EXHIBIT 10.116
HPC CAPITAL MANAGEMENT
Investment Banking/ Financial Consultants
February 6, 2003
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
P-COM, Inc.
▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Engagement Letter
-----------------
Dear ▇▇. ▇▇▇▇▇▇▇▇▇▇:
This letter agreement (this" Agreement") confirms P-COM, Inc.'s (the "Company")
-------
engagement of HPC Capital Management. ("HPC") as investment banker, financial
---
advisor and consultant of the Company and sets forth the terms and conditions
pursuant to which HPC shall perform in said capacity.
1. Retention Subject to the terms and conditions of this Agreement, the
---------
Company hereby engages HPC to act on behalf of the Company as a non-exclusive
investment banker, financial advisor and consultant commencing on the date
hereof and continuing until completion of the financing outlined in the Proposed
Private Placement Term Sheet of $ 1,000,000 Regulation D offering of Common
Shares & Warrants (the "Engagement"). Either party may cancel this Agreement
----------
upon 30-calendar days written notice.
2. Services. During the Engagement and subject to the terms
--------
and conditions herein, HPC agrees to provide financial services to the Company
consisting of: (i) evaluating the Company's requirements for funding growth and
expansion of the Company's operations; (ii) analyzing the impact of business
decisions, policies, and practices on the value of the Company's business and
securities; and (iv) increasing the public exposure of the Company through
introductions to institutions, brokers and the investment community. HPC agrees
to devote such time, attention, and energy as may be necessary to perform the
services hereunder. The Company expressly acknowledges and agrees that nothing
herein shall be construed, however, to require HPC to (i) provide a minimum
number of hours of service to the Company or to limit the right of HPC to
perform similar services for the benefit of persons or entities other than the
Company, (ii) commit to purchase securities of the Company or secure financing
on behalf of the Company by third parties, (iii) ensure that any potential
investor(s) introduced to the Company by HPC will execute final agreements with
the Company, or (iv) guaranty the obligations of any investor(s) introduced to
the Company by HPC under any final agreements with such investor(s).
3. Remuneration. For undertaking the Engagement and for other good and
------------
valuable consideration, including but not limited to, the substantial benefit
the Company will derive from the ability to announce its relationship with HPC,
the Company agrees as follows:
1
HPC CAPITAL MANAGEMENT
Investment Banking/ Financial Consultants
(a) Placement Fees. The Company shall pay to HPC a cash placement fee
--------------
equal to 5% of the total purchase price of the Company's securities sold,
including all amounts placed in an escrow account or payable in the future
(including future issuances resulting from anti dilution provisions) and all
amounts paid or payable upon exercise, conversion or exchange of such securities
received or receivable directly by the Company ("Aggregate Consideration") in
-----------------------
any placement of the Company's securities in connection with HPC 's efforts
hereunder. Such Fees to be paid commensurate with funding of such purchase
transaction(s).
(b) Warrants. On each closing date on which Aggregate Consideration is paid
--------
or becomes payable, the Company shall issue to HPC Capital Management 50,000
warrants (the "Warrants") per $ 1 million raised by HPC. The Warrants shall be
--------
exercisable immediately after the date of issuance, and shall expire 5 years
after the date of issuance, unless otherwise extended by the Company. The
Warrants shall include customary anti-dilution protection, including protection
against issuances of securities at prices (or with exercise prices, in the case
of warrants, options or rights) below the lower of the exercise price of the
Warrants or the then fair market value of the underlying common equity, a
cashless exercise provision and will be non-redeemable and provide for automatic
exercise upon expiration. The Warrants shall be transferable, subject only to
the securities laws, by the holders thereof.
(c) ▇▇▇▇▇▇▇ and Acquisitions. The Company agrees that if HPC, directly
--------------------------
introduces the Company, during the term of this Agreement, to any person or
entity that becomes a party to a merger, acquisition or joint venture with the
Company (or any affiliate thereof) within nine months of such introduction, then
the Company shall pay to HPC a cash fee calculated as a percentage of the
Transaction Value (as defined herein) in accordance with the following scale:
- 6% on the first $ 5,000,000
- 5% on the amount from $ 5,000,001 to $ 7,000,000
- 4% on the amount from $ 7,000,001 to $ 9,000,000
- 3% on the amount from $ 9,000,001 to $ 11,000,000
- 2% on the amount from $ 11,000,001 to $ 13,000,000
- 1% on the amount above $ 13,000,001
"Transaction Value" shall mean the aggregate value of all cash, securities,
------------------
notes, debentures purchase options, royalties, management, and consulting
agreements; marketing, licensing and revenue contracts; agreements
not-to-compete, including contingent and installment payments.
(d) Tail Period. The Company shall and shall have cause its affiliates
------------
to pay HPC all compensation described in this Section 3 with respect to all
financing and merger and acquisition candidates at any time prior to the
expiration of 1 year after the Termination Date (the "Tail Period") if such
candidates were identified to the Company by HPC as investors in the financing
and HPC provided written notification to the Company of the introduction.
2
HPC CAPITAL MANAGEMENT
Investment Banking/ Financial Consultants
4. Representations, Warranties and Covenants of the Company. The
--------------------------------------------------------------
Company hereby represents, warrants and covenants as follows:
(a) (i) The Company has the full right, power and authority to enter
into this Agreement and to perform all of its obligations hereunder, (ii) this
Agreement has been duly authorized and executed by and constitutes a valid and
binding agreement of the Company enforceable in accordance with its terms, (iii)
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in a breach of
(A) the Company's certificate of incorporation or by-laws, or (B) any agreement
to which the Company is a party or by which any of its property or assets is
bound.
