EXHIBIT 10.5
VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON MARCH __, 2006
(UNLESS EXTENDED PURSUANT TO SECTION 2 HEREOF)
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR 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.
Right to Purchase ___________ Shares of
Common Stock, par value $0.0001 per share
Date: March __, 2003
P-COM, INC.
SERIES A STOCK PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, _______________________, or
its registered assigns, is entitled to purchase from P-Com, Inc., a corporation
organized under the laws of the State of Delaware (the "Company"), at any time
or from time to time during the period specified in Section 2 hereof,
__________________ fully paid and nonassessable shares of the Company's common
stock, par value $0.0001 per share (the "Common Stock"), at an exercise price
per share (the "Exercise Price") equal to $0.12. The number of shares of Common
Stock purchasable hereunder (the "Warrant Shares") and the Exercise Price are
subject to adjustment as provided in Section 4 hereof. The term "Warrants" shall
mean this Warrant and the other warrants of the Company issued pursuant to that
certain Securities Purchase Agreement, dated as of March __, 2003, by and among
the Company and the other signatories thereto (the "Securities Purchase
Agreement").
This Warrant is subject to the following terms, provisions and
conditions:
1. Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, including, without limitation, the limitations
contained in Section 7 hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and (a) payment to
the Company in cash, by certified or official bank check or by wire transfer for
the account of the Company, of the Exercise Price for the Warrant Shares
specified in the Exercise Agreement or (b) if the holder is effectuating a
Cashless Exercise (as defined in Section 10 hereof) pursuant to Section 10
hereof, delivery to the Company of a written notice of an election to effect a
Cashless Exercise for the Warrant Shares specified in the Exercise Agreement.
The Warrant Shares so purchased shall be deemed to be issued to the holder
hereof or such holder's designee, as the record owner of such shares, as of the
close of business on the date on which this Warrant shall have been surrendered,
the completed Exercise Agreement shall have been delivered, and payment shall
have been made for such shares as set forth above or, if such date is not a
business day, on the next succeeding business day. The Warrant Shares so
purchased, representing the aggregate number of shares specified in the Exercise
Agreement, shall (by the Company or through its transfer agent) be delivered
(i.e., deposited with a nationally-recognized overnight courier service postage
prepaid) to the holder hereof within a reasonable time, not exceeding two
business days, after this Warrant shall have been so exercised (the "Delivery
Period"). If the Company's transfer agent is participating in the Depository
Trust Company ("DTC") Fast Automated Securities Transfer program, and so long as
the certificates therefor do not bear a legend and the holder is not obligated
to return such certificate for the placement of a legend thereon, the Company
shall cause its transfer agent to electronically transmit the Warrant Shares so
purchased to the holder by crediting the account of the holder or its nominee
with DTC through its Deposit Withdrawal Agent Commission system ("DTC
Transfer"). If the aforementioned conditions to a DTC Transfer are not
satisfied, the Company shall deliver as provided herein to the holder physical
certificates representing the Warrant Shares so purchased. Further, the holder
may instruct the Company to deliver to the holder physical certificates
representing the Warrant Shares so purchased in lieu of delivering such shares
by way of DTC Transfer. Any certificates so delivered shall be in such
denominations as may be reasonably requested by the holder hereof, shall be
registered in the name of such holder or such other name as shall be designated
by such holder and, following the date on which the resale of the Warrant Shares
has been registered under the Securities Act or the Warrant Shares otherwise may
be sold by the holder pursuant to Rule 144 promulgated under the Securities Act
(or a successor rule), shall not bear any restrictive legend. If this Warrant
shall have been exercised only in part, then the Company shall, at its expense,
at the time of delivery of such certificates, deliver to the holder a new
Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
If, at any time, a holder of this Warrant submits this Warrant, an
Exercise Agreement and payment to the Company of the Exercise Price for each of
the Warrant Shares specified in the Exercise Agreement (including pursuant to a
Cashless Exercise), and the Company fails for any reason to deliver, on or prior
