EXHIBIT 99.2
PROXIM, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (this "Agreement") is
made and entered into as of November 27, 2001, by and between Proxim, Inc., a
Delaware corporation (the "Company"), and each of the purchasers listed on
Exhibit A attached hereto (collectively, the "Purchasers" and individually, a
"Purchaser").
RECITALS
WHEREAS, the Company desires to sell to the Purchasers, and the
Purchasers desire to purchase from the Company, shares of Common Stock, par
value $0.001 per share, of the Company (the "Common Stock") and warrants to
purchase additional shares of the Company's Common Stock on the terms and
conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK AND WARRANTS.
(a) Authorization. The Company's Board of Directors has
authorized the issuance, pursuant to the terms and conditions of this Agreement,
of up to 3,643,425 shares of Common Stock (the "Purchased Shares") plus 728,682
shares of Common Stock issuable upon exercise of the warrants (the "Warrant
Shares").
(b) Agreement to Purchase and Sell Common Stock. Subject to the
terms and conditions of this Agreement, each Purchaser severally agrees to
purchase, and the Company agrees to sell and issue to each Purchaser, at the
Closing (as defined below), that number of Purchased Shares set forth opposite
such Purchaser's name on Exhibit A attached hereto. The purchase price of each
Purchased Share (the "Per Share Price") shall be eight dollars and twenty-three
and four-tenths cents ($8.234).
(c) Agreement to Purchase and Sell Warrants. Subject to the terms
and conditions of this Agreement, each Purchaser severally agrees to purchase,
and the Company agrees to sell and issue to each Purchaser a warrant (the
"Warrants") in the form attached hereto as Exhibit B-1 for all Purchasers other
than Global Equity Arbitrage Master Ltd. and PIPES Corporate Strategies Ltd.
(together, the "UBS Investment Entities") and with respect to the UBS Investment
Entities only, in the form attached hereto as Exhibit B-2, to purchase the
number of Warrant Shares set forth opposite such Purchaser's name on Exhibit A
hereto. The purchase price of each Warrant Share shall be $0.001.
(d) Use of Proceeds. The Company will apply the net proceeds from
the sale of the Purchased Shares and the Warrants for general corporate purposes
and, without limiting the generality of the foregoing, shall not use such
proceeds to make a loan to any employee, officer, director or stockholder of the
Company, to repay any loan or other obligation of the Company to any such person
or to repurchase or pay a dividend on shares of Common Stock or other securities
of the Company, other than any such payment explicitly required or permitted by
the terms of this Agreement.
(e) Arms Length. The Company acknowledges and agrees that each of
the Purchasers is acting solely in the capacity of an arm's length purchaser
with respect to this Agreement and the transactions contemplated hereby and that
each Purchaser has acted separately with respect to this Agreement.
2. CLOSING. The purchase and sale of the Purchased Shares and the
Warrants shall take place at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx, at 10:00
a.m. California time, on November 27, 2001, or at such other time and place as
the Company and the Purchasers mutually agree upon (which time and place are
referred to in this Agreement as the "Closing"). At the Closing, the Company
shall authorize its transfer agent to issue to each Purchaser no later than
three (3) days following the Closing, against delivery of payment for the
Purchased Shares, one or more stock certificates (the "Certificates") registered
in the name of such Purchaser, representing the number of shares set forth
opposite such Purchaser's name on Exhibit A hereto, and bearing the legend set
forth in Section 4(j) herein. The Company shall deliver to each Purchaser a
Warrant to purchase the number of Warrant Shares set forth opposite such
Purchaser's name on Exhibit A hereto against delivery of payment for such
Warrants. Closing documents may be delivered by facsimile with original
signature pages sent by overnight courier. The date of the Closing is referred
to herein as the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Purchaser that the statements in this Section 3
are true and correct, except as set forth in the SEC Documents (as defined
below) or in the Disclosure Letter delivered to such Purchaser concurrently
herewith:
(a) Organization Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all corporate power and authority required
to (a) carry on its business as presently conducted and (b) enter into this
Agreement and the other agreements, instruments and documents contemplated
hereby, and to consummate the transactions contemplated hereby and thereby. The
Company is qualified to do business and is in good standing in each jurisdiction
in which the failure to so qualify would have a Material Adverse Effect. As used
in this Agreement, "Material Adverse Effect" means collectively a material
adverse effect on, or a material adverse change in, or a group of such effects
on or changes in, (i) the business, operations, financial condition, results of
operations, assets or liabilities of the applicable party and its subsidiaries,
taken as a whole, (ii) the transactions contemplated hereby, (iii) the Purchased
Shares or the Warrant Shares or (iv) the ability of the Company to perform its
obligations under this Agreement.
-2-
(b) Capitalization. The capitalization of the Company, without
giving effect to the transactions contemplated by this Agreement, is as follows.
The authorized stock of the Company consists only of (i) 100,000,000 shares of
Common Stock, of which 27,599,915 shares were issued and outstanding as of
September 30, 2001; (ii) 30,000 shares of Series A Participating Preferred
Stock, none of which is issued or outstanding on the date hereof; and (iii)
5,000,000 shares of undesignated Preferred Stock, none of which is issued or
outstanding on the date hereof. All such shares of Common Stock have been duly
authorized, and all such issued and outstanding shares of Common Stock have been
validly issued, are fully paid and nonassessable. No such outstanding shares of
Common Stock were issued in violation of any pre-emptive rights, "poison pill"
provisions, rights of first offer or refusal, or similar rights.
As of the date hereof, the Company has reserved: (i) 97,492
shares of Common Stock for issuance upon exercise of options granted or
available for grant to employees and consultants of the Company under the
Company's 1986 Stock Option Plan; (ii) 5,729,541 shares of Common Stock for
issuance upon exercise of awards granted or available for grant to employees,
consultants and officers of the Company under the Company's 1995 Long-Term
Incentive Plan; (iii) 466,668 shares of Common Stock for issuance upon exercise
of options granted to directors of the Company under the Company's 1994 Director
Option Plan; (iv) 1,360,563 shares of Common Stock for issuance to employees of
the Company under the Company's 1993 Employee Stock Purchase Plan; (v) 8,000,000
shares of Common Stock for issuance upon exercise of options granted or
available for grant to employees of the Company under the Company's 1999
Non-Statutory Stock Option Plan; and (vi) 363,428 shares of Common Stock for
issuance in connection with the exercise of outstanding warrants. All shares of
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There are
no other equity securities, options, warrants, calls, rights, commitments or
agreements of any character to which the Company is a party or by which it is
bound obligating the Company to issue, deliver, sell, repurchase or redeem, or
cause to be issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Company or obligating the Company to grant, extend or enter
into any such equity security, option, warrant, call, right, commitment or
agreement. The Company does not have any subsidiaries, nor does the Company own
any capital stock, assets comprising the business of, obligations of, or any
other interest (including any equity or partnership interest) in, or any
outstanding loan or advance to or from, any person or entity. The Company has no
outstanding debt.
