shares of Series B Preferred Stock shall be redeemed (an "OPTIONAL
REDEMPTION DATE"). Within three (3) Trading Days after receipt by the
Corporation of any such notice, the Corporation shall promptly notify each
of the other Holders in writing of such Optional Redemption and provide a
copy of the notice from such Redeeming Holder with such notice, whereupon
each of the other Holders shall have an option for a period of fifteen (15)
days to notify the Corporation in writing of its
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40
intent to exercise its Optional Redemption right on the Optional Redemption
Date. On such Optional Redemption Date, the Corporation shall redeem all
shares of Series B Preferred Stock held by such Redeeming Holder as well as
all other Holders exercising such Optional Redemption right, as aforesaid,
in cash by wire transfer of immediately available funds at a redemption
price (the "REDEMPTION PRICE") equal to the sum of (i) the product of (x)
the number of shares of Series B Preferred Stock held by such Redeeming
Holder and each other Holder, respectively, and (y) the Purchase Price and
(ii) all accrued but unpaid dividends thereon calculated to the Optional
Redemption Date.
(b) If the funds of the Corporation legally available for redemption
of shares of Series B Preferred Stock on an Optional Redemption Date are
insufficient to redeem the total number of shares of Series B Preferred
Stock requested to be redeemed by Redeeming Holders on such Optional
Redemption Date, the Redeeming Holders requesting redemption on such
Optional Redemption Date shall share ratably in any funds legally available
for redemption of such shares according to the respective amounts that
would be payable with respect to the full number of shares owned by them if
all such shares were redeemed in full. At any time, and from time to time,
thereafter when additional funds of the Corporation are legally available
for the redemption of such shares of Series B Preferred Stock, such funds
will be used at the earliest permissible time to redeem the balance of such
shares, or such portion thereof for which funds are then legally available.
Such funds shall not be used by the Corporation for any other purpose,
including the redemption by the Corporation of any shares of Convertible
Securities which the Corporation is obligated to redeem on any subsequent
date. The Corporation shall be obligated to use its reasonable efforts to
take such actions as may be necessary in order to permit the full and
timely redemption of the shares of Series B Preferred Stock entitled to
redemption.
(c) If, for any reason, the Corporation fails to redeem all shares of
Series B Preferred Stock entitled to redemption on any Optional Redemption
Date, the unredeemed shares shall remain outstanding and shall continue to
have all rights and preferences (including, without limitation, dividend
and voting rights) provided for herein and the Holders of such unredeemed
shares shall have the ongoing right to be redeemed together with such
rights and remedies as may be available under applicable law.
(d) The notices provided for in this Section 7 shall be sent, (i) if
by or on behalf of the Corporation, to the Holders at their respective
addresses as shall then appear on the records of the Corporation by first
class mail, postage prepaid, notifying such recipient of the redemption,
the date of such redemption, the number of shares of Series B Preferred
Stock to be redeemed, and the Redemption Price therefor and stating the
place or places at which the shares that have been requested to be redeemed
shall, upon presentation and surrender of such certificates representing
such shares, be redeemed, and (ii) if by or on behalf of a Holder, to the
Corporation at its executive office, currently located in Melbourne,
Florida.
(e) Any shares of Series B Preferred Stock redeemed pursuant to this
Section 7 or otherwise acquired by the Corporation in any manner whatsoever
shall be canceled and shall not under any circumstances be reissued; and
the Corporation may from time to time take such appropriate corporate
action as may be necessary to reduce accordingly the number of authorized
shares of Series B Preferred Stock.
8. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by
law, the shares of Series B Preferred Stock shall not have any preferences
or relative, participating, optional or other special rights, other than
those specifically set forth in this Certificate of Designation.
9. RANK. The Series B Preferred Stock shall, with respect to
redemption, dividend distributions and distributions upon liquidation,
winding-up and dissolution of the Corporation, rank (i) senior to all
classes of Common Stock of the Corporation, and to each other class of
Capital Stock or series of Preferred Stock (including Series A Preferred
Stock) now outstanding or hereafter created by the Board of Directors other
than Parity Capital Stock or Senior Capital Stock (collectively referred to
herein, together with all classes of Common Stock of the Corporation, as
the "JUNIOR CAPITAL STOCK"), (ii) equally with any class of Capital Stock
or series of Preferred Stock hereafter created by the Board of Directors
and which expressly provide that such class or series will rank on a parity
with the Series B Preferred Stock as to redemption, dividend distributions
and distributions upon liquidation, winding-up
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and dissolution of the Corporation (collectively referred to as "PARITY
CAPITAL STOCK"); and (iii) junior to each class of Capital Stock or series
of Preferred Stock hereafter created by the Board of Directors the terms of
which have been approved by the Majority Holders in accordance with Section
5(a)(i) hereof and which expressly provide that such class or series will
rank senior to the Series B Preferred Stock as to redemption, dividend
distributions and distributions upon liquidation, winding-up and
dissolution of the Corporation (collectively referred to as "SENIOR CAPITAL
STOCK").
10. IDENTICAL RIGHTS. Each share of the Series B Preferred Stock
shall have the same relative rights and preferences as, and shall be
identical in all respects with, all other shares of the Series B Preferred
Stock.
11. CERTIFICATES. So long as any shares of the Series B Preferred
Stock are outstanding, there shall be set forth on the face or back of each
stock certificate issued by the Corporation a statement that the
Corporation shall furnish without charge to each shareholder who so
requests, a full statement of the designation and relative rights,
preferences and limitations of each class of stock or series thereof that
the Corporation is authorized to issue and of the authority of the Board of
Directors to designate and fix the relative rights, preferences and
limitations of each series.
12. AMENDMENTS; WAIVERS. Any provision of these terms of the Series
B Preferred Stock may be amended, modified or waived if and only if the
Majority Holders (including each Lead Investor) have consented in writing
or by an affirmative vote to such amendment, modification or waiver of any
such provision of this Certificate of Designation.
13. DEFINITIONS.
"ACQUIRER STOCK" has the meaning set forth within the definition of
Qualified Sale of the Corporation.
"CAPITAL STOCK" means (a) as to any Person that is a corporation (i)
the authorized shares of such Person's capital stock, including all classes
of common, preferred, voting and nonvoting capital stock of such Person,
(ii) any rights, options or warrants to purchase any capital stock
(including all classes of common, preferred, voting and nonvoting capital
stock of such Person) of such Person, and (iii) securities of any type
whatsoever that are, or may become, convertible into or exercisable or
exchangeable for, or that carry or may carry rights to subscribe for, any
capital stock (including all classes of common, preferred, voting and
nonvoting capital stock of such Person) of such Person; and (b) as to any
Person that is not a corporation or an individual (i) the ownership
interests in such Person (however evidenced), including, without
limitation, the right to share in profits and losses, the right to receive
distributions of cash and property, and the right to receive allocations of
items of income, gain, loss, deduction and credit and similar items from
such Person, whether or not such interests include voting or similar rights
entitling the holder thereof to exercise control over such Person, and (ii)
any rights, options, warrants or securities of any type whatsoever that
are, or may become, convertible into or exercisable or exchangeable for, or
that carry or may carry rights to subscribe for, any such ownership
interests in such Person.
"CERTIFICATE OF DESIGNATION" means this Certificate of Designation of
the Series B Preferred Stock.
"CERTIFICATE OF INCORPORATION" means the Certificate of Incorporation
of the Corporation, as amended and/or restated from time to time.
"CLOSING PRICE" means on any day the reported last sale price on such
day, or in case no sale takes place on such day, the average of the
reported closing bid and ask prices on the principal national securities
exchange (which shall include NASDAQ) on which such stock is listed or
admitted to trading (and if the Common Stock is listed or admitted to
trading on more than one U.S. national or non-U.S. securities exchange, the
Corporation shall determine, in its reasonable discretion, the principal
securities exchange on which such Common Stock is listed or admitted to
trading), as reported by Bloomberg Financial Markets (or a comparable
reporting service of national reputation selected by the Corporation and
reasonably acceptable to the Majority Holders if Bloomberg Financial
Markets is not then reporting
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42
the last sale price of such security) ("BLOOMBERG"), or if not listed or
admitted to trading on any securities exchange, the last reported sale
price of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no last
sale price is reported for such security by Bloomberg, the average of the
reported closing and bid prices of all market makers for such security as
reported in the "PINK SHEETS" by the National Quotation Bureau, Inc., in
each case for such date or, if such date was not a trading date for such
security, on the next preceding date which was a trading date. If the
Closing Price cannot be calculated for such security as of either of such
dates on any of the foregoing bases, the Closing Price of such security on
such date shall be the fair market value as reasonably determined by an
investment banking firm selected by the Corporation and reasonably
acceptable to the Majority Holders, with the costs of such appraisal to be
borne by the Corporation.
"COMMON STOCK" means the Corporation's Common Stock, $.001 par value.
"COMMON STOCK DEEMED OUTSTANDING" means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock issuable upon the exercise, conversion or
exchange in full of all Convertible Securities whether or not the
Convertible Securities are exercisable for, convertible into or
exchangeable for, Common Stock at such time.
"CONVERSION DATE" has the meaning set forth in Section 6(a) hereof.
"CONVERSION PRICE" has the meaning set forth in Section 6(d) hereof.
"CONVERTIBLE SECURITIES" means securities or obligations that are
exercisable for, convertible into or exchangeable for shares of Common
Stock. The term includes options, warrants or other rights to subscribe for
or purchase Common Stock or to subscribe for or purchase other securities
that are convertible into or exercisable or exchanged for Common Stock.
"EXCLUDED SECURITIES" means any (a) shares of Common Stock or options
to purchase Common Stock, including shares of Common Stock issuable upon
exercise of such options, (as the same may be adjusted in connection with
any stock split, stock dividend, combination or recapitalization) issued or
granted pursuant to employee stock option or executive incentive ownership
plans approved by the Board of Directors and the stockholders of the
Corporation; (b) the shares of Common Stock issuable upon conversion of any
Convertible Securities outstanding on March 30, 2001 (c) the shares of
Common Stock issuable upon the conversion of the Series B Preferred Stock;
and (d) any shares of Capital Stock issued to the Corporation's
shareholders in connection with any stock split, stock dividend or
recapitalization.
"HOLDERS" means the Holders from time to time of shares of Series B
Preferred Stock, and the term "HOLDER" means any one of them.
"JUNIOR CAPITAL STOCK" has the meaning given such term in Section 9
above.
"LEAD INVESTOR" shall mean any of SCP Private Equity Partners, II,
L.P., Tandem PCS Investments, L.P., and Mellon Ventures, L.P. so long as
such party holds shares of Series B Preferred Stock.
"LIQUIDATION AMOUNT" has the meaning set forth in Section 3(a) hereof.
"LIQUIDATION EVENT" has the meaning set forth in Section 3(a) hereof.
"LOW TRADING VOLUME" means that the total number of shares of Acquirer
Stock (or any Capital Stock into which the Acquirer Stock is convertible
into, exercisable or exchangeable for) received or receivable by all
holders of Capital Stock of the Corporation in connection with a Sale of
the Corporation is greater than the average daily reported volume of
Capital Stock of the same class as the Acquirer Stock (or any Capital Stock
into which the Acquirer Stock is convertible into, exercisable or
exchangeable for) calculated based upon the average daily trading volume of
Acquirer Stock on all national securities exchanges and/or the automated
quotation system of a registered securities association (as such terms are
used in Rule 144 promulgated under the Securities Act of 1933) during the
12 week period immediately preceding the date of the closing of the Sale of
the Corporation.
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43
"MAJORITY HOLDERS" means the Holders of a majority of the outstanding
shares of Series B Preferred Stock.
"MANDATORY CONVERSION EVENT" has the meaning set forth in Section 6(b)
hereof.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"OPTIONAL REDEMPTION" has the meaning set forth in Section 7(a)
hereof.
"OPTIONAL REDEMPTION DATE" has the meaning set forth in Section 7(a)
hereof.
"PARITY CAPITAL STOCK" has the meaning set forth in Section 9 hereof.