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to the fourth business day following the expiration of the Delivery Period for
such exercise, the number of shares of Common Stock to which the holder is
entitled upon such exercise (an "Exercise Default"), then the Company shall pay
to the holder payments ("Exercise Default Payments") for an Exercise Default in
the amount of (a) (N/365), multiplied by (b) the amount by which the Market
Price (as defined in Section 4(j)(iii) hereof) on the date the Exercise
Agreement giving rise to the Exercise Default is transmitted in accordance with
this Section 1 (the "Exercise Default Date") exceeds the Exercise Price in
respect of such Warrant Shares, multiplied by (c) the number of shares of Common
Stock the Company failed to so deliver in such Exercise Default, multiplied by
(d) .24, where N = the number of days from the Exercise Default Date to the date
that the Company effects the full exercise of this Warrant which gave rise to
the Exercise Default. The accrued Exercise Default Payment for each calendar
month shall be paid in cash and shall be made to the holder by the fifth day of
the month following the month in which it has accrued. Nothing herein shall
limit the holder's right to pursue actual damages for the Company's failure to
maintain a sufficient number of authorized shares of Common Stock as required
pursuant to the terms of Section 3(b) hereof or to otherwise issue shares of
Common Stock upon exercise of this Warrant in accordance with the terms hereof,
and the holder shall have the right to pursue all remedies available at law or
in equity (including a decree of specific performance and/or injunctive relief).
2. Period of Exercise. This Warrant shall be exercisable at any time
and from time to time during the period beginning on the date of initial
issuance of this Warrant (the "Issue Date") and ending at 5:00 p.m., New York
City time, on the third anniversary of the Issue Date (the "Exercise Period").
The Exercise Period shall automatically be extended by one (1) day for each day
on which the Company does not have a number of shares of Common Stock reserved
for issuance upon exercise hereof at least equal to the number of shares of
Common Stock issuable upon exercise hereof. Notwithstanding the foregoing, in
the event that the Company does not obtain the Price Adjustment Approval (as
such term is defined in the Securities Purchase Agreement) within 120 days
following the Issue Date, this Warrant shall terminate and be of no further
force or effect.
3. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:
(a) Shares to be Fully Paid. All Warrant Shares shall, upon
issuance in accordance with the terms of this Warrant, be validly
issued, fully paid, and nonassessable and free from all taxes, liens,
claims and encumbrances.
(b) Reservation of Shares. During the Exercise Period, the
Company shall at all times have authorized, and reserved for the
purpose of issuance upon exercise of this Warrant, a sufficient number
of shares of Common Stock to provide for the exercise in full of this
Warrant (without giving effect to the limitations on exercise set forth
in Section 7(g) hereof).
(c) Listing. The Company 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 become listed or quoted (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 or quoted, such listing of all shares of Common Stock from time
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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 or quoted on such national securities exchange or
automated quotation system.
(d) Certain Actions Prohibited. The Company shall not, by
amendment of its charter 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 to be observed or
performed by it hereunder, but shall at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder
of this Warrant in order to protect the economic benefit inuring to the
holder hereof and the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and
purpose of this Warrant. Without limiting the generality of the
foregoing, the Company (i) shall not increase the par value of any
shares of Common Stock receivable upon the exercise of this Warrant
above the Exercise Price then in effect, and (ii) shall take all such
actions as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.
(e) Successors and Assigns. This Warrant shall be binding upon
any entity succeeding to the Company by merger, consolidation, or
acquisition of all or substantially all of the Company's assets.
(f) Blue Sky Laws. The Company shall, on or before the date of
issuance of any Warrant Shares, take such actions as the Company shall
reasonably determine are necessary to qualify the Warrant Shares for,
or obtain exemption for the Warrant Shares for, sale to the holder 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 Section 3(f), (ii) subject itself
to general taxation in any such jurisdiction or (iii) file a general
consent to service of process in any such jurisdiction.