(c) Due Authorization. All corporate actions on the part of the
Company necessary for the authorization, execution, delivery of, and the
performance of all obligations of the Company under this Agreement and the
Warrants, and the authorization, issuance, reservation for issuance and delivery
of all of the Purchased Shares being sold under this Agreement and all of the
Warrant Shares issuable upon exercise of the Warrants have been taken, and this
Agreement constitutes, and the Warrants when executed, will constitute, legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except (a) as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or others laws of general application
relating to or affecting the enforcement of creditors' rights generally and (ii)
the effect of rules of
-3-
law governing the availability of equitable remedies and (b) as rights to
indemnity or contribution may be limited under federal or state securities laws
or by principles of public policy thereunder.
(d) Valid Issuance of Stock.
(i) Valid Issuance. The shares of Common Stock to be issued
pursuant to this Agreement will be, upon payment therefor by the Purchasers in
accordance with this Agreement, duly authorized, validly issued, fully paid and
non-assessable, free and clear of all liens, claims and encumbrances, except
encumbrances or restrictions arising under federal or state securities laws. The
Warrant Shares have been duly and validly authorized and reserved for issuance
and, upon issuance, sale and delivery in accordance with the terms of the
Warrants, for the consideration provided for therein, will be duly and validly
issued, fully paid and non-assessable free and clear of all liens, claims and
encumbrances, except encumbrances or restrictions arising under federal or state
securities laws.
(ii) Compliance with Securities Laws. Subject to the accuracy
of the representations made by the Purchasers in Section 4 hereof (and assuming
no change in applicable law and no unlawful distribution of Purchased Shares or
the Warrants by the Purchasers or other parties), the Purchased Shares, the
Warrants and the Warrant Shares will be issued to the Purchasers in compliance
with applicable exemptions from (i) the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended (the "Securities Act")
and (ii) the registration and qualification requirements of all applicable
securities laws of the states of the United States. The Company believes that it
is eligible to file a registration statement on Form S-3 under the Securities
Act and is current in its filings with the SEC under Section 13(a) of the
Exchange Act.
(e) Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, or notice to, any federal, state or local governmental authority on
the part of the Company is required in connection with the issuance of the
Purchased Shares, the Warrants or, as of the date hereof, the Warrant Shares, to
the Purchasers, or the consummation of the other transactions contemplated by
this Agreement, other than any filing that may be required pursuant to
Regulation D promulgated under the Securities Act. Such filings will be made
within the time prescribed by law.
(f) Non-Contravention. The execution, delivery and performance of
this Agreement and the Warrants by the Company, and the consummation by the
Company of the transactions contemplated hereby (including issuance of the
Purchased Shares, the Warrants, and the Warrant Shares), do not (i) contravene
or conflict with the Certificate of Incorporation or Bylaws of the Company; (ii)
constitute a material violation of any provision of any federal, state, local or
foreign law binding upon or applicable to the Company; (iii) constitute a
default or require any consent under, give rise to any right of termination,
cancellation or acceleration of, or to a loss of any material benefit to which
the Company is entitled under, or result in the creation or imposition of any
lien, claim or encumbrance on any assets of the Company under, any material
contract to which the Company is a party or any material permit, license or
similar right relating to the Company or by which the Company may be bound or
affected, or the triggering of any preemptive or anti-dilution
-4-
rights or rights of first refusal or first offer, or any similar rights (whether
pursuant to a "poison pill" provision or otherwise), on the part of holders of
the Company's or any such subsidiary's securities.
(g) Litigation. There is no action, suit, proceeding, claim,
arbitration, investigation or inquiry ("Action") pending or, to the Company's
knowledge, threatened: (a) against the Company, its activities, properties or
assets, or any officer, director or employee of the Company in connection with
such officer's, director's or employee's relationship with, or actions taken on
behalf of, the Company, that is reasonably likely to have a Material Adverse
Effect (including, but not limited to, delisting), or (b) that seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Agreement
(including issuance of the Purchased Shares, the Warrants and the Warrant
Shares). The Company is not a party to or subject to the provisions of, any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. No Action by the Company is currently pending nor does the
Company intend to initiate any Action that is reasonably likely to have a
Material Adverse Effect.
(h) Compliance with Law and Charter Documents. The Company is not
in violation or default of any provisions of its Certificate of Incorporation or
Bylaws, both as amended. The Company has complied in all respects and is in
compliance with all applicable statutes, laws, rules, regulations and orders of
the United States of America and all states thereof, foreign countries and other
governmental bodies and agencies having jurisdiction over the Company's business
or properties, except for any instance of non-compliance that has not had, and
would not reasonably be expected to have, a Material Adverse Effect.
(i) SEC Documents.
(1) Reports. The Company has made available to each
Purchaser prior to the date hereof copies of its Annual Report on Form 10-K for
the fiscal year ended December 31, 2000, its quarterly reports on Form 10-Q for
the fiscal quarters ended March 31, 2001, June 30, 2001 and September 30, 2001
and its Proxy Statement for its 2001 Annual Meeting of Stockholders filed by the
Company with the Securities and Exchange Commission ("SEC") (the Form 10-K,
Forms 10-Q and Proxy Statement are collectively referred to herein as the "SEC
Documents"). Each of the SEC Documents, as of the respective date thereof (or if
amended or superseded by a filing prior to the Closing Date, then on the date of
such filing), did not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. The
Company is not a party to any material contract, agreement or other arrangement
that was required to have been filed as an exhibit to the SEC Documents that was
not so filed. With the exception of any information related to this Agreement
and the transactions contemplated thereby, the Company represents that it has
not provided any "material nonpublic information" to any Purchaser, as such is
defined under applicable law, rule and regulation.