"PERSON" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization and any government,
governmental department or agency or political subdivision thereof.
"PURCHASE PRICE" of any share of Series B Preferred Stock shall be
thirty one and 40/100 dollars ($31.40), such price to be equitably adjusted
in the event of any stock dividend, stock split, combination,
recapitalization or other similar event with respect to the Series B
Preferred Stock.
"QUALIFIED SALE OF THE CORPORATION" means any Sale of the Corporation
at a price per share in cash or other securities not less than three times
the Conversion Price other than a Sale of the Corporation in which the
Holders or any other holders of Capital Stock of the Corporation receive
Capital Stock of a Person (the "Acquirer Stock") that is subject to a
Significant Restriction.
"QUALIFIED PUBLIC OFFERING" means any public offering by the
Corporation of its Common Stock consummated pursuant to an effective
registration statement under the Securities Act of 1933 or any similar
federal statute then in force and yielding the Corporation gross proceeds
of at least $70,000,000, and at a public offering price per share of not
less than three times the then applicable Conversion Price, other than an
offering of shares being issued as consideration in a business acquisition
or combination or an offering in connection with an employee benefit plan.
"REORGANIZATION" means any merger, reorganization, recapitalization or
consolidation, which affects any Capital Stock of the Corporation, other
than a Sale of the Corporation.
"SALE OF THE CORPORATION" means a single transaction or a series of
transactions to which the Corporation is a party pursuant to which a Person
or Persons acquire (i) Capital Stock of the Corporation possessing the
voting power to elect a majority of the Corporation's board of directors or
more than fifty percent (50%) of the voting power of the Corporation
(whether by merger, consolidation or sale or transfer of the Corporation's
Capital Stock), provided, however, that a Qualified Public Offering or the
sale of Series B Preferred Stock that results in an acquisition of voting
power shall not be a Sale of the Corporation; or (ii) all or substantially
all of the Corporation's assets determined on a consolidated basis.
"SENIOR CAPITAL STOCK" has the meaning set forth in Section 9 hereof.
"SERIES A PREFERRED STOCK" means the Corporation's Series A Junior
Participating Preferred Stock.
"SERIES B DIVIDENDS" has the meaning set forth in Section 2(a) hereof.
"SERIES B PREFERRED STOCK" means the Corporation's Series B
Convertible Redeemable Preferred Stock, $.01 par value per share.
"SIGNIFICANT RESTRICTION" shall mean (a) Low Trading Volume, with
respect to any Acquirer Stock that is publicly traded and (b) any shares of
a privately-held company or shares of a publicly-traded company that are
not registered, or will not be registered within 45 days following an
applicable Sale of the Corporation, pursuant to an effective registration
statement for resale under the Securities Act of 1933, as amended.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock
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44
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or a combination thereof, or (ii)
if a partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest
in a partnership, association or other business entity if such Person or
Persons shall be allocated a majority of partnership, association or other
business entity gains or losses or shall be or control the managing general
partner of such partnership, association or other business entity.
"TRADING DAY" means, in respect of any securities exchange or
securities market, each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
14. SEVERABILITY OF PROVISIONS. If any right, preference or
limitation of the Series B Preferred Stock set forth in this Certificate of
Designation (as such Certificate of Designation may be amended from time to
time) is invalid, unlawful or incapable of being enforced by reason of any
rule, law or public policy, all other rights preferences and limitations
set forth in this Resolution (as so amended) which can be given effect
without implicating the invalid, unlawful or unenforceable right preference
or limitation shall, nevertheless, remain in full force and effect, and no
right, preference or limitation herein set forth shall be deemed dependent
upon any other right, preference or limitation unless so expressed herein.
IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf
of the Corporation by its President and Chief Executive Officer on
May 14, 2001.
By: /s/ R. Xxx Xxxxxxxx, Xx.
------------------------------------
R. Xxx Xxxxxxxx, Xx.
President and Chief Executive
Officer
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Exhibit B
MKM/032701
161930v1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of March__, 2001, by and among AirNet Communications
Corporation, a Delaware corporation (the "Company"), SCP Private Equity Partners
II, L.P., a _____________limited partnership, Tandem PCS Investments, L.P., a
Delaware limited partnership, and [___________] (the "Purchasers ").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof between the Company and the Purchasers
(the "Purchase Agreement").
The Company and the Purchasers hereby agree as follows:
1. Definitions
Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:
"Advice" shall have meaning set forth in Section 3(k).
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" means any day except Saturday, Sunday and any day
which shall be a legal holiday or a day on which banking institutions in the
state of Florida generally are authorized or required by law or other government
actions to close.
"Closing Date" shall have the meaning set forth in the Purchase
Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $.001 per
share.
"Effectiveness Date" means the 90th day following the Closing Date.
46
"Effectiveness Period" shall have the meaning set forth in
Section 2.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Filing Date" means the 45th day following the Closing Date.
"Holder" or "Holders" means the holder or holders, as the case may
be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section
5(c).
"Indemnifying Party" shall have the meaning set forth in Section
5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Preferred Stock" means the Company's Series B Convertible
Redeemable Participating Preferred Stock, par value $.01 per share, issued
pursuant to the Purchase Agreement.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"Registrable Securities" means the shares of Common Stock issuable
(i) upon conversion in full of the Preferred Stock and (ii) upon exercise in
full of the Warrants. The Company shall be required to file additional
Registration Statements to the extent the sum of (i) the number of the shares of
Common Stock into which Preferred Stock is convertible and (ii) the number of
shares of Common Stock issuable upon exercise in full of the Warrants, exceeds
the number of shares of Common Stock initially registered in accordance with the
immediately preceding sentence. The Company shall have forty-five (45) days to
file such additional Registration Statements after notice of the requirement
thereof, which the Holders may give at such time when the number of shares of
Common Stock as are issuable upon
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47
conversion of Preferred Stock and upon exercise of the Warrants, exceeds 85% of
the number of shares of Common Stock to be initially registered in a
Registration Statement hereunder.
"Registration Statement" means the registration statement and any
additional registration statements contemplated by Section 2, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated
by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Warrants" means the common stock purchase warrants issued to the
Purchasers pursuant to the Purchase Agreement.
2. Shelf Registration
On or prior to the Filing Date, the Company shall prepare and file
with the Commission a "Shelf" Registration Statement covering all Registrable
Securities described in the first sentence of the definition of "Registrable
Securities" for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith). The Registration Statement shall state, to the extent
permitted by Rule 416 under the Securities Act, that it also covers such
indeterminate number of shares of Common Stock as may be required to effect
conversion of the Preferred Stock or exercise of the Warrants, in
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48
each case to prevent dilution resulting from stock splits, stock dividends or
similar events, or by reason of changes in the Conversion Price in accordance
with the terms of the Preferred Stock or by reason of changes in the Exercise
Price (as defined in the Warrants) in accordance with the terms of the Warrants.
The Company shall use its best efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the Effectiveness Date, and shall use
its best efforts to keep such Registration Statement continuously effective
under the Securities Act until the date which is two years after the date that
such Registration Statement is declared effective by the Commission or such
earlier date when all Registrable Securities covered by such Registration
Statement have been sold or may be sold without volume restrictions pursuant to
Rule 144(k) (the "Effectiveness Period").
3. Registration Procedures
In connection with the Company's registration obligations hereunder,
the Company shall:
(a) Prepare and file with the Commission on or prior to the Filing
Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3 such
registration shall be on another appropriate form in accordance herewith), and
cause the Registration Statement to become effective and remain effective as
provided herein; provided, however, that prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be incorporated
therein by reference), the Company shall, (i) furnish to the Holders and their
counsel, copies of all such documents proposed to be filed, which documents
(other than those incorporated or deemed to be incorporated by reference) will
be subject to the review of such Holders and their counsel, and (ii) cause its
officers and directors, counsel and independent certified public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to such Holders, to conduct a reasonable investigation within
the meaning of the Securities Act.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to the Registration Statement or any
amendment thereto and as promptly as reasonably possible provide the Holders
true and complete copies of all correspondence from and to the Commission
relating to the Registration Statement; and (iv) comply in all material respects
with the provisions of the Securities Act and the Exchange Act with respect to
the disposition of all Registrable Securities covered by the Registration
Statement during the applicable period in accordance with the intended methods
of disposition
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49
by the Holders thereof set forth in the Registration Statement as so amended or
in such Prospectus as so supplemented.
(c) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(d) Furnish to each Holder and their counsel, without charge, at
least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished or
incorporated by reference) after the filing of such documents with the
Commission.
(e) Deliver to each Holder and their counsel, without charge, as
many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.
(f) Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders and
their counsel in connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any Holder requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.
(g) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to a Registration Statement, which certificates shall
be free, to the extent permitted by applicable law, of all restrictive legends,
and to enable such Registrable Securities to be in such denominations and
registered in such names as any such Holders may request at least five Business
Days prior to any sale of Registrable Securities.
(h) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on the Nasdaq National
Market ("NASDAQ") and any
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50
other securities exchange, quotation system, market or over-the-counter bulletin
board, if any, on which similar securities issued by the Company are then listed
as and when required pursuant to the Purchase Agreement.
(i) Make available for inspection by the selling Holders, any
representative of such Holders and any attorney or accountant retained by such
selling Holders at the offices where normally kept, during reasonable business
hours, all financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the officers,
directors, agents and employees of the Company and its subsidiaries to supply
all information in each case reasonably requested by any such Holder,
representative, attorney or accountant in connection with the Registration
Statement; provided, however, that any information that is determined in good
faith by the Company to be of a confidential nature need not be disclosed in the
absence of a customary confidentiality agreement.
(j) Comply with all applicable rules and regulations of the
Commission.
(k) The Company may require each selling Holder to furnish to the
Company such information regarding the distribution of such Registrable
Securities and the beneficial ownership of Common Stock held by such Holder as
is required by law to be disclosed in the Registration Statement, and the
Company may exclude from such registration the Registrable Securities of any
such Holder who unreasonably fails to furnish such information within a
reasonable time after receiving such request.
Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(e) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective and (ii) it and its
officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to the Registration Statement.
Each Holder acknowledges that the Company is currently a party to agreements
pursuant to which the Company has granted "piggyback" registration rights to
other Persons and that such other Persons may exercise their right to include
Company securities they own in the Registration Statement.
Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company (i) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iii) if at any time any of the representations and warranties of the Company
contained in any agreement contemplated hereby ceases to be true and correct in
all material respects; (iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification or
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51
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; or (v) of the occurrence of any event that makes any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any 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, in light of the circumstances under which they were
made, not misleading, such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement.
4. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
NASDAQ and any subsequent market on which the Common Stock is then listed for
trading, and (B) in compliance with state securities or Blue Sky laws
(including, without limitation, fees and disbursements of counsel for the
Holders in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as the Holders of
a majority of Registrable Securities may designate)), (ii) printing expenses,
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company and counsel for the Holders, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with the listing
of the Registrable Securities on any securities exchange as required hereunder.
5. Indemnification
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, and the officers,
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52
directors, agents and employees of each of them, each Person who controls any
such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and attorneys' fees) and
expenses (collectively, "Losses"), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that such untrue statements or omissions are based upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, which information was reasonably relied on by
the Company for use therein or to the extent that such information relates to
such Holder or such Holder's proposed method of distribution of Registrable
Securities. The Company shall notify the Holders of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company and its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses (as
determined by a court of competent jurisdiction in a final judgment not subject
to appeal or review) arising out of or based upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or in any amendment or supplement thereto, or arising out of
or based upon any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company for inclusion
in the Registration Statement or such Prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent
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53
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within thirty (30)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a)
or 5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent
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54
such action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations set
forth in Section 5(c), any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries shall, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, unless the same shall be in writing and signed by the Company and
the Holders of at least two-thirds of the then outstanding Registrable
Securities.
(d) Notices. Any and all notices or other communications or
deliveries
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55
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 8:00 p.m. (eastern standard
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in the Purchase Agreement later than 8:00 p.m.