4. Antidilution Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares issuable hereunder shall be subject to
adjustment from time to time as provided in this Section 4.
(a) Issuance of Common Stock or Common Stock Equivalents. In
the event that, at any time or from time to time from and after the
later of (i) the 180th day following the Issue Date or (ii) the date on
which the Company obtains the Price Adjustment Approval, the Company
shall issue or sell shares of Common Stock or Common Stock Equivalents
(as defined herein) without consideration or at a price per share or
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Net Consideration Per Share (as defined herein) less than the Exercise
Price in effect immediately prior to such issuance or sale, then in
each such case the Exercise Price shall, simultaneously with such
issuance or sale, be lowered to equal the price per share or Net
Consideration Per Share received or receivable by the Company in
connection with such issuance or sale.
(b) 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 Exercise Price in effect immediately prior to
such subdivision shall 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 Exercise Price in
effect immediately prior to such combination shall be proportionately
increased.
(c) Consolidation, Merger or Sale. In case of any
consolidation of the Company with, or merger of the Company into, any
other corporation or other entity, or in case of any sale or conveyance
of all or substantially all of the assets of the Company other than in
connection with a plan of complete liquidation of the Company at any
time during the Exercise Period, then as a condition of such
consolidation, merger or sale or conveyance, adequate provision shall
be made whereby the holder hereof shall 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 this Warrant been
exercised immediately prior to such consolidation, merger or sale or
conveyance. In any such case, the Company shall make appropriate
provision to insure that the provisions of this Section 4 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 shall not effect any consolidation, merger or sale
or conveyance unless prior to the consummation thereof, the successor
corporation or other entity (if other than the Company) assumes by
written instrument the obligations under this Warrant and the
obligations to deliver to the holder hereof such shares of stock,
securities, cash 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 other entity, 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 hereof
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.
(d) 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 partial liquidating dividend,
stock repurchase 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 hereof 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
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payable to the holder had such holder been the holder of such shares of
Common Stock on the record date for the determination of stockholders
entitled to such Distribution. If the Company distributes rights,
warrants, options or any other form of convertible securities and the
right to exercise or convert such securities would expire in accordance
with their terms prior to the expiration of the Exercise Period, then
the terms of such securities shall provide that such exercise or
convertibility right shall remain in effect until 30 days after the
date the holder hereof receives such securities pursuant to the
exercise hereof.
(e) Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 4, the
number of shares of Common Stock issuable upon exercise of this Warrant
at each such Exercise Price shall be adjusted by multiplying a number
equal to the Exercise Price in effect immediately prior to such
adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant at such Exercise Price immediately prior to
such adjustment and dividing the product so obtained by the adjusted
Exercise Price.
(f) Additional Adjustment Provisions. The following provisions
shall be applicable to the making of adjustments in the Exercise Price
and the number of Warrant Shares pursuant to this Section 4:
(i) Any obligation, agreement or undertaking to issue
shares of Common Stock or Common Stock Equivalents at any time
in the future shall be deemed to be an issuance at the time
such obligation, agreement or undertaking is made or arises.
(ii) No adjustment of the Exercise Price or the
number of Warrant Shares shall be made pursuant to this
Section 4 upon the issuance of any shares of Common Stock that
are issued upon the exercise, conversion or exchange of any
Common Stock Equivalents for which an adjustment has already
been made pursuant to this Section 4. Should the Net
Consideration Per Share of any Common Stock Equivalents for
which an adjustment has been made pursuant to this Section 4
(or would have been made pursuant to this Section 4 had the
Net Consideration Per Share of such Common Stock Equivalents
been less than the Exercise Price in effect immediately prior
to the issuance or sale thereof) be decreased from time to
time other than as a result of the application of
anti-dilution provisions substantially similar to the
provisions of this Section 4, then, upon the effectiveness of
each such change, the Exercise Price and the number of Warrant
Shares shall be readjusted to that which would have been
obtained (A) had the adjustments made pursuant to this Section
4 upon the issuance of such Common Stock Equivalents been made
upon the basis of the new Net Consideration Per Share of such
Common Stock Equivalents, and (B) had the adjustments made to
the Exercise Price and the number of Warrant Shares since the
date of issuance of such Common Stock Equivalents been made to
such Exercise Price and the number of Warrant Shares as
adjusted pursuant to clause (A) above.