(2) Financial Statements. The financial statements of
the Company and the related notes contained in the SEC Documents present fairly,
in accordance with generally accepted accounting principles, the financial
position of the Company as of the dates indicated, and the results of its
operations and cash flows for the period therein specified, subject, in
-5-
the case of unaudited financial statements for interim periods, to normal
year-end audit adjustments. Such financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods therein
specified, except that unaudited financial statements may not contain all
footnotes required by generally accepted accounting principles.
(3) Listing. The Company's Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and is listed on the Nasdaq
National Market (the "Nasdaq Stock Market"), and, to its knowledge, the Company
has taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of its Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq Stock Market. The Company has
not received any notification that, and has no knowledge that, the SEC or the
NASD is contemplating terminating such listing or registration. The issuance of
the shares pursuant to the Offering does not require stockholder approval,
including, without limitation, pursuant to the Nasdaq Marketplace Rules. The
Company will comply with all requirements of the NASD with respect to the
issuance of the Shares and the listing thereof on the Nasdaq Stock Market.
(j) Absence of Certain Changes Since Balance Sheet Date. Since
September 30, 2001, the business and operations of the Company have been
conducted in the ordinary course consistent with past practice, and there has
not been:
(i) any declaration, setting aside or payment of any dividend
or other distribution of the assets of the Company with respect to any shares of
capital stock of the Company or any repurchase, redemption or other acquisition
by the Company or any subsidiary of the Company of any outstanding shares of the
Company's capital stock;
(ii) any damage, destruction or loss, whether or not covered
by insurance, except for such occurrences, individually and collectively, that
have not had, and would not reasonably be expected to have, a Material Adverse
Effect;
(iii) any waiver by the Company of a valuable right or of a
material debt owed to it, except for such waivers, individually and
collectively, that have not had, and would not reasonably be expected to have, a
Material Adverse Effect;
(iv) any material change or amendment to, or any waiver of
any material right under a material contract or arrangement by which the Company
or any of its assets or properties is bound or subject, except for changes,
amendments or waivers that are expressly provided for or disclosed in this
Agreement;
(v) any change by the Company in its accounting principles,
methods or practices or in the manner it keeps its accounting books and records,
except any such change required by a change in GAAP or by the Securities and
Exchange Commission; or
-6-
(vi) any other event or condition of any character, except
for such events and conditions that have not resulted, and are not expected to
result, either individually or collectively, in a Material Adverse Effect.
(k) Intellectual Property. To the Company's knowledge, the
Company owns or possesses adequate rights to use all material patents, patent
rights, inventions, trade secrets, know-how, trademarks, service marks, trade
names, copyrights or other information (collectively, "Intellectual Property"),
which are necessary to conduct its businesses as currently conducted, except
where the failure to currently own or possess would not result, either
individually or in the aggregate, in a Material Adverse Effect. To the Company's
knowledge, no person is infringing on or violating any of the Company's
Intellectual Property. The Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would reasonably be
expected to have a Material Adverse Effect, and to the Company's knowledge, none
of the patent rights owned or licensed by the Company are unenforceable or
invalid.
(l) Registration Rights. Except as provided in Section 5 herein,
effective upon the Closing, the Company is not currently subject to any
agreement providing any person or entity any rights (including piggyback
registration rights) to have any securities of the Company registered with the
SEC or registered or qualified with any other governmental authority.
(m) Title to Property and Assets. The Company owns or possesses
the necessary rights to all properties, assets, licenses, permits and the like
required to operate its business as currently operated. The properties and
assets of the Company are owned by the Company free and clear of all mortgages,
deeds of trust, liens, charges, encumbrances and security interests except for
statutory liens for the payment of current taxes that are not yet delinquent and
liens, encumbrances and security interests that arise in the ordinary course of
business and do not in any material respect affect the properties and assets of
the Company. With respect to the property and assets it leases, the Company is
in compliance with such leases in all material respects.
(n) Taxes. The Company has filed all necessary federal, state,
and foreign income and franchise tax returns due prior to the date hereof and
has paid or accrued all taxes shown as due thereon, and the Company has no
knowledge of any material tax deficiency which has been or might be asserted or
threatened against it.
(o) Investment Company. The Company is not, and after immediate
application of the proceeds of the sale of the Purchased Shares and Warrants
will not be, an "investment company" or an "affiliated person" of, or "promoter"
or "principal underwriter" for an investment company, or, a company "controlled
by" an "investment company" (other than any Purchaser) within the meaning of the
Investment Company Act of 1940, as amended.
(p) Insurance. The Company maintains and will continue to
maintain insurance of the types and in the amounts that the Company reasonably
believes is prudent and adequate for its
-7-
business (based on the types and amounts maintained by companies of comparable
size and engaged in similar businesses), all of which insurance is in full force
and effect.
(q) Issuance of Press Release and Filing of Form 8-K. The Company
covenants that it shall issue a press release with respect to this Agreement and
the transactions contemplated thereby within one (1) business day following the
Closing. Following the Closing, the Company shall file a Current Report on Form
8-K with the SEC describing the terms of the transactions contemplated by this
Agreement, including as exhibits to such Current Report on Form 8-K this
Agreement, the form of Warrant and such other exhibits as required by the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(r) General Solicitation; No Integration. Neither the Company nor
any other person or entity authorized by the Company to act on its behalf has
engaged in a general solicitation or general advertising (within the meaning of
Regulation D of the Securities Act) of investors with respect to offers or sales
of the Purchased Shares and the Warrants. The Company has not, directly or
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which,
to its knowledge, is or will be integrated with the shares sold pursuant to this
Agreement.
(s) Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF EACH
PURCHASER. Each Purchaser severally hereby represents and warrants to the
Company, and agrees that:
(a) Organization Good Standing and Qualification. The Purchaser
has all corporate power and authority required to enter into this Agreement and
the other agreements, instruments and documents contemplated hereby, and to
consummate the transactions contemplated hereby and thereby.
(b) Authorization. The execution of this Agreement has been duly
authorized by all necessary corporate or partnership action on the part of the
Purchaser. This Agreement constitutes, and the Warrant when executed, will
constitute, the Purchaser's legal, valid and binding obligations, enforceable in
accordance with their terms, except (a) as may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights generally and (ii)
the effect of rules of law governing the availability of equitable remedies and
(b) as rights to indemnity or contribution may be limited under federal or state
securities laws or by principles of public policy thereunder.
-8-
(c) Litigation. There is no Action pending against the Purchaser
that seeks to prevent, enjoin, alter or delay the transactions contemplated by
this Agreement.