(eastern standard time) on any date and earlier than 11:59 p.m. (eastern
standard time) on such date, (iii) the Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as follows:
If to the Company: AirNet Communications Corporation
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
With copies to: Xxxxxxx & Xxxxxx, LLP
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxx
If to the
Purchasers: To the address of such Purchaser
as it appears in the stock
transfer books of the Company
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. Each Holder may
assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.
(f) Assignment of Registration Rights. The rights of each Holder
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any Affiliate of such Holder, any
other Holder or Affiliate of any other Holder if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following
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56
such transfer or assignment the further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and applicable
state securities laws, (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this Section, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
of this Agreement, and (v) such transfer shall have been made in accordance with
the applicable requirements of the Purchase Agreement. The rights to assignment
shall apply to the Holders (and to subsequent) successors and assigns.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
(h) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Florida
without regard to the principles of conflicts of law thereof.
(i) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(j) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(k) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
AIRNET COMMUNICATIONS CORPORATION
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
SCP PRIVATE EQUITY PARTNERS II, L.P.
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
TANDEM PCS INVESTMENTS, L.P.
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
58
SIGNATURE PAGE TO
SECOND AMENDED AND RESTATED AGREEMENT
AMONG SERIES E, SERIES F AND SERIES G PREFERRED STOCKHOLDERS
AND SENIOR REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers or agents as of the date first
above written.
INVESTOR*
By:
-----------------------------------------
Its:
----------------------------------------
Date:
---------------------------------------
* Pursuant to Section 2.7 of this Agreement, the Investor is hereby added as a
party to this Agreement with respect to the Common Stock issuable upon (i) the
conversion of the Company's Series B Convertible Preferred Stock, par value $.01
per share, purchased by the Investor pursuant to that certain Securities
Purchase Agreement of even date herewith among the Company, the Investor and
certain other parties (the "Purchase Agreement") and (ii) the exercise of the
Common Stock Purchase Warrant issued to the Investor pursuant to the Purchase
Agreement (such issuable Common Stock is hereinafter collectively referred to as
the "Investor's Series B Securities"), as to which registration rights
equivalent to the rights granted hereunder were granted to the Investor under
the Purchase Agreement. Accordingly, pursuant to Section 2.7 of this Agreement,
the Investor's Series B Securities are deemed to be Registrable Securities under
this Agreement.
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
59
Exhibit C
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE
OF THIS WARRANT HAVE BEEN AND WILL BE ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE STATE SECURITIES LAW OF ANY STATE. THIS WARRANT AND
SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
April __, 2001
AIRNET COMMUNICATIONS CORPORATION
Common Stock Purchase Warrant
AIRNET COMMUNICATIONS CORPORATION, a Delaware corporation (the
"Company", hereby certifies that, for value received,
__________________________________, or its assigns (the "Purchaser"), is
entitled, subject to the terms and conditions set forth below, to purchase from
the Company that number of fully paid and non-assessable shares of Common Stock,
par value $.001 per share, of the Company ("Common Stock"), determined as set
forth in Section 1.1, at the purchase price per share of Three and 14/100
Dollars ($3.14) (the "Warrant Price"), at any time or from time to time after
the date hereof (the "Issue Date") and before 5:00 p.m., Eastern Time, on the
Expiration Date (as defined in Section 1.5).
This Common Stock Purchase Warrant ("Warrant") is granted in connection
with transactions contemplated by the Securities Purchase Agreement, dated April
2, 2001, among the Company, SCP and certain other parties (the "Stock Purchase
Agreement") entered into in connection with the Company's offering of Series B
Convertible Preferred Stock and warrants (the "Offering"). Unless the context
shall otherwise require, capitalized terms used herein shall have the meanings
assigned to them in the Stock Purchase Agreement, which also contains rules of
construction applicable to this Warrant.
1. Exercise of Warrant.
1.1 Number of Shares for Which Warrant is Exercisable. This Warrant
shall be exercisable for [30% OF THE NUMBER OF SHARES OF COMMON STOCK INTO WHICH
THE PURCHASER'S SERIES B CONVERTIBLE PREFERRED STOCK MAY BE CONVERTED AS OF THE
ISSUE DATE] fully paid and non-assessable shares of Common Stock.
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60
1.2 Manner of Exercise. The holder hereof may exercise this Warrant, in
whole or in part in the following manner:
(a) Cash Exercise. At anytime, by surrender of this Warrant to
the Company on any Business Day at its principal office, which is
currently located in Melbourne, Florida, accompanied by a statement in
the form of the subscription at the end hereof (or a reasonable
facsimile thereof), duly executed by such holder, and by consideration
in the amount obtained by multiplying (a) the number of shares of
Common Stock designated in such statement by (b) the Warrant Price, and
such holder shall thereupon be entitled to receive the number of fully
paid and non-assessable shares of Common Stock designated in such
statement. The consideration for the exercise of this Warrant shall be
(i) in the form of cash or a bank cashier's or certified check payable
to the order of the Company or (ii) by wire transfer to an account
designated in writing by the Company.
(b) Cashless Exercise. Notwithstanding anything to the
contrary contained in this Warrant, this Warrant may be exercised at
any time during the Exercise Period (as defined below) by presentation
and surrender of this Warrant to the Company on any Business Day at its
principal office, which is currently located in Melbourne, Florida,
accompanied by a statement in the form attached hereto (or a reasonable
facsimile thereof), duly executed by such holder indicating such
holder's intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon
such exercise in accordance with the terms hereof (a "Cashless
Exercise"). In the event of a Cashless Exercise, in lieu of paying the
Warrant Price in cash, the holder shall surrender this Warrant for that
number of shares of Common Stock determined by multiplying the number
of shares of Common Stock issuable upon exercise of this Warrant to
which it would otherwise be entitled by a fraction, the numerator of
which shall be the difference between the then current Market Price of
a share of the Common Stock on the date of exercise and the Warrant
Price, and the denominator of which shall be the then current Market
Price per share of Common Stock. For purposes of this Warrant, the term
"Market Price" means the average of the closing bid prices for the
shares of Common Stock as reported on the Nasdaq National Market by
Bloomberg Financial Markets ("Bloomberg") for the five consecutive
trading days immediately preceding such date, or (ii) if the Nasdaq
National Market is not the principal trading market for the shares of
Common Stock, the average of the reported bid prices reported by
Bloomberg on the principal trading market for the Common Stock during
the same period, or, if there is no bid price for such period, the last
sales price reported by Bloomberg for such period, or (iii) if the
foregoing do not apply, the last sale price of such security in the
over-the-counter market on the pink sheets or bulletin board for such
security as reported by Bloomberg, or if no sale price is so reported
for such security, the last bid price of such security as reported by
Bloomberg, or (iv) if market value cannot be calculated as of such date
on any of the foregoing bases, the Market Price shall be the average
fair market value as reasonably determined by an investment banking
firm selected by the Company and reasonably
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61
acceptable to the holder, with the costs of the appraisal to be borne
by the Company. The manner of determining the Market Price of the
Common Stock set forth in the foregoing definition shall apply with
respect to any other security in respect of which a determination as to
market value must be made hereunder.
1.3 When Exercise Effective. Each exercise of this Warrant shall be
deemed to have been effective immediately prior to the close of business on the
business day on which this Warrant is surrendered to the Company as provided in
Section 1.2, and at such time the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such exercise as provided in Section 1.4 shall be deemed to have become the
holder or holders of record thereof.
1.4 Delivery of Stock Certificates, Etc. As soon as practicable after
the exercise of this Warrant in whole or in part, and in any event within 10
days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the holder hereof or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct:
(a) a certificate or certificates for the number of validly
issued, fully paid and non-assessable shares of Common Stock to which
such holder shall be entitled upon such exercise, which shares shall be
free and clear of all taxes, liens, claims, preemptive or similar
rights, and encumbrances, and
(b) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock equal to the number of
such shares called for on the face of this Warrant minus the number of
such shares designated by the holder upon such exercise as provided in
Section 1.2.
1.5 Expiration. This Warrant shall expire on , 2011 (said
date is referred to herein as the "Expiration Date" and the period of time
between the Issue Date and the Expiration Date is referred to herein as the
"Exercise Period").
2. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, Etc. In case the Company, (a) shall consolidate with or merge
into any person and shall not be the continuing or surviving corporation of such
consolidation or merger, or (b) shall permit any other person to consolidate
with or merge into the Company and the Company shall be the continuing or
surviving person, but, in connection with such consolidation or merger, the
Common Stock shall be changed into or exchanged for stock or other securities or
property of any other person, or (c) shall transfer all or substantially all of
its properties and assets to any other person, then, and in each such case,
proper provision shall be made so that the holder of this Warrant, upon the
exercise of this Warrant at any time after the consummation of such
consolidation, merger, transfer, reorganization or reclassification, shall be
entitled to receive, in lieu of the Common Stock issuable upon such exercise
prior to such consummation, the stock and other securities and property that
such holder would have been entitled to upon such exercise if such holder had so
exercised this Warrant immediately prior thereto.
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3. Antidilution Provisions. Prior to the Expiration Date, the Warrant
Price and the number of shares of Common Stock purchaseable hereunder ("Warrant
Shares") shall be subject to adjustment from time to time as provided in this
Section 3.
(a) Adjustment of Warrant Price and Number of Shares upon Issuance of
Common Stock. Except as otherwise provided in Sections 3(b)(iv), 3(c) and 3(e)
hereof, if and whenever during the Exercise Period, after the Issue Date, the
Company issues or sells, or in accordance with Section 3(b) hereof is deemed to
have issued or sold, any shares of Common Stock for no consideration or for a
consideration per share less than the Warrant Price in effect immediately prior
to the issuance of such shares (other than any issuance pursuant to the Stock
Purchase Agreement and shares of Series B Convertible Preferred Stock issued as
dividends on the Company's Series B Convertible Preferred Stock (a "Dilutive
Issuance"), then effective immediately upon the Dilutive Issuance, the Warrant
Price in effect immediately prior to each such issuance shall forthwith be
reduced to the lowest price per share paid for such Common Stock (or deemed paid
for such Common Stock pursuant to Section 3(b)(v) below).
(b) Effect on Warrant Price of Certain Events. For purposes of
determining the adjusted Warrant Price under Section 3(a) hereof, the following
will be applicable:
(i) Issuance of Rights or Options. If the Company in any manner
issues or grants any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other securities
exercisable, convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Warrant Price in effect on the date of issuance of such Options
("Discounted Options"), then the maximum total number of shares of Common Stock
issuable upon the exercise of all such Discounted Options (assuming full
exercise, conversion or exchange of Convertible Securities, if applicable) will,
as of the date of the issuance or grant of such Discounted Options, be deemed to
be outstanding and to have been issued and sold by the Company for such price
per share. For purposes of the preceding sentence, the "price per share for
which Common Stock is issuable upon the exercise of such Discounted Options" is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or granting of all such Discounted
Options, plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of all such Discounted Options, plus,
in the case of Convertible Securities issuable upon the exercise of such
Discounted Options, the minimum aggregate amount of additional consideration
payable upon the exercise, conversion or exchange thereof at the time such
Convertible Securities first become exercisable, convertible or exchangeable, by
(ii) the maximum total number of shares of Common Stock issuable upon the
exercise of all such Discounted Options (assuming full conversion of Convertible
Securities, if applicable). No further adjustment to the Warrant Price will be
made upon the actual issuance of such Common Stock upon the exercise of such
Discounted Options or upon the exercise, conversion or exchange of Convertible
Securities issuable upon exercise of such Discounted Options.
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(ii) Issuance of Convertible Securities.
(A) If the Company in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same
are issuable upon the exercise of Options) and the price per share for which
Common Stock is issuable upon such exercise, conversion or exchange (as
determined pursuant to Section 3(b)(ii)(B) if applicable) is less than the
Warrant Price in effect on the date of issuance of such Convertible Securities,
then the maximum total number of shares of Common Stock issuable upon the
exercise, conversion or exchange of all such Convertible Securities will, as of
the date of the issuance of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. For the purposes of the preceding sentence, the "price per share for
which Common Stock is issuable upon such exercise, conversion or exchange" is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the exercise, conversion or exchange thereof at
the time such Convertible Securities first become exercisable, convertible or
exchangeable, by (ii) the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all such Convertible
Securities. No further adjustment to the Warrant Price will be made upon the
actual issuance of such Common Stock upon exercise, conversion or exchange of
such Convertible Securities.