(iii) In the event any shares of Common Stock or
Common Stock Equivalents are issued or sold without
consideration, such shares of Common Stock or Common Stock
Equivalents shall be deemed to have been issued or sold for a
consideration of $0.0001 per share.
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(iv) In the event that all or any part of the
consideration received or paid by the Company in connection
with any of the transactions described in this Section 4
consists of property other than cash, such consideration shall
be deemed to have a fair market value as is reasonably
determined in good faith by the Board of Directors of the
Company in a manner reasonably acceptable to the holder of
this Warrant.
(v) All calculations under this Section 4 shall be
made to the nearest 1/100th of a cent or 1/10,000th of a share
of Common Stock, as the case may be. No adjustment to the
Exercise Price (and, correspondingly, to the number of Warrant
Shares) shall be required unless such adjustment (plus any
adjustments not previously made by reason of this Section
4(f)(v)) would require an increase or decrease of at least 1%
in such Exercise Price; provided, however, that any
adjustment(s) that by reason of this Section 4(f)(v) are not
required to be made shall be carried forward and taken into
account upon the earlier of (A) any subsequent adjustment or
(B) any exercise of this Warrant.
(vi) Notwithstanding any other provision of this
Warrant, no adjustment to the Exercise Price shall be made to
the extent such adjustment would reduce the Exercise Price
below the par value of the Common Stock.
(vii) No adjustment to the Exercise Price shall be
made (A) upon the exercise of any warrants, options or
convertible securities issued and outstanding on the Issue
Date that are set forth in Section 3(c) of the Disclosure
Schedule to the Securities Purchase Agreement in accordance
with the terms of such securities as of the Issue Date; (B)
upon the grant or exercise of any stock or options which may
hereafter be granted to or exercised by any employee, director
or consultant under any employee benefit plan of the Company
now existing or to be implemented in the future, so long as
the issuance of such stock or options is approved by a
majority 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; (C) upon conversion of
the Notes (as defined herein) or exercise of the Warrants; (D)
the issuance of securities in connection with strategic
business partnerships or joint ventures, the primary purpose
of which, in the reasonable judgment of the Board of
Directors, is not to raise additional capital; or (E) the
issuance of securities pursuant to any equipment financing
from a bank or similar financial or lending institution
approved by the Board of Directors.
(g) Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder hereof, which notice shall state
the Exercise 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) 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
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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
(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 or estimated 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 fifteen (15) 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 hereof.
(i) Certain Events. If, at any time during the Exercise Period, any
event occurs of the type contemplated by the adjustment provisions of this
Section 4 but not expressly provided for by such provisions, the Company shall
give notice of such event as provided in Section 4(g) hereof, and an appropriate
adjustment in the Exercise Price and the number of Warrant Shares shall be made
so that the rights of the holder shall be neither enhanced nor diminished by
such event.
(j) Certain Definitions.
(i) "Common Stock" shall include, for purposes of this Section
4, 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 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 4(c) hereof, the stock or other securities or
property provided for in such Section.
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(ii) "Common Stock Equivalent" shall mean (A) any security
convertible, with or without consideration, into any Common Stock
(including any option, warrant or other right to subscribe for or
purchase such a security), (B) any security carrying any option,
warrant or other right to subscribe for or purchase any Common Stock,
or (C) any such option, warrant or other right.