(d) Purchase for Own Account. The Purchased Shares and the
Warrants are being acquired for the Purchaser's own account, not as a nominee or
agent, and not with a view to the public resale or distribution thereof within
the meaning of the Securities Act, and the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing the same. The
Purchaser also represents that it has not been formed for the specific purpose
of acquiring the Purchased Shares and the Warrants.
(e) Investment Experience. The Purchaser understands that the
purchase of the Purchased Shares and the Warrant involves substantial risk. The
Purchaser has experience as an investor in securities of companies and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment in the Purchased Shares and the Warrants and has such knowledge
and experience in financial or business matters that it is capable of evaluating
the merits and risks of this investment in the Purchased Shares and the Warrants
and protecting its own interests in connection with this investment.
(f) Accredited Purchaser Status. The Purchaser is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act.
(g) Reliance Upon Purchaser's Representations. The Purchaser
understands that the issuance and sale of the Purchased Shares, the Warrant and
the Warrant Shares to it will not be registered under the Securities Act on the
ground that such issuance and sale will be exempt from registration under the
Securities Act pursuant to Section 4(2) thereof, and that the Company's reliance
on such exemption is based in part on each Purchaser's representations set forth
herein.
(h) Receipt of Information. The Purchaser has had an opportunity
to ask questions and receive answers from the Company regarding the terms and
conditions of the issuance and sale of the Purchased Shares and the Warrants and
the business, properties, prospects and financial condition of the Company and
to obtain any additional information.
(i) Restricted Securities. The Purchaser will not sell, offer to
sell, assign, pledge, hypothecate or otherwise transfer any of the Purchased
Shares, the Warrant or the Warrant Shares unless (i) pursuant to an effective
registration statement under the Securities Act, (ii) such holder provides the
Company with an opinion of counsel, in a generally acceptable form, to the
effect that a sale, assignment or transfer of the Purchased Shares may be made
without registration under the Securities Act, (iii) such Purchased Shares can
be sold pursuant to Rule 144 under the Securities Act with such restrictions as
provided therein, or (iv) such Securities have been publicly sold pursuant to
Rule 144 and such Purchaser has delivered to the Company customary Rule 144
broker's and seller's representation letters. Notwithstanding anything to the
contrary contained in this Agreement or the Warrant, the Purchaser may transfer
(without restriction and without the need for an opinion of counsel) the
Purchased Shares and Warrants Shares to its affiliates provided that such
affiliate is an "accredited investor" under Regulation D and such affiliate
agrees to be bound by the terms and conditions of this Agreement and the
Warrants.
-9-
(j) Legends. The Purchaser agrees that the certificates for the
Purchased Shares, the Warrant and the Warrant Shares shall bear the following
legend:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or with any state
securities commission, and may not be transferred or disposed
of by the holder in the absence of a registration statement
which is effective under the Securities Act of 1933 and
applicable state laws and rules, or, unless, immediately
prior to the time set for transfer, such transfer may be
effected without violation of the Securities Act of 1933 and
other applicable state laws and rules."
In addition, the Purchaser agrees that the Company may place stop
transfer orders with its transfer agents with respect to such certificates.
Notwithstanding the foregoing, it is agreed that, as long as (A) the resale or
transfer (including without limitation a pledge) of Purchased Shares or Warrant
Shares is registered pursuant to an effective registration statement and a
Purchaser represents in writing to the Company that such Purchased Shares or
Warrant Shares have been or are being sold pursuant to such registration
statement, (B) such Purchased Shares or Warrant Shares have been publicly sold
pursuant to Rule 144 ("Rule 144") and such Purchaser has delivered to the
Company customary Rule 144 broker's and seller's representation letters, or (C)
such Purchased Shares or Warrant Shares can be publicly sold pursuant to Rule
144(k) under the Securities Act, such Purchased Shares or Warrant Shares, as the
case may be, shall be issued without any legend or other restrictive language
and, with respect to Purchased Shares or Warrant Shares upon which such legend
is stamped, the Company shall issue new certificates without such legend to the
holder promptly upon request.
5. REGISTRATION; COMPLIANCE WITH THE SECURITIES ACT.
(a) Registration Procedures and Expenses. The Company hereby
agrees that it shall:
(i) subject to receipt of necessary information from the
Purchasers, prepare and file with the SEC as soon as practicable and in no event
later than thirty (30) days following the Closing, a registration statement on
Form S-3 (the "Registration Statement"), to enable the resale of the Purchased
Shares and/or Warrant Shares (collectively, the "Registrable Shares") by the
Purchasers from time to time on Nasdaq and use all reasonable best efforts to
cause such Registration Statement to be declared effective as promptly as
possible after filing and, subject to Section 5(b) below, to remain continuously
effective until the earlier of the second anniversary of the Closing, or (ii)
such time as all Registrable Shares purchased by the Purchasers pursuant to this
Agreement or the Warrants, as the case may be, have been sold thereunder or
pursuant to Rule 144 under the Securities Act (the "Registration Period"). In
the event that Form S-3 is unavailable for such registration, the Company shall
use such other form as is available for such a registration; provided, however,
that the Company will promptly file a new Registration Statement on Form S-3
covering the resale of the Registrable Shares in the event that such Form
becomes available at any time while Registrable Shares are outstanding and have
not yet been sold to the public;
-10-
(ii) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to keep the
Registration Statement effective at all times until the end of the Registration
Period, subject to Section 5(b) below;
(iii) furnish to each Purchaser with respect to the
Registrable Shares registered under the Registration Statement such reasonable
number of copies of the Registration Statement, prospectuses and preliminary
prospectuses in conformity with the requirements of the Securities Act and such
other documents as such Purchaser may reasonably request, in order to facilitate
the public sale or other disposition of all or any of the Registrable Shares by
the Purchasers;
(iv) file documents required of the Company for normal blue
sky clearance in states specified in writing by any Purchaser; provided,
however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented;
(v) use its reasonable best efforts to cause the Registrable
Shares to be listed on Nasdaq in connection with the filing of the Registration
Statement under Section 5(a)(i);
(vi) use its reasonable best efforts to cause the
Registration Statement to be declared effective on or prior to ninety (90) days
following the Closing. If a Registration Statement covering all the Registrable
Shares and required to be filed by the Company pursuant to this Agreement is not
declared effective by the SEC on or before ninety (90) days following the
Closing (the "Effective Deadline") for any reason other than by virtue of a
breach by the Purchaser of any of its obligations or covenants hereunder then
the Company shall pay to each holder of Registrable Shares an amount in cash per
share of Common Stock held equal to the product of (i) the aggregate purchase
price paid by the Purchaser for the Purchased Shares and (ii) the product of (I)
0.0005 and (II) the number of days after the Effective Deadline that the
Registration Statement is not declared effective by the SEC. The payments to
which a Purchaser shall be entitled pursuant to this Section 5(a)(vi) are
referred to herein as "Registration Delay Payments." Registration Delay Payments
shall be paid on the last day of each calendar month during which such
Registration Delay Payments are incurred;
(vii) the Company shall permit a single firm of legal counsel
("Legal Counsel") designated by the holders of at least a majority of the
Registrable Shares to review the Registration Statement and all amendments and
supplements thereto a reasonable period of time prior to their filing with the
SEC;
(viii) within three (3) Business Days after a Registration
Statement covering Registrable Shares is ordered effective by the SEC, the
Company shall deliver, or shall cause its legal counsel to deliver, to the
transfer agent for such Registrable Shares (with copies to the Purchasers)
confirmation that such Registration Statement has been declared effective by the
SEC; and
-11-
(ix) bear all expenses in connection with the procedures in
paragraph (i) through (vii) of this Section 5(a) and the registration of the
Registrable Shares pursuant to the Registration Statement except for the fees
and expenses, if any, of Legal Counsel or other advisers to the Purchasers or
underwriting discounts, brokerage fees and commissions incurred by the
Purchasers, if any.