(B) If the Company in any manner issues or sells any Convertible
Securities with a fluctuating conversion or Warrant Price or exchange ratio (a
"Variable Rate Convertible Security"), then the "price per share for which
Common Stock is issuable upon such exercise, conversion or exchange" for
purposes of the calculation contemplated by Section 3(b)(ii)(A) shall be deemed
to be the lowest price per share which would be applicable (assuming all holding
period and other conditions to any discounts contained in such Convertible
Security have been satisfied) if the Market Price in effect on the date of
issuance of such Convertible Security was 75% of the Market Price in effect on
such date (the "Assumed Variable Market Price"). Further, if the Market Price in
effect at any time or times thereafter is less than or equal to the Assumed
Variable Market Price last used for making any adjustment under this Section 3
with respect to any Variable Rate Convertible Security, the Warrant Price in
effect at such time shall be readjusted to equal the Warrant Price which would
have resulted if the Assumed Variable Market Price in effect at the time of
issuance of the Variable Rate Convertible Security had been 75% of the Market
Price in effect at the time of the adjustment required by this sentence.
(iii) Change in Option Price or Conversion Rate. If there is a
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the exercise, conversion or
exchange of any Convertible Securities; or (iii) the rate at which any
Convertible Securities are convertible into or exchangeable for Common Stock (in
each such case, other than under or by reason of provisions designed to protect
against dilution and except when an adjustment is made pursuant to Section
3(b)(ii)(B) hereof), the Warrant Price in effect at the time of such change will
be readjusted to the Warrant Price which would have been in effect
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at such time had such Options or Convertible Securities still outstanding
provided for such changed additional consideration or changed conversion rate,
as the case may be, at the time initially granted, issued or sold.
(iv) Treatment of Expired Options and Unexercised Convertible
Securities. If, in any case, the total number of shares of Common Stock issuable
upon exercise of any Option or upon exercise, conversion or exchange of any
Convertible Securities is not, in fact, issued and the rights to exercise such
Option or to exercise, convert or exchange such Convertible Securities shall
have expired or terminated, the Warrant Price then in effect will be readjusted
to the Warrant Price which would have been in effect at the time of such
expiration or termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such expiration or termination (other
than in respect of the actual number of shares of Common Stock issued upon
exercise or conversion thereof), never been issued.
(v) Calculation of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued, granted or sold for cash, the
consideration received therefor for purposes of this Warrant will be the amount
received by the Company therefor, before deduction of reasonable commissions,
underwriting discounts or allowances or other reasonable expenses paid or
incurred by the Company in connection with such issuance, grant or sale. In case
any Common Stock, Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, the amount of the
consideration other than cash received by the Company will be the fair market
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company
will be the Market Price thereof as of the date of receipt. In case any Common
Stock, Options or Convertible Securities are issued in connection with any
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair market value of
such portion of the net assets and business of the non-surviving corporation as
is attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair market value of any consideration other than cash or
securities will be determined in good faith by an investment banker or other
appropriate expert of national reputation selected by the Company and reasonably
acceptable to the holder hereof, with the costs of such appraisal to be borne by
the Company.
(vi) Exceptions to Adjustment of Warrant Price. No adjustment to the
Warrant Price will be made (i) upon the exercise or conversion of any warrants,
options, subscriptions, convertible notes, convertible debentures, convertible
preferred stock or other convertible securities issued and outstanding at
Closing (as defined in the Stock Purchase Agreement) in accordance with the
terms of such securities as of such date; (ii) upon the grant or exercise of any
stock or options which may hereafter be granted or exercised under any employee
benefit plan of the Company now existing or to be implemented in the future, or
upon grant or exercise of any stock or options to or by any officer, director or
employee of the Company, whether or not under a plan, so long as the issuance of
such stock or options is approved by a majority of the non-employee members of
the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for such purpose; (iii) upon the
issuance of any Warrants issued or issuable in accordance with the terms of the
Stock Purchase Agreement; (iv) upon exercise of the Warrants; (v) upon the
issuance of securities in
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connection with an underwritten public offering of the Company; and (vi) upon
the issuance of securities issued as the result of anti-dilution rights granted
to a third party, which securities are outstanding as of the date hereof.
(c) Subdivision or Combination of Common Stock. If the Company, at
any time during the Exercise Period subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares, then, after the date of
record for effecting such subdivision, the Warrant Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company, at
any time during the Exercise Period, combines (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record for
effecting such combination, the Warrant Price in effect immediately prior to
such combination will be proportionately increased.
(d) Adjustment in Number of Shares. Upon each adjustment of the
Warrant Price pursuant to the provisions of this Section 3, the number of shares
of Common Stock issuable upon exercise of this Warrant and for which this
Warrant is or may become exercisable shall be adjusted by multiplying a number
equal to the Warrant Price in effect immediately prior to such adjustment by the
number of shares of Common Stock issuable upon exercise of this Warrant and for
which this Warrant is or may become exercisable immediately prior to such
adjustment and dividing the product so obtained by the adjusted Warrant Price.
(e) Consolidation or Merger. In case of any consolidation of the
Company with, or merger of the Company into, any other corporation, or in case
of any sale or conveyance of all or substantially all of the assets of the
Company at any time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision will be made
whereby the holder of this Warrant will have the right to acquire and receive
upon exercise of this Warrant in lieu of the shares of Common Stock immediately
theretofore acquirable upon the exercise of this Warrant, such shares of stock,
securities, cash or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such consolidation,
merger, sale or conveyance not taken place. In any such case, the Company will
make appropriate provision to insure that the provisions of this Section 3
hereof will thereafter be applicable as nearly as may be in relation to any
shares of stock or securities thereafter deliverable upon the exercise of this
Warrant. The Company will not effect any consolidation, merger, sale or
conveyance unless prior to the consummation thereof, the successor corporation
(if other than the Company) assumes by written instrument the obligations under
this Warrant and the obligations to deliver to the holder of this Warrant such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to acquire. Notwithstanding the
foregoing, in the event of any consolidation of the Company with, or merger of
the Company into, any other corporation, or the sale or conveyance of all or
substantially all of the assets of the Company, at any time during the Exercise
Period, the holder of the Warrant shall, at its option, have the right to
receive, in connection with such transaction, cash consideration equal to the
fair market value of this Warrant as determined in accordance with customary
valuation methodology used in the investment banking industry.
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(f) Distribution of Assets. In case the Company shall declare or
make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a dividend, by way of return of capital or otherwise
(including any dividend or distribution to the Company's stockholders of cash or
shares (or rights to acquire shares) of capital stock of a subsidiary) (a
"Distribution"), at any time during the Exercise Period, then the holder of this
Warrant shall be entitled upon exercise of this Warrant for the purchase of any
or all of the shares of Common Stock subject hereto, to receive the amount of
such assets (or rights) which would have been payable to the holder had such
holder been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution.
(g) Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Warrant Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Warrant Price resulting from such adjustment and the increase or
decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the chief financial officer of the Company.
(h) Minimum Adjustment of Warrant Price. No adjustment of the
Warrant Price shall be made in an amount of less than 1% of the Warrant Price in
effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such Warrant
Price.
(i) No Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.
(j) Other Notices. In case at any time:
(i) the Company shall declare any dividend upon the Common Stock
payable in shares of stock of any class or make any other distribution (other
than dividends or distributions payable in cash out of retained earnings
consistent with the Company's past practices with respect to declaring dividends
and making distributions) to the holders of the Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;
(iii) there shall be any capital reorganization of the Company,
or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all of its assets to,
another corporation or entity; or
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(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; then, in each such case, the Company
shall give to the holder of this Warrant (a) notice of the date on which the
books of the Company shall close or a record shall be taken for determining the
holders of Common Stock entitled to receive any such dividend, distribution, or
subscription rights or for determining the holders of Common Stock entitled to
vote in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, notice of the date (or, if not then known, a
reasonable estimate thereof by the Company) when the same shall take place. Such
notice shall also specify the date on which the holders of Common Stock shall be
entitled to receive such dividend, distribution, or subscription rights or to
exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least thirty (30) days prior to the record date or the date on
which the Company's books are closed in respect thereto. Failure to give any
such notice or any defect therein shall not affect the validity of the
proceedings referred to in clauses (i), (ii), (iii) and (iv) above.
Notwithstanding the foregoing, the Company shall publicly disclose the substance
of any notice delivered hereunder prior to delivery of such notice to the holder
of this Warrant.
(k) Certain Events. If, at any time after the Issue Date, any event
occurs of the type contemplated by the adjustment provisions of this Section 3
but not expressly provided for by such provisions, the Company will give notice
of such event as provided in Section 3(g) hereof, and the Company's Board of
Directors will make an appropriate adjustment in the Warrant Price and the
number of shares of Common Stock acquirable upon exercise of this Warrant so
that the rights of the holder shall be neither enhanced nor diminished by such
event.
(l) Certain Definitions.
(i) "Common Stock Deemed Outstanding" shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) in the case of any
adjustment required by Section 3(a) resulting from the issuance of any Options,
the maximum total number of shares of Common Stock issuable upon the exercise of
the Options for which the adjustment is required (including any Common Stock
issuable upon the conversion of Convertible Securities issuable upon the
exercise of such Options), and (y) in the case of any adjustment required by
Section 3(a) resulting from the issuance of any Convertible Securities, the
maximum total number of shares of Common Stock issuable upon the exercise,
conversion or exchange of the Convertible Securities for which the adjustment is
required, as of the date of issuance of such Convertible Securities, if any.
Except as specifically provided by the foregoing, no other derivative securities
(and underlying shares) shall be deemed outstanding for purposes of this
definition.
(ii) "Common Stock," for purposes of this Section 3, includes the
Common Stock and any additional class of stock of the Company having no
preference as to dividends or distributions on liquidation, provided that the
shares purchasable pursuant to this Warrant shall include only Common Stock in
respect of which this Warrant is exercisable, or
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shares resulting from any subdivision or combination of such Common Stock, or in
the case of any reorganization, reclassification, consolidation, merger, or sale
of the character referred to in Section 3(e) hereof, the stock or other
securities or property provided for in such Section.
4. Covenants of the Company; No Dilution or Impairment. Until the
Expiration Date, or the exercise of this Warrant in full, the Company shall not,
by amendment of its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but shall at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against dilution or other impairment. Without
limiting the generality of the foregoing, the Company:
(a) shall take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock upon the exercise
of this Warrant; and
(b) shall not (i) transfer all or substantially all of its
properties and/or assets to any other person, or (ii) consolidate with
or merge into any other person where the Company is not the continuing
or surviving person, or (iii) permit any other person to consolidate
with or merge into the Company where the Company is the continuing or
surviving person but, in connection with such consolidation or merger,
the Common Stock then issuable upon the exercise of this Warrant shall
be changed into or exchanged for stock or other securities or property
of any other person unless, in any such case, the other person
acquiring such properties and assets, continuing or surviving after
such consolidation or merger or issuing or distributing such stock or
other securities or property, as the case may be, shall expressly
assume in writing and be bound by all the terms of this Warrant.
(c) shall promptly secure the listing of the shares of Common
Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which
shares of Common Stock are then listed or become listed (subject to
official notice of issuance upon exercise of this Warrant) and shall
maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant; and the Company shall so
list on each national securities exchange or automated quotation
system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise
of this Warrant if and so long as any shares of the same class shall be
listed on such national securities exchange or automated quotation
system; and
(d) shall, on or before the date of issuance of any shares of
Common Stock issuable upon exercise of this Warrant, take such actions
as the Company shall reasonably determine are necessary to qualify such
shares of Common Stock for, or obtain exemption for such shares of
Common Stock for, sale to the holder
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of this Warrant upon the exercise hereof under applicable securities or
"blue sky" laws of the states of the United States, and shall provide
evidence of any such action so taken to the holder of this Warrant
prior to such date; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i)
qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this subsection, (ii) subject itself to
general taxation in any such jurisdiction or (iii) file a general
consent to service of process in any such jurisdiction.