(iii) "Market Price" shall mean, as of any date, (A) the
average of the closing sales prices for the shares of Common Stock on
the Nasdaq National Market or other trading market where such security
is listed or traded as reported by Bloomberg Financial Markets (or a
comparable reporting service of national reputation selected by the
Company and reasonably acceptable to the holders if Bloomberg Financial
Markets is not then reporting sales prices of such security)
(collectively, "Bloomberg") for the ten (10) consecutive trading days
immediately preceding such date, or (B) if the Nasdaq National Market
is not the principal trading market for the shares of Common Stock, the
average of the reported sales prices reported by Bloomberg on the
principal trading market for the Common Stock during the same period,
or, if there is no sales price for such period, the last sales price
reported by Bloomberg for such period, or (C) if the foregoing do not
apply, the last sales 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 sales price is so reported for such
security, the last bid price of such security as reported by Bloomberg,
or (D) 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 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.
(iv) "Net Consideration Per Share" shall mean, in determining
the amount of consideration received and/or receivable by the Company
for any Common Stock issued upon the conversion, exercise or exchange
of any Common Stock Equivalents, the amount equal to (A) the total
amount of consideration, if any, received by the Company for the
issuance of such Common Stock Equivalents plus (B) the minimum amount
of consideration, if any, payable to the Company upon conversion,
exercise or exchange thereof, divided by the aggregate number of shares
of Common Stock that would be issued if all such Common Stock
Equivalents were converted, exercised or exchanged. The Net
Consideration Per Share receivable by the Company shall be determined
in each instance as of the date of issuance of Common Stock Equivalents
without giving effect to any possible future upward price adjustments
or rate adjustments that may be applicable with respect to such Common
Stock Equivalents.
(v) "Notes" shall mean the convertible promissory notes issued
and sold by the Company pursuant to the Securities Purchase Agreement.
(vi) The term "trading day" shall mean any day on which the
principal United States securities exchange or trading market where the
Common Stock is then listed is open for trading.
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5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.
6. No Rights or Liabilities as a Stockholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a stockholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
7. Transfer, Exchange and Replacement of Warrant.
(a) Restriction on Transfer. This Warrant and the rights
granted to the holder hereof are transferable, in whole or in part,
upon surrender of this Warrant, together with a properly executed
assignment in the form attached hereto, at the office or agency of the
Company referred to in Section 7(e) below, provided, however, that any
transfer or assignment shall be subject to the conditions set forth in
Sections 7(f) and (g) hereof. Until due presentment for registration of
transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all
purposes, and the Company shall not be affected by any notice to the
contrary.
(b) Warrant Exchangeable for Different Denominations. This
Warrant is exchangeable, upon the surrender hereof by the holder at the
office or agency of the Company referred to in Section 7(e) below, for
new warrants of like tenor of different denominations representing in
the aggregate the right to purchase the number of shares of Common
Stock which may be purchased hereunder, each of such new warrants to
represent the right to purchase such number of shares (at the Exercise
Price therefor) as shall be designated by the holder hereof at the time
of such surrender, and all such warrants thereafter constituting the
Warrant referenced herein.
(c) 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 this Warrant, the
Company, at its expense, shall execute and deliver, in lieu thereof, a
new Warrant of like tenor.
(d) Cancellation; Payment of Expenses. Upon the surrender of
this Warrant in connection with any transfer, exchange, or replacement
as provided in this Section 7, this Warrant shall be promptly canceled
by the Company. The Company shall pay all taxes (other than securities
transfer taxes) and all other expenses (other than legal expenses, if
any, incurred by the Holder or transferees) and charges payable in
connection with the preparation, execution, and delivery of any Warrant
pursuant to this Section 7.
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(e) Warrant Register. The Company shall maintain, at its
principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), a register
for this Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as
well as the name and address of each transferee and each prior owner of
this Warrant.