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 5(a) that the Purchaser shall furnish
to the Company such information regarding itself, the Registrable Shares to be
sold by the Purchaser, and the intended method of disposition of such securities
as shall be required to effect the registration of the Registrable Shares.
(b) Transfer of Registrable Shares After Registration; Suspension.
(i) Each Purchaser agrees that it will not offer to sell or make
any sale, assignment, pledge, hypothecation or other transfer with respect to
the Registrable Shares that would constitute a sale within the meaning of the
Securities Act except pursuant to the Registration Statement referred to in
Section 5(a) or pursuant to an exemption from the registration requirements
under the Securities Act, and that it will promptly notify the Company of any
changes in the information set forth in the Registration Statement after it is
prepared regarding the Purchaser or its plan of distribution to the extent
required by applicable law.
(ii) Subject to paragraph (iv) below, in the event of: (i) any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related prospectus or for additional
information, (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iii) the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (iv) any event or circumstance which in the
reasonable good faith judgment of the Company's board of directors necessitates
the making of any changes in the Registration Statement or prospectus, or any
document incorporated or deemed to be incorporated therein by reference, so
that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and that in the case of the prospectus, it will not contain any untrue statement
of a material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, then the Company shall
deliver a certificate in writing to each Purchaser (the "Suspension Notice") to
the effect of the foregoing (which notice will not disclose the content of any
material non-public information and will indicate the date of the beginning and
end of the intended suspension, if known), and, upon receipt of such Suspension
Notice, each Purchaser will refrain from selling any Registrable Shares pursuant
to the Registration Statement (a "Suspension") until such Purchaser's receipt of
copies of a supplemented or amended prospectus prepared and filed by the
Company, or until it is advised in writing by the Company that the current
prospectus may be
-12-
used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such prospectus. In the
event of any Suspension, the Company will use its reasonable best efforts to
cause the use of the prospectus so suspended to be resumed as soon as possible
after delivery of a Suspension Notice to the Purchasers. Each Purchaser agrees
that the Suspension and Suspension Notice described in this Section 5(b)(ii)
shall be held by them in strictest confidence and not be disclosed by such
Purchaser unless authorized by the Company in writing, except to the extent
publicly known or as required by applicable law.
(iii) In addition to any suspension rights under paragraph
(ii) above, and subject to paragraph (iv) below, the Company may, upon the
happening of any event, that, in the reasonable good faith judgment of Company's
Chief Executive Officer and board of directors, renders it advisable to suspend
use of the prospectus for no more than sixty (60) days in the aggregate in any
twelve (12) month period of time due to pending corporate developments, public
filings with the SEC or similar events, and upon delivery of a Suspension
Notice, effect a Suspension until copies of a supplemented or amended prospectus
are distributed to the Purchasers or until the Purchasers are advised in writing
by the Company that the use of the applicable prospectus may be resumed. Each
Purchaser agrees that the Suspension and Suspension Notice described in this
Section 5(b)(iii) shall be held by them in strictest confidence and not be
disclosed by such Purchaser unless authorized by the Company in writing, except
to the extent publicly known or required by applicable law.
(iv) Provided that a Suspension is not then in effect, the
Purchasers may sell Registrable Shares under the Registration Statement,
provided that the selling Purchaser complies with the prospectus delivery
requirements of the Securities Act.
(v) In the event of a sale of Registrable Shares by a
Purchaser, such Purchaser must also deliver to the Company's transfer agent,
with a copy to the Company, a Certificate of Subsequent Sale in the form of
Exhibit D, so that ownership of the Registrable Shares may be properly
transferred and any restrictive legend properly removed.
(vi) For so long as the Company will have a class of
securities registered under Section 12(b) or Section 12(g) of the Exchange Act,
the Company covenants that it will file, on a timely basis, any reports required
to be filed by it under the Exchange Act and the rules and regulations adopted
by the SEC thereunder and keep all such reports and public information current
to the extent required by Rule 144 under the Securities Act for a period of five
(5) years after the Closing Date. The Company covenants that it will use its
reasonable best efforts to maintain the listing of its Common Stock on the
Nasdaq Stock Market at all times relevant to this agreement.
(c) Indemnification. For the purpose of this Section 5(c), the
term "Registration Statement" shall include any preliminary or final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 5(a) and anything incorporated by reference
therein.
(i) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each of the Purchasers and each person, if any, who
controls any Purchaser within
-13-
the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Purchasers or such
controlling person may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company, which consent shall not be
unreasonably withheld), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, or the Prospectus, financial
statements and schedules, and all other documents filed as a part thereof, as
amended at the time of effectiveness of the Registration Statement, including
any information deemed to be a part thereof as of the time of effectiveness
pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules
and Regulations, or the Prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any of
them, in light of the circumstances under which they were made, not misleading,
or any failure by the Company to fulfill any undertaking included in the
Registration Statement, and will reimburse each Purchaser and each such
controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Purchaser or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon (i) an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, the Prospectus or any amendment or supplement of the
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Purchaser
expressly for use in the Registration Statement or the Prospectus, or (ii) any
untrue statement or omission of a material fact required to make such statement
not misleading in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to the Purchaser before the pertinent sale or sales by the
Purchaser.