5. Notices of Record Date, Etc. If the Company proposes:
(a) to take a record of the holders of any class of securities
for the purpose of determining holders thereof who are entitled to vote
at any meeting of stockholders for any purpose (or to take action by
written consent in lieu of a meeting) or who are entitled to receive
any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all of the assets of
the Company to any other person or any consolidation or merger
involving the Company and any other person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding up of the Company,
the Company shall mail to the holder of this Warrant a notice stating the date
or expected date on which any such record is to be taken and, if it relates to a
meeting (or action by written consent), the matters to be considered at such
meeting (or to be approved by such consent), or the amount and character or such
dividend, distribution or right, or the nature of such reorganization,
reclassification, transfer, merger, consolidation, dissolution, liquidation or
winding-up. Such notice shall be given at least 14 days prior to the date
therein specified.
6. Exchange of Warrant. Upon surrender for exchange of this Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or upon the order of the holder thereof a new Warrant of like tenor,
in the name of such holder or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant so surrendered.
7. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
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8. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise. This remedy of specific enforcement shall not be exclusive,
and shall be in addition to any other remedy which the holder hereof may have.
9. Ownership of Warrant. Until this Warrant is transferred on the books
of the Company, the Company may treat the person in whose name this Warrant is
issued as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary, except that, if and when this Warrant is properly assigned in
blank, the Company may (but shall not be obligated to) treat the bearer hereof
as the absolute owner of this Warrant for all purposes, notwithstanding any
notice to the contrary. This Warrant, if properly assigned, may be exercised by
a new holder without first having a new Warrant issued.
10. Notices. All notices, consents and other communications under this
Warrant shall be in writing and shall be deemed given when delivered personally
or when mailed by registered mail, return receipt requested, to a party at its
address as follows (or such other address as a party may designate by notice
given to the other parties pursuant to this Section 10): (a) if to the Company,
0000 Xxx Xxxx, Xxxxxxxxx, XX 00000, Attention: President; and (b) if to the
holder of this Warrant, at such address as shall have been furnished to the
Company in writing by such holder, or, until an address is so furnished, to
[_______________________________________].
11. Successors. This Warrant will be binding upon any entity succeeding
to the Company by merger, consolidation, or acquisition of all or substantially
all of the Company's assets.
12. Registration Rights. The initial holder of this Warrant (and
certain assignees thereof) is entitled to the benefit of such registration
rights in respect of the shares of Common Stock issuable upon exercise of this
Warrant as are set forth in the Stock Purchase Agreement and that certain Second
Amended and Restated Agreement among Series E, Series F and Series G Preferred
Stockholders and Senior Registration Rights Agreement, dated as of September 7,
1999, and amended as of September 20, 1999, by and among the Company and certain
of its stockholders and to which the holder hereof will become a party with
respect to such shares on the Issue Date, including the right to assign such
rights to certain assignees, as set forth therein.
13. Miscellaneous.
(a) Neither this Warrant nor any term hereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge
or termination is made in writing and executed by both parties.
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(b) This Warrant shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware applicable to
contracts made and to be performed therein.
14. Expiration. The right to exercise this Warrant shall expire at 5:00
p.m., Eastern Time, on the Expiration Date.
AIRNET COMMUNICATIONS CORPORATION
By:
----------------------------------------------
R. Xxx Xxxxxxxx
President and Chief Executive Officer
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FORM OF SUBSCRIPTION
[To be signed only upon exercise of Warrant]
TO AirNet Communications Corporation
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by such Warrant for, and to
purchase thereunder, ________ shares of Common Stock of AirNet Communications
Corporation and herewith [makes payment of the Warrant Price (as defined in the
Warrant) with respect to each share in full][elects to effect a Cashless
Exercise (as defined in the Warrant)], and requests that the certificates for
such shares be issued in the name of, and delivered to, _______________, whose
address if ___________________________________.
Dated:
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
Signed in the presence of:
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FORM OF ASSIGNMENT
[To be signed only upon transfer of Warrant]
For value received, the undersigned hereby sells, assigns and transfers
unto _____________________ the right represented by the within Warrant to
purchase __________ shares of Common Stock of AirNet Communications Corporation
to which the within Warrant relates, and appoints ________________________,
Attorney to transfer such right on the books of AirNet Communications
Corporation, with full power of substitution in the premises.
Dated:
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
Signed in the presence of:
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Exhibit D
[CLOSING DATE]
To: Purchasers of Purchased Securities
named on Schedule 2.1 to the
Securities Purchase Agreement
Re: AirNet Communications Corporation
Ladies and Gentlemen:
We have acted as counsel to AirNet Communications Corporation, a
Delaware corporation (the "COMPANY"), in connection with the issuance and sale
of up to 955,414 shares of Series B Convertible Preferred Stock, $.01 par value
per share, of the Company (the "SERIES B PREFERRED SHARES") and warrants to
purchase up to 2,866,242 shares of the Company's authorized but unissued Common
Stock, $0.001 par value per share (the "WARRANTS" and, together with the Series
B Preferred Shares, collectively the "PURCHASED SECURITIES"), to the Purchasers
named on SCHEDULE 2.1 to that certain Securities Purchase Agreement (the
"SECURITIES PURCHASE AGREEMENT") dated as of April 2, 2001 among the Company and
the Purchasers (the "OFFERING"). This opinion is being furnished to you pursuant
to Section 5.5 of the Securities Purchase Agreement. All capitalized terms used
but not otherwise defined herein shall have the respective meanings ascribed to
such terms in the Securities Purchase Agreement.
We have examined the following documents:
(a) Securities Purchase Agreement;
(b) Stock certificates evidencing the Series B Preferred Shares;
(c) Warrant certificates evidencing the Warrants;
(d) Registration Rights Agreement (the "REGISTRATION RIGHTS
AGREEMENT") and applicable counterpart signature pages thereto
signed by the Company and the Purchasers;
(e) Escrow Agreement ("ESCROW AGREEMENT") dated as of April 2,
2001 among the Company, the Purchasers and SunTrust Bank, as
escrow agent (the "ESCROW AGENT");
(f) Management Rights Letter Agreement dated as of the date hereof
between the Company and SCP Private Equity Partners, II, L.P.,
Information Rights Letter Agreement dated as of the date
hereof between the Company and Tandem PCS Instruments, L.P.,
and Information Rights Letter Agreement dated as of the date
hereof between the Company and Mellon Ventures, L.P.
(collectively, the "INVESTOR RIGHTS AGREEMENTS");
(g) Certificate of Incorporation of the Company, certified by the
Delaware Secretary of State as of April ___, 2001, as amended
by the Certificate of Designation for Series B Convertible
Preferred Stock (the "CHARTER AMENDMENT"), certified by the
Delaware Secretary of State as of May ___, 2001 (collectively,
the "CHARTER");
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(h) Certificate of the Delaware Secretary of State dated April
___, 2001 as to the valid legal existence of the Company as of
such date;
(i) By-laws of the Company, certified by the Secretary of the
Company as of the date hereof (the "BY-LAWS");
(j) Resolutions of the Company's Board of Directors authorizing
the issuance and sale of the Purchased Securities and the
other transactions contemplated by the Securities Purchase
Agreement, certified by the Secretary of the Company as of the
date hereof; and
(k) Resolutions approved by the stockholders of the Company in
connection with the stockholder approval of the issuance and
sale of the Purchased Securities and the other transactions
contemplated by the Securities Purchase Agreement, certified
by the Secretary of the Company as of the date hereof.
The documents described in clauses (a) through (f) above are
collectively referred to as the "INVESTMENT DOCUMENTS".
We also have examined such records and proceedings of the Company, have
made such searches and examined such other documents, statutes, public records
and certificates of officers of the Company and of public officials, and have
considered such questions of law, as we have considered necessary in order to
enable us to give the opinions herein expressed. However, in connection with the
opinion provided in paragraph 8 below, we advise you that we have not conducted
a search of the dockets of all courts or other governmental entities or
undertaken a judgment search for judgments against the Company in all
jurisdictions, where there could exist evidence of any litigation, proceeding or
investigation at law or in equity or in arbitration pending or threatened
against the Company.
The opinions herein expressed relate only to the laws of the State of
Florida, the General Corporation Law of the State of Delaware and the federal
laws of the United States.
In giving the opinions herein expressed, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures (other than
those on behalf of the Company) appearing on the documents examined by us, the
authenticity and completeness of all documents submitted to us as originals and
the conformity to the originals of all documents submitted to us as certified,
notarized, conformed or photostatic copies or facsimiles. With respect to all
matters of fact (including factual conclusions and characterizations and
descriptions of purpose, intention, or other state of mind), we have relied
entirely upon the representations of the parties set forth in the Investment
Documents and representations and certifications of officers of the Company set
forth in the President and Chief Executive Officer's Certificate and the
Officer's Certificate (collectively, the "OFFICER'S CERTIFICATES") attached as
Exhibit A hereto, and have assumed the accuracy of those representations and
certificates. The opinions expressed below are made in reliance upon the
accuracy of the representations and other factual information contained in the
Investment Documents and Officer's Certificates and otherwise obtained during
our examination of the documents and other matters described above. Expect to
the extent expressly set forth herein, however, we have not undertaken any
independent investigation to determine the
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existence or absence of such facts, and no inference as to our knowledge of the
existence or absence of such facts should be drawn from our representation of
the Company.
When an opinion or other statement set forth herein is given to our
knowledge, with reference to matters of which we are aware or that are known to
us, or with a similar qualification, the relevant knowledge or awareness is
limited solely to the actual knowledge of the individual lawyers who are
currently partners or employees in this firm who have participated directly in
the specific transactions to which this opinion letter relates or who represent
the Company on a regular basis.
We have also assumed the due authorization, execution and delivery by
the Purchasers and the Escrow Agent of each of the Investment Documents to which
they are a party and that each of the Investment Documents to which they are a
party is enforceable against them.
The opinions express below are subject to the following qualifications:
(a) The validity and enforceability of the Investment Documents may be
subject to and affected by applicable bankruptcy, insolvency, fraudulent
conveyance, equitable subordination, reorganization, arrangement, moratorium,
avoidance or other laws relating to or affecting the rights of creditors
generally.
(b) The validity and enforceability of the Investment Documents and
particular provisions thereof are subject to or may be affected by limitations
imposed by general principles of equity and the availability of equitable
remedies (regardless of whether enforcement is considered in proceedings at law
or in equity) and by limitations on the availability of specific performance,
injunctive relief or other equitable remedies.
(c) The validity and enforceability of the Investment Documents may be
subject to or affected by statutory or decisional law limiting or rendering
ineffective obligations to indemnify or the waiver or release of rights or
defenses.
(d) Certain rights, remedies, forfeitures, penalties, waivers or
elections contained in the Investment Documents may be rendered ineffective or
limited by applicable laws or judicial decisions governing such provisions, but
such laws and judicial decisions do not, in our opinion, make the Investment
Documents inadequate for the substantive realization of the benefit intended to
be provided thereby.
Based and relying upon and subject to the foregoing, we are of the
opinion that:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the corporate power and authority to carry on its
business as presently conducted, to enter into and perform each of the
Investment Documents, to issue, sell and deliver the Purchased Securities and to
issue and deliver the Common Stock upon conversion or exercise of the Purchased
Securities.
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3. All necessary corporate and stockholder action has been taken under
Delaware law and under the Charter and By-Laws by or on behalf of the Company to
authorize the execution, delivery and performance of each of the Investment
Documents. Each of the Investment Documents has been duly executed and delivered
by or on behalf of the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against it in accordance with their
respective terms.