(f) Exercise or Transfer Without Registration. If, at the time
of the surrender of this Warrant in connection with any exercise,
transfer, or exchange of this Warrant, this Warrant (or, in the case of
any exercise, the Warrant Shares issuable hereunder), shall not be
registered under the Securities Act and under applicable state
securities or blue sky laws, the Company may require, as a condition of
allowing such exercise, transfer, or exchange, (i) that the holder or
transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions)
to the effect that such exercise, transfer, or exchange may be made
without registration under the Securities Act and under applicable
state securities or blue sky laws (the cost of which shall be borne by
the Company if the Company's counsel renders such an opinion and up to
$500 of such cost shall be borne by the Company if the holder's counsel
is requested to render such opinion), (ii) that the holder or
transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the
transferee be an "accredited investor" as defined in Rule 501(a)
promulgated under the Securities Act; provided, however, that no such
opinion, letter, or status as an "accredited investor" shall be
required in connection with a transfer pursuant to Rule 144 under the
Securities Act.
(g) Additional Restrictions on Exercise or Transfer. In no
event shall the holder hereof have the right to exercise any portion of
this Warrant for shares of Common Stock or to dispose of any portion of
this Warrant to the extent that such right to effect such exercise or
disposition would result in the holder or any of its affiliates
together beneficially owning more than 4.99% of the outstanding shares
of Common Stock. For purposes of this Section 7(g), beneficial
ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13D-G
thereunder. The restriction contained in this Section 7(g) may not be
altered, amended, deleted or changed in any manner whatsoever unless
the holders of a majority of the outstanding shares of Common Stock and
the holder hereof shall approve, in writing, such alteration,
amendment, deletion or change.
8. 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.
9. Notices. Any notices required or permitted to be given under the
terms of this Warrant shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier or by confirmed
telecopy, and shall be effective five days after being placed in the mail, if
mailed, or upon receipt or refusal of receipt, if delivered personally or by
courier, or by confirmed telecopy, in each case addressed to a party. The
addresses for such communications shall be:
-11-
(a) If to the Company:
P-Com, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
(b) If to the holder, at such address as such holder shall
have provided in writing to the Company, or at such other address as
such holder furnishes by notice given in accordance with this Section
9.
10. Cashless Exercise. This Warrant may be exercised at any time during
the Exercise Period by presentation and surrender of this Warrant to the Company
at its principal executive offices with a written notice of the 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 Exercise Price in cash, the holder shall surrender this
Warrant for that number of shares of Common Stock determined by multiplying the
number of Warrant Shares 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 Exercise
Price, and the denominator of which shall be the then current Market Price per
share of Common Stock.
11. Indemnification by Company. The Company shall hold harmless and
indemnify the holder of this Warrant from and against, and shall compensate and
reimburse such holder for, any damages which are directly or indirectly suffered
or incurred by such holder or to which such holder may otherwise become subject
(regardless of whether or not such damages relate to any third-party claim) and
which arise from or as a result of, or are directly or indirectly connected with
any breach of any of the Company's covenants set forth herein. In the event of
the assertion or commencement by any person of any claim or legal proceeding
with respect to which the holder may have indemnification rights pursuant to
this Section 11, the holder shall promptly notify the Company thereof in
writing, but the failure to so notify the Company shall not limit the holder's
rights to indemnification hereunder, except to the extent the Company
demonstrates that the defense of such action is prejudiced by the failure to so
give such notice.
12. Miscellaneous.
(a) Governing Law; Jurisdiction. This Warrant shall be
governed by and construed in accordance with the laws of the State of
Delaware. The Company irrevocably consents to the jurisdiction of the
United States federal courts and state courts located in the State of
Delaware in any suit or proceeding based on or arising under this
Warrant and irrevocably agrees that all claims in respect of such suit
or proceeding may be determined in such courts. The Company irrevocably
waives any objection to the laying of venue and the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The
Company further agrees that service of process upon the Company mailed
-12-
by certified or registered mail shall be deemed in every respect
effective service of process upon the Company in any such suit or
proceeding. Nothing herein shall affect the holder's right to serve
process in any other manner permitted by law. The Company agrees that a
final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such
judgment or in any other lawful manner.