(ii) Indemnification by the Purchaser. Each Purchaser will
severally and not jointly indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses to which the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Purchaser, which consent
shall not be unreasonably withheld) insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement to the Registration Statement or Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to
-14-
be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Purchaser expressly for use therein; provided,
however, that the Purchaser shall not be liable for any such untrue or alleged
untrue statement or omission or alleged omission of which the Purchaser has
delivered to the Company in writing a correction before the occurrence of the
transaction from which such loss was incurred, and the Purchaser will reimburse
the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
(iii) Indemnification Procedure.
(1) Promptly after receipt by an indemnified party
under this Section 5(c) of notice of the threat or commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section 5(c), promptly notify the indemnifying
party in writing of the claim; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 5(c) or otherwise, to the extent it is not materially
prejudiced as a result of such failure.
(2) In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it or other indemnified parties that are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 5(c) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless:
a) the indemnified party shall have employed such
counsel in connection with the assumption of legal defenses in accordance with
the proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the
-15-
expenses of more than one separate counsel, approved by such indemnifying party
representing all of the indemnified parties who are parties to such action) or
b) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
action, in each of which cases the reasonable fees and expenses of counsel shall
be at the expense of the indemnifying party. Notwithstanding the provisions of
this Section 5(c), the Purchaser shall not be liable for any indemnification
obligation under this Agreement in excess of the aggregate amount of net
proceeds received by the Purchaser from the sale of the Purchased Shares and
Warrant Shares pursuant to the Registration Statement.
(iv) Contribution. If the indemnification provided for in
this Section 5(c) is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under this Section 5(c) in respect to any losses, claims, damages, liabilities
or expenses referred to in this Agreement, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
in this Agreement.
(1) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Purchaser from the placement
of Common Stock and Warrants or
(2) if the allocation provided by clause (a) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (1) above but the relative
fault of the Company and the Purchaser in connection with the statements or
omissions or inaccuracies in the representations and warranties in this
Agreement that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.
The respective relative benefits received by the Company on the one hand
and each Purchaser on the other shall be deemed to be in the same proportion as
the amount paid by such Purchaser to the Company pursuant to this Agreement for
the Purchased Shares, Warrant and Warrant Shares purchased by such Purchaser
that were sold pursuant to the Registration Statement bears to the difference
(the "Difference") between the net amount such Purchaser paid for the Purchased
Shares, Warrants and Warrant Shares that were sold pursuant to the Registration
Statement and the amount received by such Purchaser from such sale. The relative
fault of the Company and each Purchaser shall be determined by reference to,
among other things, whether the untrue or alleged statement of a material fact
or the omission or alleged omission to state a material fact or the inaccurate
or the alleged inaccurate representation or warranty relates to information
supplied by the Company or by such Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 5(c)(iii),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions
set forth in Section 5(c)(iii) with respect to the notice
-16-
of the threat or commencement of any threat or action shall apply if a claim for
contribution is to be made under this Section 5(c)(iv); provided, however, that
no additional notice shall be required with respect to any threat or action for
which notice has been given under Section 5(c) for purposes of indemnification.
The Company and each Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 5(c) were determined solely by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to in this paragraph. Notwithstanding the
provisions of this Section 5(c), no Purchaser shall be required to contribute
any amount in excess of the amount by which the Difference exceeds the amount of
any damages that such Purchaser 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 Purchasers'
obligations to contribute pursuant to this Section 5(c) are several and not
joint.
(d) Information Available. So long as the Registration Statement
is effective covering the resale of Purchased Shares and Warrant Shares owned by
any Purchaser, the Company will furnish or otherwise make available to each
Purchaser:
(i) as soon as practicable after available (but in the case
of the Company's Annual Report to Stockholders, within 90 days after the end of
each fiscal year of the Company), one copy of
(1) its Annual Report to Stockholders (which Annual
Report shall contain financial statements audited in accordance with generally
accepted accounting principles by a national firm of certified public
accountants);
(2) if not included in substance in the Annual Report to
Stockholders, its Annual Report on Form 10-K;
(3) its quarterly reports on Form 10-Q; and
(4) a full copy of the particular Registration Statement
covering the Purchased Shares and Warrant Shares (the foregoing, in each case,
excluding exhibits);
(ii) upon the request of the Purchaser, a reasonable number
of copies of the Prospectus to supply to any other party requiring the
Prospectus.
(e) Rule 144 Information. For two years after the date of this
Agreement, the Company shall file all reports required to be filed by it under
the Securities Act, the Rules and Regulations and the Exchange Act and shall
take such further action to the extent required to enable the Purchasers to sell
the Purchased Shares and Warrant Shares pursuant to Rule 144 under the
Securities Act (as such rule may be amended from time to time).
-17-
(f) No Additional Registration Statements or Sale of Securities.
Except in connection with any acquisition transaction, existing registration
rights, or as set forth in the Disclosure Letter, the Company covenants that it
will not (i) file, or publicly announce, any other registration statements with
respect to the sale of any securities of the Company or (ii) offer or sell any
other securities of the Company in financing transactions, until such time as
the Registration Statement has become effective with respect to the Registrable
Shares.
6. ADVISORY FEE. The Purchasers acknowledge that the Company intends to
pay to XX Xxxxx Securities Corporation ("XX Xxxxx"), a financial advisor, a fee
in respect of the sale of the Purchased Shares and the Warrants. Each of the
parties to this Agreement hereby represents that, on the basis of any actions
and agreements by it, there are no other brokers or finders entitled to
compensation in connection with the sale of the Purchased Shares and Warrants to
the Purchasers. The Company shall indemnify and hold harmless the Purchasers
from and against all fees, commissions or other payments owing by the Company to
XX Xxxxx or any other person or firm acting on behalf of the Company hereunder.