4. The execution and delivery by the Company of the Investment
Documents and the consummation of the transactions contemplated thereby,
including, without limitation, the issuance of the Purchased Securities in
accordance with the Securities Purchase Agreement and the issuance of the Common
Stock upon the conversion or exercise of the Purchased Securities, do not and
will not: (i) conflict with the Charter or By-laws of the Company, (ii) violate
any judgment, decree, order, writ, law, statute, rule or regulation known to us
to be applicable to the Company, or (iii) constitute a default under any
material agreement known to us to which the Company is a party or by which it is
bound.
5. The Charter Amendment has been duly authorized by the Company and
duly filed with the Delaware Secretary of State, has become effective and is
legally valid, binding and enforceable against the Company.
6. Each of the Purchased Securities has been duly authorized and, upon
issuance, delivery and payment for the Preferred Shares in accordance with the
Securities Purchase Agreement, such shares will be duly issued, fully paid and
non-assessable and not subject to any preemptive rights of the holders of any
other class or series of capital stock of the Company under the Charter or
By-laws or any agreement known to us to which the Company is a party or by which
it is bound.
7. The shares of Common Stock issuable upon the conversion or exercise
of Purchased Securities have been duly authorized, have been duly and properly
reserved for issuance and upon issuance, (assuming full payment for the shares
of Common Stock issuable upon exercise of the Warrants in accordance with the
terms of the Warrants) such shares of Common Stock will be duly issued, fully
paid and non-assessable and not subject to any preemptive rights of the holders
of any other class or series of capital stock of the Company under the Charter
or By-laws or any agreement known to us to which the Company is a party or by
which it is bound.
8. Except as disclosed in SCHEDULE 3.9 of the Securities Purchase
Agreement, we have no knowledge of any litigation, proceeding or investigation
at law or in equity or in arbitration pending or threatened against the Company
which would reasonably be expected to have a Material Adverse Effect on the
Company or which would materially and adversely affect the validity or
enforceability of, or the authority of the Company to perform its obligations
under, the Investment Documents.
9. All material consents, approvals and authorizations required to be
obtained by the Company from any governmental authority or agency in connection
with the issuance of the Purchased Securities, or the Common Stock issuable upon
conversion or exercise of the Purchased Securities (assuming conversion or
exercise of the Purchased Securities on the date
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hereof), have been obtained or made, other than the following: (i) filings
pursuant to Regulation D under the Securities Act; and (ii) required
registration, qualification or filings under any state securities or "Blue Sky"
laws or regulations thereunder.
We have participated in advising the Company as to the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the
applicable rules and regulations thereunder. We also have participated in
conferences with officers and other representatives of the Company, at which
matters related to the Offering were discussed. There is no assurance that all
possible material facts as to the Company were disclosed at such conferences or
that our familiarity with the Company's business is such that we have
necessarily recognized the materiality of such facts that were disclosed.
Although we have made certain inquiries and investigations in connection with
the Offering, we have not, except with respect to matters expressly covered by
this opinion, independently checked or verified the accuracy or completeness of
the information provided by the Company and the limitations inherent in the role
of outside counsel are such that we cannot and do not assume responsibility for
or pass on the accuracy or completeness of such information. Subject to the
foregoing, nothing has come to our attention to lead us to believe that the
Company has done anything that would render unavailable the exemption from
registration under Regulation D under the Securities Act, or the exemption from
registration under the Florida Securities and Investor Protection Act, in
connection with the Offering, it being understood that no opinion is expressed
as to any subsequent resale of the Series B Preferred Shares or the Warrants or
the Common Stock issuable upon conversion or exercise of the Series B Preferred
Shares or the Warrants, or as to compliance with any state (other than Florida)
securities laws, rules, regulations or orders.
The opinions expressed herein are limited in all respects to applicable
law as existing on the date hereof. We render no opinion on matters except as
specifically stated. In rendering this opinion letter, we do not undertake to
advise you or update you of any change in any applicable law or any fact that
may occur after the date hereof or to supplement this opinion to reflect any
facts or circumstances which may hereafter come to our attention, including
changes in laws which may hereafter occur.
This opinion letter is furnished by us to you solely for your benefit
with respect to the transactions contemplated by the Investment Documents. This
opinion letter may not be relied upon by any other person or entity or for any
other purpose without, in each case, our express written consent. This opinion
is not to be referred to or quoted in any document, report or financial
statement, or filed with, or delivered to, any governmental agency or other
person or entity, without our prior written consent in each instance.
Very truly yours,
XXXXXXX & XXXXXX, LLP
By: ____________________________
Partner
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Exhibit E
CLOSING ESCROW AGREEMENT
THIS CLOSING ESCROW AGREEMENT (this "AGREEMENT") is made as of April 2,
2001 among AirNet Communications Corporation (the "COMPANY"), the entities
designated as Purchaser on the signature page hereto (collectively,
"PURCHASERS") and SunTrust Bank ("ESCROW AGENT").
Recitals
The Company and Purchasers are parties to the Securities Purchase
Agreement dated as of the date hereof (the "PURCHASE AGREEMENT") relating to the
purchase and sale of shares of the Company's authorized but unissued Series B
Convertible Preferred Stock, $0.01 par value (the "PREFERRED SHARES") and
certain warrants to purchase shares of the Company's authorized but unissued
Common Stock, $0.001 par value per share, described therein (the "WARRANTS" and,
together with the Preferred Shares, the "PURCHASED SECURITIES"). In connection
with the consummation of the Purchase Agreement, Purchasers are depositing the
Escrow Amount (as defined herein) with the Escrow Agent to be held and released
as set forth herein.
Agreement
NOW, THEREFORE, the Company, Purchasers and Escrow Agent hereby agree
that, in consideration of the mutual promises and covenants contained herein,
Escrow Agent shall hold in escrow and shall distribute the Escrow Funds (as
defined herein) in accordance with and subject to the following Instructions and
Terms and Conditions:
I. INSTRUCTIONS
1. Escrow Account. The Escrow Agent has established the account or
accounts identified on Exhibit A attached hereto (collectively, the "ESCROW
ACCOUNT") into which Purchasers have deposited, or simultaneously with the
execution hereof will deposit, the Escrow Amount set forth on Exhibit A attached
hereto (the "ESCROW AMOUNT"); provided, that the obligation of each of
Purchasers SCP Private Equity Partners II, L.P. and Tandem PCS Investments, L.P.
to fund up to $5,000,000 of its portion of the Escrow Account may be delayed for
up to eleven (11) business days following the date hereof in accordance with
Section 2.2(a) of the Purchase Agreement (the "DELAYED FUNDING"). The foregoing
funds, plus all interest, dividends and other distributions and payments thereon
(collectively the "DISTRIBUTIONS"), received by Escrow Agent are collectively
referred to herein as the "ESCROW FUNDS." The Escrow Agent shall hold and
disburse the Escrow Funds as set forth in this Agreement. During the time that
the Escrow Funds are in escrow hereunder, the Escrow Amount shall not be deemed
to have been delivered to the Company.
2. Distribution of Escrow Funds. The Escrow Agent shall promptly
release the Escrow Funds to the appropriate parties as described below in the
following circumstances:
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(a) upon receipt by the Escrow Agent of written notice (the "CLOSING
NOTICE") from the Company of the satisfaction of all of the conditions to
closing specified in Articles V and VIII of the Purchase Agreement (other than
delivery of the Preferred Shares and Warrants required by Section 5.8 of the
Purchase Agreement and the delivery of the purchase price therefor to the
Company, but including without limitation evidence of approval of a majority of
the Company's common shares outstanding of the transactions contemplated by the
Purchase Agreement as may be required by the rules and regulations of the Nasdaq
Stock Market Inc.), the Escrow Agent shall, on the Closing Date specified in the
Purchase Agreement (i) disburse the Escrow Amount to or at the direction of the
Company (in accordance with the wire transfer instructions of the Company set
forth on Exhibit B attached hereto or such other written instructions as the
Company may give to the Escrow Agent), and (ii) disburse all Distributions, pro
rata in relation to the principal amount of the Escrow Funds received from each
Purchaser (and taking into account any Delayed Funding), to or at the direction
of the Purchasers (to each in accordance with their respective wire transfer
instructions set forth on Exhibit B attached hereto or such other written
instructions as the Purchasers may give to the Escrow Agent);
(b) if the Escrow Agent does not receive the Closing Notice on or
before June 30, 2001, then on the next succeeding business day, the Escrow Agent
shall, automatically and without any need for further action by any party,
disburse (i) the principal amount of the Escrow Funds to or at the direction of
the Purchasers from whom such funds were received; and (ii) all Distributions,
pro rata in relation to the principal amount of the Escrow Funds received from
each Purchaser (and taking into account any Delayed Funding), to or at the
direction of the Purchasers (in the case of clauses (i) and (ii), to each in
accordance with their respective wire transfer instructions set forth on Exhibit
B attached hereto or such other written instructions as the Purchasers may give
to the Escrow Agent);
(c) upon receipt by the Escrow Agent of written notice (the
"TERMINATION NOTICE") either (A) from the Company or the Purchasers as a result
of the termination of the Purchase Agreement under Article XII thereof or (B)
from the Purchasers as a result of a failure by the Company's qualified
independent auditors to issue an unqualified audit report in connection with the
Company's financial statements for the year ended December 31, 2000 included in
the Company's annual report on Form 10-K for such year, then on the next
business day following the Escrow Agent's receipt of the Termination Notice, the
Escrow Agent shall, automatically and without any need for further action by any
party, disburse (i) the principal amount of the Escrow Funds to or at the
direction of the Purchasers from whom such funds were received; and (ii) all
Distributions, pro rata in relation to the principal amount of the Escrow Funds
received from each Purchaser (and taking into account any Delayed Funding), to
or at the direction of the Purchasers (in the case of clauses (i) and (ii), to
each in accordance with their respective wire transfer instructions set forth on
Exhibit B attached hereto or such other written instructions as the Purchasers
may give to the Escrow Agent);
(d) if the Escrow Agent receives joint written instructions from the
Company and the Purchasers directing the Escrow Agent to disburse the Escrow
Funds, then the Escrow Agent shall disburse the Escrow Funds in accordance with
such instructions; and
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(e) if the Escrow Agent receives a final order of a court of
competent jurisdiction authorizing the Escrow Agent to disburse the Escrow
Funds, then the Escrow Agent shall disburse the Escrow Funds in accordance with
such order.
3. Investment of Escrow Funds. The Escrow Agent shall invest or
reinvest the Escrow Funds, without distinction between principal and income, in
the account set forth on Exhibit A attached hereto or as directed in writing by
the Company and the Purchasers. The Escrow Agent shall have no liability for any
loss arising from or related to any such investment other than in accordance
with paragraph II.5 hereof. For tax purposes, interest and other income earned
on the Escrow Funds shall be reported as income of the party to whom the
Distributions are disbursed pursuant to paragraph I.2 hereof. Neither the
Company nor any Purchaser has any right to receive, pledge, borrow or otherwise
obtain the benefits of the Escrow Funds at any time while held in escrow in
accordance with this Agreement.
II. TERMS AND CONDITIONS
1. The Company hereby covenants and agrees with the Purchasers that the
Company will deliver to each of the Purchasers, at the address of each specified
on Exhibit C hereto, a copy of the notice to the Escrow Agent specified in
paragraph I.2(a) of this Escrow Agreement concurrently with or prior to delivery
of such notice to the Escrow Agent, together with evidence of shareholder
approval of the transactions specified in the Purchase Agreement from the
Company's proxy solicitation agent.
2. The duties, responsibilities and obligations of the Escrow Agent
shall be limited to those expressly set forth herein and no duties,
responsibilities or obligations shall be inferred or implied. The Escrow Agent
shall not be subject to, nor required to comply with, any other agreement
between or among any or all of the Company and the Purchasers or to which the
Company and the Purchasers are a party, even though reference thereto may be
made herein, or to comply with any direction or instruction (other than those
contained herein or delivered in accordance with this Escrow Agreement) from the
Company or the Purchasers or any entity acting on its or their behalf. The
Escrow Agent shall not be required to, and shall not, expend or risk any of its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder.