(b) Upon the filing of any registration statement by the Company pursuant
to the Securities Act of 1933, as amended, in connection with the proposed offer
and sale of any of its securities by it or any of its security holders, the
Company shall also register for resale by the holder(s) thereof in such
registration statement(s) the Shares then issued but not yet registered for
resale and the unregistered Warrant Shares then issued but not yet registered
for resale.
5. Representations, Warranties and Covenants ofHPC. HPC hereby
---------------------------------------------------
represents and warrants that: (i) it has the full right, power and authority
to enter into this Agreement and to perform all of its obligations hereunder,
(ii) this Agreement has been duly authorized and executed by and constitutes a
valid and binding agreement of HPC enforceable in accordance with its terms,
(iii) the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in a breach of
(A) HPC 's certificate of incorporation or by-laws, or (B) any agreement to
which HPC is a party or by which any of its property or assets is bound.
6. Independent Contractor: HPC and the Company hereby acknowledge
-----------------------
that HPC is an independent contractor. HPC shall not hold itself out as, nor
shall it take any action from which others might infer that it is a partner or
agent of, or joint venture with, the Company. In addition, HPC shall take no
action, which binds, or purports to bind, the Company.
7. Confidentiality. The Company acknowledges that all opinions and advice,
---------------
whether oral or written, given by HPC to the Company in connection with this
Agreement are intended solely for the benefit and use of the Company in
considering the transactions to which they relate, and the Company agrees that
no person or entity other than the Company shall be entitled to make use of or
rely upon the advice of HPC to be given hereunder, and no such opinion or advice
shall be used by the Company for any other purpose or reproduced, disseminated,
quoted or referred to by the Company in communications with third parties at any
time, in any manner or for any purpose, nor may the Company make any public
references to HPC or use HPC 's name in any annual report or any other report or
release of the Company without HPC 's prior written consent, except that the
Company may, without HPC 's further consent, disclose this Agreement (but not
information provided to the Company by HPC ) in the company's filings with the
Securities and Exchange Commission, if such disclosure is required by law.
3
HPC CAPITAL MANAGEMENT
Investment Banking/ Financial Consultants
8. Reimbursement. The Company agrees to reimburse promptly HPC,
-------------
upon request from time to time, for all reasonable, out-of-pocket expenses
incurred by HPC (including fees and disbursements of counsel and of other
consultants and advisors retained by HPC) in connection with the matters
contemplated this Agreement. P-COM, Inc. will pre-approve any expenses above $
250.00 in writing.
9. Notices. Except as otherwise specifically agreed, all notices and
-------
other communications made under this Agreement shall be in writing and, when
delivered in person or by facsimile transmission, shall be deemed given on the
same day if delivered on a business day during normal business hours, or on the
first day of business day following delivery in person or by facsimile outside
normal business hours, or on the date indicated on the return receipt if sent
registered or certified mail, return receipt requested. All notices sent
hereunder shall be sent to the representatives of the party to be noticed at the
addresses indicated respectively below, or at such other addresses as the
parties to be noticed may from time to time by like notice hereafter specify:
If to the Company: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
P-COM, Inc.
▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to HPC : HPC Capital Management
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
10. Entire Agreement. This Agreement contains the entire agreement
-----------------
between the parties. It may not be changed except by agreement in writing
signed by the party against whom enforcement of any waiver, change, discharge,
or modification is sought. Waiver of or failure to exercise any rights provided
by this Agreement in any respect shall not be deemed a waiver of any further or
future rights.
11. Survival of Representations and Warranties. The representations,
----------------------------------------------
warranties, acknowledgments and agreements of HPC and the Company shall survive
the termination of this agreement. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided, however, that, such severability shall
-------- --------
be ineffective if it materially changes the economic benefit of this Agreement
to any party.
4
HPC CAPITAL MANAGEMENT
Investment Banking/ Financial Consultants
12. Governing Law. This Agreement shall be construed according to the laws
--------------
of the State of Georgia and subject to the jurisdiction of the courts of said
state, without application of the principles of conflicts of laws. Each of the
parties' consents exclusively to personal jurisdiction in the ▇▇▇▇▇▇ County,
Georgia, waives any objection as to jurisdiction or venue, and agrees not to
assert any defense based on lack of jurisdiction or venue. In any litigation,
arbitration, or other dispute resolution arising out of or relating to this
Agreement, the prevailing party shall be reimbursed by the other party (as
determined by a court of competent jurisdiction) for reasonable attorneys' fees
and/or arbitration costs.
13. Successors. This Agreement shall be binding upon the parties, their
----------
successors and assigns.
14. Execution. This Agreement may be executed in any number of counterparts
---------
each of which shall be enforceable against the parties executing such
counterparts, and all of which together shall constitute a single document.
Except as otherwise stated herein, in lieu of the original documents, a
facsimile transmission or copy of the original documents shall be as effective
and enforceable as the original.
If the foregoing correctly sets forth our understanding and agreement, please so
indicate by signing where indicated below. We look forward to working with you.
HPC CAPITAL MANAGEMENT.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President
Agreed to and accepted this 6 day of February 2003.
---
P-COM, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
5