7. IRREVOCABLE PROXY. In connection with their purchase of Purchased
Shares and Warrants hereunder, each of the UBS Investment Entities shall appoint
the directors on the Board of Directors of the Company, and each of them, as the
sole and exclusive attorneys of each of the UBS Investment Entities, with full
power of substitution and resubstitution, to vote and exercise all voting and
related rights (to the full extent that each of the UBS Investment Entities
would otherwise be entitled to do so) with respect to (i) in the case of UBS
Global Equity Arbitrage Master Ltd., any and all shares of the Company's capital
stock beneficially owned by UBS Global Equity Arbitrage Master Ltd. (within the
meaning of the Exchange Act) constituting, at the record date set for any vote
of stockholders, greater than two percent (2%) of the Company's capital stock
outstanding and entitled to vote as of such record date and (ii) in the case of
PIPES Corporate Strategies Ltd., any and all shares of the Company's capital
stock beneficially owned by PIPES Corporate Strategies Ltd. (within the meaning
of the Exchange Act) constituting, at the record date set for any vote of
stockholders, greater than two percent (2%) of the Company's capital stock
outstanding and entitled to vote as of such record date. Such appointment shall
be made pursuant irrevocable proxies in the form attached hereto as Exhibit E.
8. CONDITIONS TO THE PURCHASER'S OBLIGATIONS AT CLOSING. The
obligations of each Purchaser under Sections l and 2 of this Agreement are
subject to the fulfillment or waiver by such Purchasers, on or before the
Closing, of each of the following conditions:
(a) Representations and Warranties True. Each of the
representations and warranties of the Company contained in Section 3 shall be
true and correct in all material respects on and as of the date of the date
hereof and on and as of the date of the Closing, except as set forth in the
Disclosure Letter or the SEC Documents, with the same effect as though such
representations and warranties had been made as of the Closing.
(b) Performance. The Company shall have performed and complied in
all material respects with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by it on or
before the Closing and shall have obtained
-18-
all approvals, consents and qualifications necessary to complete the purchase
and sale described herein.
(c) Compliance Certificate. The Company will have delivered to
such Purchaser at the Closing a certificate signed on its behalf by its Chief
Executive Officer or Chief Financial Officer certifying that the conditions
specified in Sections 8(a) and 8(b) hereof have been fulfilled and that the
Company has executed Agreements for at least 4,372,107 shares of its Common
Stock pursuant to this offering.
(d) Securities Exemptions. The offer and sale of the Purchased
Shares and the Warrants to the Purchasers pursuant to this Agreement shall be
exempt from the registration requirements of the Securities Act and the
registration and/or qualification requirements of all applicable state
securities laws.
(e) Opinion of Company Counsel. Such Purchaser will have received
an opinion on behalf of the Company, dated as of the date of the Closing, from
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, counsel to the Company, in the form attached
as Exhibit C.
(f) Nasdaq Requirements. The Company shall have applied for the
listing of the Shares and Warrant Shares, in each case, upon Nasdaq Stock
Market.
(g) Warrant. The Company will have issued the Warrants
substantially in the form attached to the Agreement as Exhibit B-1 for all
Purchasers other than the UBS Investment Entities, and with respect to the UBS
Investment Entities only, in the form attached hereto as Exhibit B-2.
(h) Irrevocable Proxy. With respect to the sale of Purchased
Shares and Warrants to the UBS Investment Entities only, each of the UBS
Investment Entities shall have executed an Irrevocable Proxy in the form
attached as Exhibit E.
(i) Other Actions. The Company shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by such Purchaser in
connection with the transactions contemplated hereby.
9. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The
obligations of the Company to each Purchaser under this Agreement are subject to
the fulfillment or waiver, on or before the Closing, of each of the following
conditions:
(a) Representations and Warranties True. The representations and
warranties of such Purchaser contained in Section 4 shall be true and correct in
all material respects on and as of the date hereof and on and as of the date of
the Closing with the same effect as though such representations and warranties
had been made as of the Closing.
(b) Performance. Such Purchaser shall have performed and complied
in all material respects with all agreements, obligations and conditions
contained in this Agreement that
-19-
are required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
(c) Securities Exemptions. The offer and sale of the Purchased
Shares and the Warrant to such Purchaser pursuant to this Agreement shall be
exempt from the registration requirements of the Securities Act and the
registration and/or qualification requirements of all applicable state
securities laws.
(d) Payment of Purchase Price. Such Purchaser shall have
delivered to the Company same day funds in full payment of the purchase price as
specified in Section 1(b).
(e) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto will be reasonably satisfactory in form and
substance to the Company and to the Company's legal counsel, and the Company
will have received all such counterpart originals and certified or other copies
of such documents as it may reasonably request.
(f) Other Actions. The Purchasers shall have executed such
certificates, agreements, instruments and other documents, and taken such other
actions as shall be customary or reasonably requested by the Company in
connection with the transactions contemplated hereby.
10. MISCELLANEOUS.
(a) Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties.
(b) Governing Law. This Agreement will be governed by and
construed under the internal laws of the State of Delaware, without reference to
principles of conflict of laws or choice of laws.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(d) Headings. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules will, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
(e) Notices. Any notice required or permitted under this
Agreement shall be given in writing, shall be effective when received, and shall
in any event be deemed received and effectively given upon personal delivery to
the party to be notified or upon receipt if deposited with
-20-
the United States Post Office, by registered or certified mail, postage prepaid,
or one (1) business day after deposit with a nationally recognized courier
service such as Federal Express for next business day delivery under
circumstances in which such service guarantees next business day delivery, or
one (1) business day after facsimile with copy delivered by registered or
certified mail, in any case, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof or
at such other address as a Purchaser or the Company may designate by giving at
least ten (10) days' advance written notice pursuant to this Section 10(e).
(f) 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), only with the
written consent of the Company and the holders of Purchased Shares and Warrant
Shares (assuming the Warrants are fully exercised) representing at least a
majority of the total aggregate number of Purchased Shares and Warrant Shares
(assuming the Warrants are fully exercised) then outstanding (excluding any of
such shares that have been sold in a transaction in which registration rights
are not assigned in accordance with this Agreement or sold to the public
pursuant to SEC Rule 144 or otherwise). Any amendment or waiver effected in
accordance with this Section 10(f) will be binding upon the Purchasers, the
Company and their respective successors and assigns.
(g) Severability. If any provision of this Agreement is held to
be unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
(h) Entire Agreement. This Agreement, together with all exhibits
and schedules hereto and thereto constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties with respect to the
subject matter hereof.
(i) Further Assurances. From and after the date of this Agreement
upon the request of the Company or the Purchasers, the Company and the
Purchasers will execute and deliver such instruments, documents or other
writings, and take such other actions, as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
(j) Meaning of Include and Including. Whenever in this Agreement
the word "include" or "including" is used, it shall be deemed to mean "include,
without limitation" or "including, without limitation," as the case may be, and
the language following "include" or "including" shall not be deemed to set forth
an exhaustive list.