3. This Agreement is for the exclusive benefit of the parties hereto
and their respective successors hereunder, and shall not be deemed to give,
either express or implied, any legal or equitable right, remedy, or claim to any
other entity or person whatsoever.
4. If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects Escrow Funds (including but not
limited to orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of the Escrow Funds), the Escrow
Agent is authorized to comply therewith in any manner as it or its legal counsel
of its own choosing deems appropriate; and if the Escrow Agent complies with any
such judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process,
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the Escrow Agent shall not be liable to any of the parties hereto or to any
other person or entity even though such order, judgment, decree, writ or process
may be subsequently modified or vacated or otherwise determined to have been
without legal force or effect.
5. (a) The Escrow Agent shall not be liable for any action taken or
omitted or for any loss or injury resulting from its actions or its performance
or lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part. In no event shall the Escrow Agent
be liable (i) for acting in accordance with or relying upon any instruction,
notice, demand, certificate or document from the Company or the Purchasers or
any entity acting on behalf of the Company or the Purchasers, (ii) for any
consequential, punitive or special damages, (iii) for the acts or omissions of
its nominees, correspondents, designees, subagents or subcustodians, or (iv) for
an amount in excess of the value of the Escrow Funds, valued as of the date of
deposit.
(b) If any fees, expenses or costs incurred by, or any obligations
owed to, the Escrow Agent hereunder are not promptly paid when due, the Company
shall be solely responsible for reimbursing the Escrow Agent and the Escrow
Agent may reimburse itself therefor only from Escrow Funds released from escrow
to the Company pursuant to this Agreement and may sell, convey or otherwise
dispose of any such property for such purpose. The Company shall indemnify,
defend and save the Purchasers harmless of, from and against any and all fees,
expenses and costs incurred by the Escrow Agent in connection with its
obligations under this Escrow Agreement.
(c) The Escrow Agent may consult with legal counsel at the sole
expense of the Company as to any matter relating to this Escrow Agreement, and
the Escrow Agent shall not incur any liability in acting in good faith in
accordance with any advice from such counsel.
(d) The Escrow Agent shall not incur any liability for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of the Escrow Agent
(including but not limited to any act or provision of any present or future law
or regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
6. Unless otherwise specifically set forth herein, the Escrow Agent
shall proceed as soon as practicable to collect any checks or other collection
items at any time deposited hereunder. All such collections shall be subject to
the Escrow Agent's usual collection practices or terms regarding items received
by the Escrow Agent for deposit or collection. The Escrow Agent shall not be
required, or have any duty, to notify anyone of any payment or maturity under
the terms of any instrument deposited hereunder, nor to take any legal action to
enforce payment of any check, note or security deposited hereunder or to
exercise any right or privilege which may be afforded to the holder of any such
security.
7. The Escrow Agent shall provide to the Company and the Purchasers
monthly statements identifying transactions, transfers or holdings of the Escrow
Funds and each such statement shall be deemed to be correct and final upon
receipt thereof by the Company and the
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Purchasers unless the Escrow Agent is notified in writing to the contrary within
thirty (30) business days of the date of such statement.
8. The Escrow Agent shall not be responsible in any respect for the
form, execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to execute
or deliver any such document, security or endorsement.
9. Notices, instructions or other communications shall be in writing
and shall be given via facsimile, hand delivery, overnight delivery (via a
nationally recognized overnight courier service), or first-class mail (postage
prepaid) to the address set forth in Exhibit C attached hereto (or to such other
address as may be substituted therefor by written notification to the Escrow
Agent, the Company or the Purchasers). Notices to the Escrow Agent shall be
deemed to be given when actually received by the Escrow Agent's Corporate Trust
Department. The Escrow Agent is authorized to comply with and rely upon any
notices, instructions or other communications believed by it to have been sent
or given by the Company or the Purchasers or by a person or persons authorized
by the Company or the Purchasers. Whenever under the terms hereof the time for
giving a notice or performing an act falls upon a Saturday, Sunday, or banking
holiday, such time shall be extended to the next day on which the Escrow Agent
is open for business.
10. The Company shall be solely liable for and shall reimburse and
indemnify the Escrow Agent and hold the Escrow Agent harmless from and against
any and all claims, losses, liabilities, costs, damages or expenses (including
reasonable attorneys' fees and expenses) (collectively, "LOSSES") arising from
or in connection with or related to this Escrow Agreement or being the Escrow
Agent hereunder (including but not limited to Losses incurred by the Escrow
Agent in connection with its successful defense, in whole or in part, of any
claim of gross negligence or willful misconduct on its part), provided, however,
that nothing contained herein shall require the Escrow Agent to be indemnified
for Losses caused by its gross negligence or willful misconduct.
11. (a) The Company and the Purchasers may remove the Escrow Agent at
any time by giving to the Escrow Agent thirty (30) calendar days' prior notice
in writing signed by the Company and each of the Purchasers. The Escrow Agent
may resign at any time by giving to the Company and the Purchasers fifteen (15)
calendar days' prior written notice thereof.
(b) Within ten (10) calendar days after giving the foregoing notice
of removal to the Escrow Agent or receiving the foregoing notice of resignation
from the Escrow Agent, the Company and the Purchasers shall jointly agree on and
appoint a successor Escrow Agent. If a successor Escrow Agent has not accepted
such appointment by the end of such 10-day period, the Escrow Agent may, in its
sole discretion, deliver the Escrow Funds to the Company and the Purchasers at
the addresses provided herein or may apply to a court of competent jurisdiction
for the appointment of a successor Escrow Agent or for other appropriate relief.
The costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Escrow Agent in
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connection with such proceeding shall be paid by, and be deemed the sole
obligation of, the Company.
(c) Upon receipt of the identity of the successor Escrow Agent, the
Escrow Agent shall either deliver the Escrow Funds then held hereunder to the
successor Escrow Agent, less the Escrow Agent's fees, costs and expenses or
other obligations owed to the Escrow Agent, or hold such Escrow Funds (or any
portion thereof), pending distribution, until all such fees, costs and expenses
or other obligations are paid.
(d) Upon delivery of the Escrow Funds to a successor Escrow Agent,
the Escrow Agent shall have no further duties, responsibilities or obligations
hereunder.
12. (a) In the event of any ambiguity or uncertainty hereunder or in
any notice, instruction or other communication received by the Escrow Agent
hereunder, the Escrow Agent may, in its sole discretion, refrain from taking any
action other than retain possession of the Escrow Funds, unless the Escrow Agent
receives written instructions, signed by the Company and each Purchaser, which
eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims by or
among the Company and the Purchasers and/or any other person or entity with
respect to any Escrow Funds, the Escrow Agent shall be entitled, in its sole
discretion, to refuse to comply with any and all claims, demands or instructions
with respect to such Escrow Funds so long as such dispute or conflict shall
continue, and the Escrow Agent shall not be or become liable in any way to the
Company or any Purchaser for failure or refusal to comply with such conflicting
claims, demands or instructions. The Escrow Agent shall be entitled to refuse to
act until, in its sole discretion, either (i) such conflicting or adverse claims
or demands shall have been determined by a final order, judgment or decree of a
court of competent jurisdiction, which order, judgment or decree is not subject
to appeal, or settled by agreement between the conflicting parties as evidenced
in a writing satisfactory to the Escrow Agent or (ii) the Escrow Agent shall
have received security or an indemnity satisfactory to it sufficient to hold it
harmless from and against any and all Losses which it may incur by reason of so
acting. The Escrow Agent may, in addition, elect, in its sole discretion, to
commence an interpleader action or seek other judicial relief or orders as it
may deem, in its sole discretion, necessary. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with such
proceeding shall be paid by, and shall be deemed the sole obligation of, the
Company.
13. This Agreement shall be interpreted, construed, enforced and
administered in accordance with the internal substantive laws (and not the
choice of law rules) of the State of New York. Each of the Company and the
Purchasers hereby submits to the personal jurisdiction of and each agrees that
all proceedings relating hereto shall be brought in courts located within the
City and State of New York or elsewhere as the Escrow Agent may select. Each of
the Company and the Purchasers hereby waives the right to trial by jury and to
assert counterclaims in any such proceedings. To the extent that in any
jurisdiction the Company or the Purchasers may be entitled to claim, for itself
or its assets, immunity from suit, execution, attachment (whether before or
after judgment) or other legal process, each hereby irrevocably agrees not to
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85
claim, and hereby waives, such immunity. Each of the Company and the Purchasers
waives personal service of process and consents to service of process by
certified or registered mail, return receipt requested, directed to it at the
address last specified for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed.
14. Except as otherwise permitted herein, this Escrow Agreement may be
modified only by a written amendment signed by all the parties hereto, and no
waiver of any provision hereof shall be effective unless expressed in a writing
signed by the party to be charged.
15. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall not
preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.
16. Each of the Company and the Purchasers hereby represents and
warrants, as to itself only, (a) that this Escrow Agreement has been duly
authorized, executed and delivered on its behalf and constitutes its legal,
valid and binding obligation and (b) that the execution, delivery and
performance of this Escrow Agreement by the Company and the Purchasers, as
applicable, do not and will not violate any applicable law or regulation.
17. The invalidity, illegality or unenforceability of any provision of
this Agreement shall in no way affect the validity, legality or enforceability
of any other provision; and if any provision is held to be enforceable as a
matter of law, the other provisions shall not be affected thereby and shall
remain in full force and effect.
18. This Agreement (together with the Purchase Agreement, as between
the Purchasers and the Company) shall constitute the entire agreement of the
parties with respect to the subject matter and supersedes all prior oral or
written agreements in regard thereto. In the event of any inconsistency between
the terms of this Escrow Agreement and the terms of the Purchase Agreement with
respect to the subject matter hereof, the terms of this Escrow Agreement shall
prevail.
19. This Escrow Agreement shall terminate upon the distribution of all
Escrow Funds. The provisions of these Terms and Conditions shall survive
termination of this Escrow Agreement and/or the resignation or removal of the
Escrow Agent.
20. No printed or other material in any language, including
prospectuses, notices, reports, and promotional material which mentions the
Escrow Agent by name or the rights, powers, or duties of the Escrow Agent under
this Agreement shall be issued by any other parties hereto, or on such party's
behalf, without the prior written consent of the Escrow Agent.
21. The headings contained in this Escrow Agreement are for convenience
of reference only and shall have no effect on the interpretation or operation
hereof.
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86
22. This Escrow Agreement may be executed by each of the parties hereto
in any number of counterparts, each of which counterpart, when so executed and
delivered, shall be deemed to be an original and all such counterparts shall
together constitute one and the same agreement.
23. The Escrow Agent does not have any interest in the Escrow Funds
deposited hereunder but is serving as escrow holder only and having only
possession thereof. The Company, alone, shall pay or reimburse the Escrow Agent
upon request for any transfer taxes or other taxes relating to the Escrow Funds
incurred in connection herewith and shall indemnify and hold harmless the Escrow
Agent against any amounts that it is obligated to pay in the way of such taxes.
Any payments of income from the Escrow Funds shall be subject to withholding
regulations then in force with respect to United States taxes. The parties
hereto will provide the Escrow Agent with appropriate W-9 forms for tax I.D.,
number certifications, or W-8 forms for non-resident alien certifications. It is
understood that the Escrow Agent shall be responsible for income reporting only
with respect to income earned on investment of funds which are a part of the
Escrow Funds and is not responsible for any other reporting. This paragraph and
paragraph II.10 hereof shall survive notwithstanding any termination of this
Escrow Agreement or the resignation of the Escrow Agent.
[SIGNATURE PAGE FOLLOWS]
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87
SIGNATURE PAGE FOR CLOSING ESCROW AGREEMENT
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth above.
COMPANY: AIRNET COMMUNICATIONS CORPORATION
By:
---------------------------------------
Name: R. Xxx Xxxxxxxx, Xx.
Title: President and Chief Executive Officer
PURCHASER: SCP PRIVATE EQUITY PARTNERS II, L.P.