(b) Amendment and Waiver. Except as provided in Section 7(g)
hereof, this Warrant and any provision hereof may only be amended by an
instrument in writing signed by the Company and the holder hereof. The
failure of any party to enforce any of the provisions of this Warrant
shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every
provision of this Warrant in accordance with its terms.
(c) Prevailing Party's Costs and Expenses. The prevailing
party in any mediation, arbitration or legal action to enforce or
interpret this Warrant shall be entitled to recover from the
non-prevailing party all costs and expenses, including reasonable
attorneys' fees, incurred in such action or proceeding.
(d) Construction. Whenever the context requires, the gender of
any word used in this Warrant includes the masculine, feminine or
neuter, and the number of any word includes the singular or plural.
Unless the context otherwise requires, all references to articles and
sections refer to articles and sections of this Warrant, and all
references to schedules are to schedules attached hereto, each of which
is made a part hereof for all purposes. The descriptive headings of the
several Sections of this Warrant are inserted for purposes of reference
only, and shall not affect the meaning or construction of any of the
provisions hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-13-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
P-COM, INC.
By: ______________________-
Name:
Title:
FORM OF EXERCISE AGREEMENT
(To be Executed by the Holder in order to Exercise the Warrant)
To: P-Com, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
The undersigned hereby irrevocably exercises the right to purchase
_____________ shares of the Common Stock of P-Com, Inc., a corporation organized
under the laws of the State of Delaware (the "Company"), evidenced by the
attached Warrant, and herewith [makes payment of the Exercise Price with respect
to such shares in full][elects to effect a Cashless Exercise (as defined in
Section 10 of such Warrant)], all in accordance with the conditions and
provisions of said Warrant.
The undersigned agrees not to offer, sell, transfer or otherwise
dispose of any Common Stock obtained on exercise of the Warrant, except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws. The undersigned represents that it is
an "accredited investor" as that term is defined in Rule 501(a) of Regulation D
under the Securities Act of 1933, as amended.
|_| The undersigned requests that the Company cause its transfer agent to
electronically transmit the Common Stock issuable pursuant to this
Exercise Agreement to the account of the undersigned or its nominee
(which is _________________) with DTC through its Deposit Withdrawal
Agent Commission System ("DTC Transfer"), provided that such transfer
agent participates in the DTC Fast Automated Securities Transfer
program.
|_| In lieu of receiving the shares of Common Stock issuable pursuant to
this Exercise Agreement by way of DTC Transfer, the undersigned hereby
requests that the Company cause its transfer agent to issue and deliver
to the undersigned physical certificates representing such shares of
Common Stock.
The undersigned requests that a Warrant representing any unexercised
portion hereof be issued, pursuant to the Warrant, in the name of the Holder and
delivered to the undersigned at the address set forth below:
Dated: _______________ _____________________________
Signature of Holder
_____________________________
Name of Holder (Print)
Address: _________________________
_________________________
_________________________
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers all the rights of the undersigned under the within Warrant, with
respect to the number of shares of Common Stock covered thereby set forth
hereinbelow, to:
Name of Assignee Address No. of Shares
---------------- -------- -------------
and hereby irrevocably constitutes and appoints
_____________________________________ as agent and attorney-in-fact to transfer
said Warrant on the books of the within-named corporation, with full power of
substitution in the premises.
Dated: _____________________, ____
In the presence of
__________________
Name: ___________________________________
Signature: ____________________________
Title of Signing Officer or Agent (if any):
Address: ________________________________
________________________________
________________________________
Note: The above signature should correspond
exactly with the name on the face of the
within Warrant.