(k) Fees, Costs and Expenses. All fees, costs and expenses
(including attorneys' fees and expenses) incurred by any party hereto in
connection with the preparation, negotiation and execution of this Agreement and
the exhibits and schedules hereto and the consummation of the transactions
contemplated hereby and thereby (including the costs associated with any filings
with, or compliance with any of the requirements of, any governmental
authorities), shall be the sole
-21-
and exclusive responsibility of such party; provided, however, that the Company
will pay the Purchasers for expenses reasonably incurred in connection with the
transaction contemplated by this Agreement, including the legal fees incurred by
a single counsel for each Purchaser, subject to a cap of $7,500 for each
Purchaser.
(l) Rights Plan. Without limiting the generality of Section
10(i), in the event that the acquisition of the Purchased Shares or the Warrant,
the acquisition of the Warrant Shares on exercise of the Warrant or the
registration of any such shares for resale would cause a "Triggering Event"
under the Preferred Shares Rights Agreement dated as of March 31, 1997, between
the Company and The First National Bank of Boston (including any successor plan
or other plan or mechanism adopted by the Company that has the effect or purpose
of discouraging an acquisition of all or any portion of the Company, whether by
means of a merger, tender offer, acquisition of assets or stock, or otherwise,
the "Rights Plan"), or would trigger or activate any provision of any state or
other antitakeover statute, the Company shall take all actions necessary
(including action by its Board of Directors) to permit the Purchasers to take
such action without causing any such "Triggering Event" or trigger or
activation.
(m) Stock Splits, Dividends and other Similar Events. The
provisions of this Agreement (including the number of shares of Common Stock and
other securities described herein) shall be appropriately adjusted to reflect
any stock split, stock dividend, reorganization or other similar event that may
occur with respect to the Company after the date hereof.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
-22-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
PROXIM, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-------------------------------
[PURCHASER SIGNATURE PAGES TO FOLLOW]
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 1,093,028
UBS GLOBAL EQUITY ARBITRAGE MASTER LTD.
By: UBS X'Xxxxxx L.L.C.
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 1,093,028
PIPES CORPORATE STRATEGIES LTD.
By: UBS X'Xxxxxx L.L.C.
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 466,358
PEQUOT SCOUT FUND, L.P.
By: Pequot Capital Management, Inc.
Its Investment Manager
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 262,326
PEQUOT NAVIGATOR OFFSHORE FUND, INC.
By: Pequot Capital Management, Inc.
Its Investment Advisor
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 510,079
RIVERVIEW GROUP L.L.C.
By:
-----------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 409,360
CROSSLINK CROSSOVER FUND III, L.P.
By: Crossover Fund III Management, L.L.C.
Its General Partner
By:
----------------------------------------
Xxxxxxx X. Xxxxx, Managing Member
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 27,849
OFFSHORE CROSSLINK CROSSOVER
FUND III, Unit Trust
By: Crossover Fund III Management, L.L.C.
Its Managing Member
By:
----------------------------------------
Xxxxxxx X. Xxxxx, Managing Member
SIGNATURE PAGE TO
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
DATED AS OF NOVEMBER 27, 2001
BY AND BETWEEN
PROXIM, INC.
AND EACH PURCHASER NAMED THEREIN
The undersigned hereby executes and delivers to Proxim, Inc. the Common
Stock and Warrant Purchase Agreement (the "Agreement") to which this Signature
Page is attached effective as of the date of the Agreement, which Agreement and
Signature Page, together with all counterparts of such Agreement and signature
pages of the other Purchasers named in such Agreement, shall constitute one and
the same document in accordance with the terms of such Agreement.
Number of Shares: 510,079
SF CAPITAL PARTNERS LTD.
By:
-------------------------------------
Xxxxxxx X. Xxxx, Managing Director
Exhibit A
Schedule of Purchasers
--------------------------------------------------------------------------------------------------------------------------------
PURCHASED WARRANT TOTAL TOTAL
PURCHASER SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------------------------------------------------------------------
UBS GLOBAL EQUITY ARBITRAGE 910,857 $7,499,996.54 182,171 $182.18 1,093,028 $7,500,178.72
MASTER LTD.
UBS X'Xxxxxx L.L.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
PIPES CORPORATE STRATEGIES LTD. 910,857 $7,499,996.54 182,171 $182.18 1,093,028 $7,500,178.72
UBS X'Xxxxxx L.L.C.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
PEQUOT SCOUT FUND, L.P. 388,632 $3,199,995.89 77,726 $ 77.73 466,358 $3,200,073.62
Pequot Capital Management, Inc.
Its Investment Manager
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
PEQUOT NAVIGATOR OFFSHORE FUND, INC. 218,605 $1,799,993.57 43,721 $ 43.73 262,326 $1,800,037.30
Pequot Capital Management, Inc.
Its Investment Advisor
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
RIVERVIEW GROUP L.L.C. 425,066 $3,499,993.45 85,013 $ 85.02 510,079 $3,500,078.47
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
CROSSLINK CROSSOVER FUND III, L.P. 341,134 $2,808,897.36 68,226 $ 68.23 409,360 $2,808,965.59
Crosslink Capital
Xxx Xxxxxxxxxxx Xxxxxx, Xxx. 0000
Xxx Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
OFFSHORE CROSSLINK CROSSOVER 23,208 $ 191,094.68 4,641 $ 4.65 27,849 $ 191,099.33
FUND III, UNIT TRUST
Crosslink Capital
Two Embarcadero Center, Ste. 2200
Xxx Xxxxxxxxx, XX 00000
-------------------------------------------------------------------------------------------------------------------------------
SF CAPITAL PARTNERS LTD. 425,066 $3,499,993.45 85,013 $ 85.02 510,079 $3,500,078.47
SF Capital Partners Ltd.
0000 Xxxx Xxxxxx Xxxxxx, Xxx. 000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------------------------------------------------------
TOTAL 3,643,425 $29,999,961.48 728,682 $ 728.74 4,372,107 $30,000,690.22
================================================================================================================================
Exhibit B-1
Form of Warrant
Exhibit B-2
Form of UBS Investment Entities Warrant
Exhibit C
Form of Legal Opinion
Exhibit D
Form of Certificate of Subsequent Sale
Exhibit E
Form of Irrevocable Proxy