By: SCP Private Equity II, General Partner, L.P.,
Its General Partner
By: SCP Private Equity II General Partner, LLC,
Its Manager
By:
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: A Manager
PURCHASER: TANDEM PCS INVESTMENTS, L.P.
By:
--------------------------------------------------
Name: Xxxxxx Xxxxxxxx
-----------------------------------------------
Title: Vice President
-----------------------------------------------
By:
--------------------------------------------------
Name: Xxxx X. XxXxxxxx
-----------------------------------------------
Title: Director
-----------------------------------------------
PURCHASER: MELLON VENTURES, L.P.
By: MVMA, L.P., its General Partner
By: MVMA, Inc., its General Partner
By:
--------------------------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------------------------
Title: Associate
-----------------------------------------------
ESCROW AGENT: SUNTRUST BANK, as Escrow Agent
By:
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: First Vice President
88
Exhibit A
DEPOSITS
1. Escrow Amount: $30,000,000
2. The Escrow Amount shall be funded as follows ($10,000,000 from each
Purchaser, subject to any Delayed Funding in accordance with Section
2.2(a) of the Purchase Agreement):
Bank: SunTrust Bank, Melbourne Branch
ABA Number: # 000000000
Account Number: # 0643643222535
Reference: Securities Purchase Escrow for AirNet
Communications Corp.,
SunTrust Bank as Escrow Agent
89
Exhibit B
DISBURSEMENTS
1. Company Wire Instructions:
Bank: SunTrust Bank
Orlando, Florida
ABA Number: 0631-02152
Swift Number: XXXXXX0X
Account Name: AirNet Communications
Corporation
Account Number: 0643643210564
2. Purchaser SCP Private Bank: --
Equity Partners II, L.P. ABA Number: --
Wire Instructions: Account Name: --
Account Number: --
3. Purchaser Tandem PCS Bank: Bank of New York
Investments, L.P. Swift Code: IRVT US 3N
Wire Instructions: Compte de Caisse Centrale
Xxxxxxxxxx, Montreal
Account Number: 000-0000-000
Chips UID 238324
ABA Number: 000000000
4. Purchaser Mellon Bank: Mellon Bank, N.A.
Ventures, L.P. Wire ABA Number: 000-0000-00
Instructions: Account Name: Mellon Ventures, L.P.
Account Number: 021-6928
3. Escrow Agent Wire Bank: SunTrust Bank as Escrow
Instructions: Agent
ABA Number: 000000000
Account Number: 0643643222535
Reference: Securities Purchase
Escrow for AirNet
Communications Corp.
90
Exhibit C
ADDRESSES
Escrow Agent: SunTrust Bank
000 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Company Address: AirNet Communications Corporation
0000 Xxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
Telephone : (000) 000-0000
with a copy (which shall not
constitute notice) to: Xxxxxxx & Xxxxxx, LLP
Xxx Xxxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Purchasers Addresses: SCP Private Equity Partners II, L.P.
300 Building
000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Tandem PCS Investments, L.P.
C/o Life Cycles Holding Co.
0000 Xxxxxx XxXxxx Xxxxxxx
Xxxxxxxx, Xxxxxx X0X 0X0, Xxxxxx
Attention: Xx. Xxxx XxXxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
91
Mellon Ventures, L.P.
In Care of
Mellon Ventures, Inc.
Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Mr. Xxx Xxxxx
92
EXHIBIT F
[AIRNET LETTERHEAD]
May 15, 2001
SCP Private Equity Partners II, L.P.
000 Xxxxx Xxxx Xxxxx, Xxxx. 000
Xxxxx, XX 00000-0000
Re: Management Rights
Gentlemen:
This letter will confirm our agreement that pursuant to and effective as of
your purchase of 318,471.33 shares of Series B Convertible Preferred Stock of
AirNet Communications Corporation (the "Company"), the Company has agreed to
contractually provide SCP Private Equity Partners II, L.P. (the "Investor")
with certain management rights with respect to the Company. The Company and the
Investor acknowledge that the provisions of this letter agreement are intended
to provide the Investor with management rights with respect to the Company
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder. The management rights the
Investor shall possess are the following:
The Investor shall be entitled to consult with and advise management
of the Company on significant business issues, including management's proposed
annual operating plans, and management will meet with the Investor regularly
during each year at the Company's facilities at mutually agreeable times for
such consultation and advice and to review progress in achieving such plans.
The Investor shall have the right to examine the books and records of
the Company and inspect its facilities and may request information at
reasonable times and intervals concerning the general status of the Company's
financial condition and operations, including, but not limited to, all
financial statements, operating reports, budgets, and other financial reports,
provided that access to highly confidential proprietary information and
facilities need not be provided.
If the Investor is not represented on the Company's Board of
Directors, the Company shall give a representative of the Investor, upon
written request, copies of all notices, minutes, consents and other material
that the Company provides to its directors, except that the representative may
be excluded from access to any material or meeting or portion thereof if the
Company believes, upon advice of counsel, that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons. Upon
reasonable notice and at a scheduled meeting of the Board of Directors or such
other time, if any, as the Board of Directors may determine in its sole
discretion, such representative may address the Board of Directors with respect
to the Investor's concerns regarding significant business issues facing the
Company.
93
SCP Private Equity Partners II, L.P.
May 15, 2001
Page 2
The Investor agrees, and any representative of the Investor will agree, to
hold in confidence and trust and not use or disclose any confidential
information provided to or learned by it in connection with its rights under
this letter agreement. This confidentiality obligation will survive any
termination of this letter agreement.
This letter agreement may not be amended except by a writing signed by the
parties hereto.
Very truly yours,
AIRNET COMMUNICATIONS CORPORATION
By: /s/ R. Xxx Xxxxxxxx, Xx.
_______________________________
Name: R. Xxx Xxxxxxxx, Xx.
________________________
Title: President and CEO
________________________
Agreed and Accepted as of
the date set forth above:
SCP PRIVATE EQUITY PARTNERS II, L.P.
By: SCP Private Equity II, General Partner, L.P.,
its General Partner
By: SCP Private Equity II General Partner, LLC,
its Manager
By: /s/ Xxxxx X. Xxxxx
_________________________________
Name: Xxxxx X. Xxxxx
__________________________
Title: Manager
__________________________
- 2 -
94
EXHIBIT G
[AIRNET LETTERHEAD]
May 15, 2001
Tandem PCS Investments, L.P.
x/x Xxxx Xxxxxx Xxxxxxx Xx.
0000 XxXxxx College Avenue, 0xx Xxxxx
Xxxxxxxx, Xxxxxx
X0X 0Xx, Xxxxxx
Re: Information Rights
Gentlemen:
This letter will confirm our agreement that pursuant to and effective as
of your purchase of 318,471.33 shares of Series B Convertible Preferred Stock
of AirNet Communications Corporation (the "Company"), the Company has agreed to
contractually provide Tandem PCS Investments, L.P. and its affiliates (the
"Investor") with certain information rights with respect to the Company. The
Company and the Investor acknowledge that the provisions of this letter
agreement are intended to provide the Investor with certain information rights
with respect to the Company. The information rights the Investor shall possess
are the following:
The Investor shall be entitled to consult with and advise management
of the Company on significant business issues, including management's proposed
annual operating plans, and management will meet with the Investor regularly
during each year at the Company's facilities at mutually agreeable times for
such consultation and advice and to review progress in achieving such plans.
The Investor shall have the right to examine the books and records
of the Company and inspect its facilities and may request information at
reasonable times and intervals concerning the general status of the Company's
financial condition and operations, including, but not limited to, all
financial statements, operating reports, budgets, and other financial reports,
provided that access to highly confidential proprietary information and
facilities need not be provided.
If the Investor is not represented on the Company's Board of
Directors, the Company shall give a representative of the Investor, upon
written request, copies of all notices, minutes, consents and other material
that the Company provides to its directors, except that the representative may
be excluded from access to any material or meeting or portion thereof if the
Company believes, upon advice of counsel, that such exclusion is reasonably
necessary to preserve the attorney-client privilege, to protect highly
confidential proprietary information or for other similar reasons. Upon
reasonable notice and at a scheduled meeting of the Board of Directors or such
other time, if any, as the Board of Directors may determine in its sole
discretion, such representative may address the Board of Directors with respect
to the Investor's concerns regarding significant business issues facing the
Company.
The Investor agrees, and any representative of the Investor will agree,
to hold in confidence and trust and not use or disclose any confidential
information provided to or learned
95
Tandem PCS Investments, L.P.
May 15, 2001
Page 2
by it in connection with its rights under this letter agreement. This
confidentiality obligation will survive any termination of this letter
agreement.
This letter agreement may not be amended except by a writing signed by the
parties hereto.
Very truly yours,
AIRNET COMMUNICATIONS CORPORATION
By: /s/ R. Xxx Xxxxxxxx, Xx.
-----------------------------
Name: R. Xxx Xxxxxxxx, Xx.
Title: President and CEO
Agreed and Accepted as of
the date set forth above:
TANDEM PCS INVESTMENTS, L.P.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
96
Exhibit H
[AIRNET LETTERHEAD]
May 15, 2001
Mellon Ventures, L.P.
Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000-0000
Re: Information Rights
Gentlemen:
This letter will confirm our agreement that pursuant to and effective as
of your purchase of 318,471.33 shares of Series B Convertible Preferred Stock
of AirNet Communications Corporation (the "Company"), the Company has agreed to
contractually provide Mellon Ventures, L.P. and its affiliates (the "Investor")
with certain information rights with respect to the Company. The Company and
the Investor acknowledge that the provisions of this letter agreement are
intended to provide the Investor with certain information rights with respect
to the Company. The information rights the Investor shall possess are the
following:
The Investor shall have the right to examine the books and records of
the Company and inspect its facilities and may request information at
reasonable times and intervals concerning the general status of the Company's
financial condition and operations, including, but not limited to, all
financial statements, operating reports, budgets, and other financial reports,
provided that access to highly confidential proprietary information and
facilities need not be provided.
If the Investor is not represented on the Company's Board of
Directors, the Company shall (i) permit a representative of the Investor to
attend all of the Company's Board of Directors' meetings (including any meeting
of any committee thereof) with full observer status as though he or she was a
member of the Board of Directors and (ii) provide a representative of the
Investor copies of all notices, minutes, consents and other material that the
Company provides to its directors, (to be provided at the same time and in the
same manner as is transmitted or communicated to members of its Board of
Directors) except that the representative may be excluded from access to any
material or meeting or portion thereof if the Company believes, upon advice of
counsel, that such exclusion is reasonably necessary to preserve the
attorney-client privilege, to protect highly confidential proprietary
information or for other similar reasons. Upon reasonable notice and at a
scheduled meeting of the Board of Directors or such other time, if any, as the
Board of Directors may determine in its sole discretion, such representative
may address the Board of Directors with respect to the Investor's concerns
regarding significant business issues facing the Company.
The Investor agrees, and any representative of the Investor will agree, to
hold in confidence and trust and not use or disclose any confidential
information provided to or learned
97
Mellon Ventures, Inc.
May 15, 2001
Page 2
by it in connection with its rights under this letter agreement. This
confidentiality obligation will survive any termination of this letter
agreement.
This letter agreement may not be amended except by a writing signed by the
parties hereto. The Investor and the Company agree that upon the written
request of the Investor made to the Secretary of the Company, that the Investor
will immediately cease upon receipt of such notice to be provided any such
materials or other confidential materials referenced in the second or third
paragraph of this letter. The Company understands that the foregoing sentence
is a material inducement to the Investor making the further investment in the
Company.
Very truly yours,
AIRNET COMMUNICATIONS CORPORATION
By: /s/ R. Xxx Xxxxxxxx, Xx.
____________________________________
Name: R. Xxx Xxxxxxxx, Xx.
______________________________
Title: President and CEO
______________________________
Agreed and Accepted as of
the date set forth above:
MELLON VENTURES, L.P.
By: MVMA, L.P., its General Partner
By: NVMA, Inc., its General Partner
By:__________________________________________
Name:________________________________________
Title:_______________________________________
